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Gold RushIn 2007 a Florida metal refinery hit upon a million-dollar formula. Tapping into a declining economy it offered fast cash in exchange for gold posted direct to their processing plant. Performing a modern twist of alchemy they turned desperation into gold; which in today’s climate is a growth industry. If you have any old, unloved jewellery sleeping in a drawer somewhere, then you may have taken notice of a certain kind of advert; fresh from America the ‘cash for gold’ commercials, more at home on late night shopping channels, are now growing with frequency during British prime-time television. Cash4Gold, the American market leader, was the first to make this break into the cultural mainstream, endorsed by cleverly typecast celebrities. In the US their lavish advert featured MC Hammer and the late Ed McMahon competing to cash-in the biggest item of gold. The ad even aired during the infamous Super Bowl commercial break, a 30 second slot so lucrative it is said to have cost a staggering $2 Million dollars. Here in the UK it is musician Goldie that heads the Cash4Gold campaign but he is not alone, Dale Winton and Anne Diamond are few among many household names you may see on your screens promoting the cash for gold scheme. ‘Cash your gold’ they tell us, ‘simply send us your gold and get your cheque in the mail!’ Yet despite this endorsement it has become apparent that a growing number of us remain unconvinced, and it seems with some cause. For beneath the shiny veneer of these marketing giants’ lies a dull reality; cash for gold companies are in essence a buyer of scrap metal. Worth its weight in gold The problem arises with the simple misapprehension of the cash-for-gold ambition. They are not a buyer of jewellery; they are a buyer of gold. This is an important distinction to make. Cash for gold companies are solely concerned with the metal content, or what they term as the ‘melt value’ of your jewellery. In simple terms this is the value of the gold itself once it has been extracted, melted down and sent to the refinery. Yet what can’t be smelted down, divided up and weighed, are the intangible elements of jewellery. The age, the craftsmanship, the rarity and sometimes even the provenance. All integral components that can add real value above and beyond material constituents. Cash for gold companies do specify that ‘craftsmanship is not a consideration when assessing the value of your gold’[i] and that such outlets should be ‘a way to monetize old and broken jewellery’[ii] but one can not help thinking of those unaware of this distinction. However, even allowing for the above, in recent months cash for gold companies have made headlines across both Britain and the United States amid claims of a much greater problem; that of targeted undervaluing. A dark cloud looms over the cash for gold market, which to date remains unregulated. The boom in gold prices, coupled with the crippling effects of an economic crisis has created an audience susceptible to exploitation. Under investigation in the United States by the Better Business Bureau and featured by CBS’s Inside Edition, certain cash for gold companies have been brought to the attention of the public by whistle-blowing ex-employees and mounting customer complaints. Here in the UK controversy is only beginning. In a survey conducted by consumer group Which? it was revealed that British consigners are paid around 6% of the retail value for new gold jewellery by cash for gold companies. A claim they recently substantiated with an experiment. For the test they purchased three sets of identical gold jewellery valued at £115, £215 and £399. These were then sent to independent jewellers, three pawn brokers and four cash for gold companies that advertise heavily on TV. These were Cash4Gold, CashMyGold, Money4Gold and Postal Gold. Consistently the TV advertised cash for gold buyers gave the lowest quote for each item, and in particular CashMyGold gave the lowest quotes overall - £6.43 for the £115 gold bracelet, £9.64 for the £215 gold bangle and £22.50 for the £399 gold necklace.[iii] Worryingly Which? also reported a serious concern regarding the fair treatment of consumers during this process, especially with regards to the terms and conditions imposed by the companies. In particular they brought to light the trend amongst all cash for gold companies of informing value by way of posting settlement cheques. Typically only seven to twelve days are given (from the date of issue, not arrival) of the cheque for clients to reject offers. Too late and your gold is melted down. “People should be wary of buyers’ adverts” says Which? Chief Executive Peter Vicary-Smith “as our research shows that they could certainly get more money for their gold elsewhere.”[iv] [i] See Cash4Gold website
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