Everyone has seen the advertisements: companies offering cash for old and broken gold jewelry. Different from pawn shops, these companies offer payouts based on the value of gold, rather than on resale value.
“As we say on our Web site, customers should research their options before sending in their goods, since pawn shops and jewelry stores may be able to offer a higher price,” says Jeff Aronsen, chief executive officer of Pompano Beach, Fla.-based Cash4Gold.
Refining gold is a fairly simple process. People interested in selling old or broken jewelry contact a refining company to receive information and a preaddressed envelope. The gold is then mailed back to the refiner, where it is weighed and tested to determine its value. At this point, the company makes an offer and cuts a check to the customer, who has up to 12 days to return the check and have the gold shipped back, according to the company’s terms.
Prices vary depending on quantity and quality of the gold, but Cash4Gold, which has only been in business for two years, has done nearly 800,000 transactions, with thousands of those for more than $500.
“Unlike gold buyers outside the mail-in refining business, we do not offer a resale or appraisal price based on selling the jewelry to someone else,” Aronsen says. “Instead, our prices are based solely on the precious metal content of the goods.”
Though these national television advertisements have increased the visibility of scrap jewelry sales, local jewelry stores have been buying old jewelry for quite some time.
“We’ve always bought gold as long as I’ve worked here,” says Blaine Earver-Almond, jeweler at Kizer-Cummings Jewelers, 833 Mass. “Most of the time it was something where people were looking at something new and would bring in old stuff they had at home to trade in.”
Though the national refiners have gained a lot of exposure lately, Earver-Almond does not feel competition from them has cut into their scrap jewelry business.
“I don’t think they’ve cut into our business,” he says. “There was a time when we weren’t getting much, and then all of the sudden we were getting a lot of it.”
A down economy and strong gold prices have driven the increase in business to gold refiners, Earver-Almond says.
“In my opinion a down economy has people investing in (gold) as supply and demand,” he says. “People assume it’s a safe thing to put your money into.”