The Better Business Bureau Serving Western Michigan recently authorized a shopper to verify strong advertising claims made by Grand Rapids area businesses that offer to buy gold. BBB found that many of the advertised claims are unsubstantiated. As the BBB advertising review program is a core function of the organization's mission, BBB is sharing its findings with the public.
The BBB approached 14 area businesses. At least 10 of the 14 businesses had advertised that they pay the most for gold, with statements such as "We pay top dollar," "Get the highest price for your unwanted gold," and "We can pay more - guaranteed."
However, prices offered by the businesses for the same gold items on the same day ranged widely. During the July shopping investigation, prices offered ranged from $702 to $1,475 for a package of gold jewelry including chains, earrings, rings and a gold plate.
Businesses that offered more than $1,400 included Michigan Gold & Diamond Exchange, Mullen Coins and Jade Rare Coin. Businesses that offered less than $1,000: Quick Cash Outlet & Jewelry, Fast Jewelers, Grand Valley Gold & Silver, Gold & Diamond Zone and Wyoming Outlet. (Baribeau & Sons Inc. did not make an offer because owners of the jewelry were not present.)
The businesses were asked if they would match or beat a competitor's price. Some said they would match or beat a price "within reason" based on the consumer relaying a verbal quote. Only one business required a written offer from a competitor to beat a price. None of the businesses offered a written policy on the matter. BBB found that some stores prefer not to offer a price, instead asking what the customer feels is a good price, and then trying to meet that price if it makes business sense.
Phil Catlett, BBB president, suggested consumers request an explanation from dealers regarding how they determine the value of merchandise. "No business will always offer you the highest price, because they cannot control what other businesses do," Catlett said.
All of the businesses were contacted after the investigation. Those making best-price claims were asked to modify their advertising - whether on websites, storefronts or other media - based on the BBB Code of Advertising. They were also advised to develop a written policy for matching/beating prices. To date, three businesses have responded and have either revised their advertisements or are working on it. The BBB is still working with other businesses.
Some of the difference in pricing was based on the businesses' evaluation of the jewelry. For example, some determined a necklace was 10K gold, while others said 14K. Also, some offered prices on certain items based on their collectible or resale value, while others only looked at their gold value. While most businesses disclosed their evaluations, only one business explained how a price was determined.
The BBB offers the following advice to consumers considering selling gold or other items: