BBB Advice: Be Careful When Selling Gold
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SOUTHFIELD — As the price of gold continues to soar, now topping $1,700 an ounce, consumers may be tempted to trade in their unwanted jewelry for cash.
But the Southfield-based Better Business Bureau Serving Detroit and Eastern Michigan advises consumers to think before they try to cash in on the gold rush.
“Selling old or unwanted gold is a growing trend for consumers during these uncertain economic times,” said Patrick Bennett, BBB director of community relations. “Consumers should be informed before they attend a gold party, sell over the internet or through a local jeweler.”
Brian Schubot, president of Schubot Jewelers in Birmingham, suggested that people shop around before they decide to sell their gold or jewelry.
“It is important that the dealer is properly licensed and adheres to the Michigan Precious Metals and Gem Dealers Act,” Schubot said. “By doing your homework first, you can make sure you are getting the best value for your items.”
Bill Schuette, Michigan Attorney General, cautioned consumers that “…gold parties (events where consumers can visit a friend’s home and sell their gold) may seem like a convenient way to spend time with friends and make some cash, you may not be getting the best deal for your valuables. Unless you have shopped around first, and know exactly what your valuables are worth, you run the risk of losing significant amounts of money and your valuables.”
BBB suggests consumers consider the following before selling your gold:
* Find a trustworthy appraiser. Get an appraisal locally. Check with BBB at www.easternmichigan.bbb.org to locate a reputable company. The BBB suggests obtaining two or three appraisals to compare prices, prior to any sale.
* The true price of gold may not be what you receive. If gold is worth $1,700 per ounce, you aren’t going to be paid $1,700 for every ounce of gold you have. Ask what you will be paid (if an online company, make sure you ask for specifics and give details on items you’ll be sending). Understand that the per ounce quote is for pure gold only. For instance, 14-karat gold is composed of just 58.5 per cent gold. Ask the company for its current rate for each karat weight you are sending.
* Don’t let jewelry of different karat value be weighed together. Some dealers will weigh all jewelry together and pay you for the lowest karat value. Separate your jewelry by karat value to get the most favorable price.
* Safeguard diamonds and other precious stones. Single gold stud earrings might be worth $5 or $10, yet diamonds, rubies or other gems in the earrings may have a higher value. Ask for your gold and precious stones to be valued separately or have the stones removed and save them for resetting.
* Know the terms and conditions when sending items by mail. Make sure your items are fully insured when sent by postal mail.
* Retain your appraisals for proof of value of sent items.
* Check the company’s policy regarding reimbursement if they lose your product. Many limit their liability.
* Make a list of the items included in the package, keep a copy for yourself and put a copy in the envelope.
* Take a picture of the items you are sending, including any identifying marks.
* Ask about the company’s guarantee policy in the event you are not satisfied with the amount you receive. Can you get your items back, if you return the check? Under Michigan law, companies are required to retain your items, intact, for only nine days. If you send the check back, send it “return receipt requested,” so you have proof of delivery.
When attending a gold party, BBB recommends the following tips:
* Is the dealer operating legally? Under the Michigan Precious Metal and Gem Dealer Act, dealers should be registered with the police department where the gold party is taking place. The law also requires these gold dealers to keep a permanent record of each transaction and keep all of the precious items they purchase for at least nine days.
* Understand the scales. Jewelers use a weight measurement known as a Troy ounce, or 31.1 grams. A common U.S. ounce equals only 28 grams. To add to the confusion, some dealers may use a measure called the pennyweight (dwt), rather than grams, to measure a Troy ounce. A pennyweight is equivalent to 1.555 grams. Be on the alert for the dealer who weighs your gold by pennyweight, but pays by the gram. This unethical practice would result in your receiving less money, for more gold.
* Know your Karats. Pure gold is too soft to be used alone, so it is combined with other metals to create durability and color. The Federal Trade Commission requires that all jewelry sold in the U.S. describe a karat fineness of the alloy. One (1) karat equals 1/24 of pure gold by weight. So 14 karats would mean the jewelry was 14 part gold and 10 part other metals. It is illegal for jewelry to be labeled “gold jewelry” if it is less than 10 karats. When you have your items appraised, have the jeweler inform you of the karat weights of your pieces and keep them separate when you offer them for sale to a dealer or at a gold party.
* Know the current market price. Call a local jewelry store or check with an online source, such as www.goldprice.org, to verify the current market price for gold before you sell.
The Better Business Bureau Serving Detroit & Eastern Michigan is a non-profit organization with the purpose of promoting trust in the marketplace by assisting in the protection of consumers and businesses from fraud and unethical business practices. In addition to its recognized dispute resolution services, the BBB maintains reliability reports on the customer service history of more than 80,000 local businesses and provides consumer education materials on numerous topics. The BBB provides its services free to the public and its service territory stretches across Eastern Michigan from Ann Arbor through Metropolitan Detroit, Lansing, Flint, upward to Alpena, and covers the entire Upper Peninsula of the state.