A quick Google search of “cash for gold online” brings up around 97,000,000 hits in .34 seconds. You will see Cash4Gold.com, Expressgoldcash.com, Empiregoldbuyers.com, goldkit.com and many others all claiming that they can give you a good amount of cash for your unwanted gold – and in many cases within days of you sending in your gold. This post aims to examine not only how this process works but also the pro’s and con’s of these companies and whether there are any other options for getting good money for old jewelry you have laying around.
The whole process is relatively simple. You take the gold you want to possibly sell and send it in per the company’s directions. Usually within a couple days of receiving the jewelry the company responds to you with a quote to buy the gold from you. You then have a choice of selling the gold to them at the quoted price or asking for your gold back. The shipping charges and policies vary by company so be sure to check the fine print before sending your gold. If you choose to accept their price you will get the quoted amount of money, again depending on the company’s policies and the payment method selected, sometimes within days. The company then acts as a middle man and sells your gold, along with many other people’s gold, to a wholesaler or a company that melts down metals for resell. The price that these wholesalers and smelters pay the middle man is worthwhile to them because they do not have to spend time finding each individual piece of metal to melt down. Instead they pay a premium to these online gold companies to get larger shipments of jewelry to process all at one time.
The major benefit of this type of company is with why they are often so successful. They provide quick cash with very little effort to the consumer. All you have to do is log onto the site and follow their usually simple instructions to send in jewelry or gold scraps. There is basically no effort required of the seller except to print out a label and walk to the mailbox. This minimal effort is unlike selling old jewelry on another site such as Craigslist, Ebay, or even going to a pawnshop where you have to search out someone willing to pay for your gold. If you are looking for some quick cash for jewelry that you really want to get rid of these companies can easily and quickly fulfill that need.
While quick cash for gold companies can give cash fast to you, these companies have come under fire in recent years. Companies in this industry are often not held in high regard. They often low-ball people when it comes to the amount of money they offer for their gold, hoping that the ease of their services or the need for fast cash will make people take it. In fact, a study by Consumer Reports found that these online cash for gold companies give about 11-29% of the market value of the gold to sellers. This compared to the 35-70% of market value that the same gold necklaces fetched at gold retail stores and pawnshops seems substantially low. While certainly not the most ethically sound business model the only real problem with this is in how the companies advertise themselves. If they claim to give the best prices for gold and consistently low-ball people who send in their gold then that is a questionable business model because they are falsely advertising their service. If in fact they simply claim to be a reliable source of fast cash that is fair within their segment of the industry of gold buying then that is an adequate way to represent their services. Another problem with these companies is the fact that they do not take into consideration the craftsmanship of the jewelry pieces submitted to them. The only things these companies care about are the quality of gold and how much of it there is. Many jewelry pieces might have additionally value in how they were made or from who made them. Any quote from a cash for gold company completely ignores this “value” of the piece because it holds no value to them.
Overall, if you have unwanted gold jewelry now is probably a good time to sell. Gold prices in the United States are at highs not seen in decades. Today an ounce of gold is worth around $1,690 on the market. Gold prices have skyrocketed over the past six or seven years but this increase in price is beginning to slow. For example, the percentage increase in the price of gold in 2005, 2006 and 2007 respectively were 20%, 23% and 30.9%. The percentage increase in 2011, 2012 and so far in 2013 respectively were 10.1%, 7% and 1%. Gold is often seen as a refuge in tough economic times for investors. As global economies begin to emerge from the past half-decade of recession the demand, and therefore price, of gold could fall. This means that the peak time to sell gold is probably soon upon us. If you are serious about selling your old gold jewelry however, take your time to shop around. Pawn shops and other gold buying retails stores are much more likely to give a larger percentage of the market value of the gold. In fact, you may be surprised to find that your old piece of jewelry has some craftsmanship value as well. A small amount of effort from you could pay large dividends in the amount of money you get for your old gold.
Sources: Google search, goldprice.org, consumer reports
Financially Stephen grew up in a family that preached saving and living below your means. That, in part, translated to his interest in Economics, especially how economics can affect individuals’ financial lives. Through his financial markets class in the fall of 2011, he furthered this interest by analyzing macroeconomic events. Stephen believes that finance, personal finance in particular, is a subject severely left out when it comes to public schooling in this country, and it is a problem that has manifested itself and contributed to many of the problems seen today. He also believes that education is the key to improvement and hopes that through his writings he will be able help people learn about finance, macroeconomics, and how to be financially savvy for the future.
In his free time Stephen enjoys playing and watching sports, wakeboarding, sailing, and country music. At UNC he has participated in Strive for College, UNC Dance Marathon, and UNC Relay for Life.
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