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Gold soars but be careful when selling your jewellery, warns BBB

8/8/2011

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As stock markets plunge in the wake of the U.S. credit rating downgrade, gold prices continue to soar, now topping $1,700 an ounce.

This new high and increasing demand for the precious metal makes it very tempting for consumers to trade their unwanted jewellery for cash. Options to sell gold online, at in-home ‘gold parties’, or through local jewelers continue to gain in popularity, but the BBB would like 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,” says Lynda Pasacreta, BBB President and CEO. “Whether you do it through a gold party, over the Internet, or through a local jeweler, consumers need to get informed before they sell their jewellery.”

BBB suggests consumers consider the following before selling your gold:

Find a trustworthy appraiser. For an appraisal, if possible, go to someone locally whom you know and trust. Check with the Better Business Bureau at www.mbc.bbb.org. 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 ounce quote is for pure gold only. For instance, 14-karat gold is composed of just 58.5 per cent gold. Ask how much the company’s going rate is for each ounce of each karat you are sending. The lower the karat, the less the gold content.

Don’t let jewellery of different karat value be weighed together. Some dealers will weigh all jewellery together and pay you for the lowest karat value. Separate your jewellery by karat value before attending a gold party.

Don't let anyone steal your diamonds from gold pieces. Single gold stud earrings might be worth $5 or $10, yet diamonds in the earrings can be saved. Some are too small, and the labor to remove them might exceed their value, but engagement ring diamonds, for example, should be given a value separate from the gold.

Know the terms and conditions when sending items by post. Make sure your items are insured when being shipped, so if they are lost you can recover the value.

  • Obtain appraisals prior to mailing items, so if they are lost you have proof of their value.
  • Check the company’s policy as to what they will reimburse 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 if you are not satisfied with the price offered. Can you get your product back, if you return the cheque? Many companies melt down the items in 10–14 days. If you send the cheque back, send it “return receipt requested,” so you have proof when it arrived at the company.

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