BEFORE YOU SELL YOUR GOLD FOR CASH …

By John Ingrisano

By John Ingrisano
Director, Family Finance Conference Center

“Need cash?  Send us your gold jewelry, and we’ll send you
a check.”

With the price of gold at record highs (hovering around $1,600 an ounce in June 2012), and many people struggling financially these days, such offers may sound tempting.

What you need to know before you send in your jewelry for cash:

Number 1: Accept that, unless you are an expert, you know little about the true value of your gold.  It is very difficult (almost impossible) for the average Joe (or Jo) to determine the actual worth of jewelry in his or her
possession.

For example, 24-karat gold is 100% pure, while 18-karat gold is 75% pure.  Even if you do know the purity, you then have to figure that you will not get retail or market value, but a discounted price reflecting the dealer’s profit.  Plus, that value floats every day.

When buying gold jewelry in New York’s Diamond District, I would select a piece I wanted, weigh it on the dealer’s scale, punch in the weight and market rate-per-ounce on my calculator, factor in a discount for me, and make an offer.  In the end, I would strike an okay deal, but nothing to brag about.

Number 2: Do not mail in your gold without at least talking to the would-be buyer.  The odds of being ripped off and/or getting bottom dollar for your gold are high if you just plop that old wedding band and grandma’s bracelet into an envelope and mail it to some far-away company.  You might get as little as 10 cents on the dollar … if you hear back from them at all.  Be smart.

Number 3:  Gold has no sentimental value. The price is based not on the fact that it was your great grandmother’s wedding ring, but its weight and purity.

Number 4:  Gold and silver coins are different. Their value is based on their rarity and collector value.

Recommendations:

1. Educate yourself. Do not just blindly trust some stranger to give you a good deal.  (If that’s how you do business, I have some great real estate in Florida; it’s only under water at high tide.)  Find out the purity of your gold and read an article or two on how gold is valued.  The more you know, the better the odds that you will not be scammed.
2. Insure and certify receipt of any jewelry you send by mail. Never send to a post office box.
3. Bring coins to a collector (called a numismatist) to get some idea of their value.
4. Bring gold to a local jewelry store (not a big chain, but one owned by someone in your community), again, to get at least a general idea of what it is worth.

The bottom line:  You will not make a killing on any cash-for-jewelry deal.  However, if you must sell, a little caution and research may help put a few more bucks in your pocket.

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