Any gold rush has its share of opportunists.
And it seems that today’s rush to buy old gold jewelry is no different, according to consumer protection agencies. The No. 1 problem: Some companies give families selling their gold only cents on its dollar value.
This happens in any number of ways: Paying a low price in order to reap a bigger profit when selling the gold to a smelter; using an inaccurate scale; underrating the gold’s purity; misstating the day’s gold price in the payment calculation; or making an honest mistake that’s not in the consumer’s favor.
A Register-Guard reporter took an 18-karat, 1920s gold wedding band to several gold buyers in recent weeks to see what they would pay, and the offers were all over the place:
Gold Buyers at the Mall, Valley River Center: Said the ring was 14 karat, weighed 5.5 grams and offered $60.
North Star Coin & Jewelry in Springfield: Said the ring was 18 karat, weighed 5.5 grams and offered $113.
Your Place second-hand shop in Glenwood: Said the ring was 14 karat, weighed 5.5 grams and offered $66.
Eugene Coin & Jewelry in south Eugene: Said the ring was 18 karat, weighed 5.6 grams and offered $106.
Harry Ritchie’s Jewelers, Gateway: Said the ring was 18 karat, weighed 5.6 grams and offered $69.
Why were some prices offered for the same ring so much lower than the others?
A company official for Gold Buyers at the Mall declined to comment.
Harry Ritchie’s buys gold simply as a service to its customers, company spokeswoman Tobey Ritchie said. “We just take it in, weigh it and give the percentage of whatever we pay — and we send it to a refinery.”
Consumers selling their jewelry should be aware of the buyer’s business model, because that may be a big factor in the price the buyer is willing to pay.
The riskiest way to sell gold is through mail-in programs for jewelry that later send a check, according to the Better Business Bureau.
The New York-based Jewelers Vigilance Committee, a trade group for the jewelry industry, also urges caution.
“There are operators out there who do a fine job collecting gold by mail and sending back payments,” said committee president Cecilia Gardner. “But you need to be particularly careful … because people can disappear with your gold.”
One traveling gold buyer that calls itself the “Treasure Hunters Road Show” — which visited Eugene in May — has sparked controversy in Indiana, North Carolina and Texas.
A Texas newspaper sent reporters to four of the company’s shows in two states and concluded that the company underpays — offering as little as 30 percent of the daily gold price. Other dealers pay 70 percent or more.
Road Show owners THR & Associates hotly disputes the charge.
“The (Texas newspaper) has been trying to stalk us for six months and they’ve had this ongoing investigation,” company spokesman Matthew Enright said.
Enright points to another newspaper’s test, in December 2009, when an Alabama reporter found the Road Show paying more for gold than local buyers.
“There’s too many (traveling) companies out there trying to do what we do,” Enright said. “That gives us a bad rap because of the sheer fact of those companies are out there not doing everything legit.”
The Professional Numismatics Guild — an association of coin dealers — also warns the public about traveling shows. In its Coin World magazine, the guild recounts an incident in which a road show buyer offered $60 for a 1925 Indian head quarter worth $10,000.
Local coin and jewelry shops will generally pay the best, said David Nelkin, owner of Eugene Coin and Jewelry.
Also, they help reduce jewelry theft, he said.
Eugene-Springfield city shops are closely regulated by police. Shop owners are required by local ordinance to upload into a police database photographs or detailed lists of each jewelry buy — within 12 hours. Lane County regulations, including in Glenwood, are somewhat looser.
Buyers are required to hold the jewelry they buy for seven days to allow police to catch up with any stolen goods.
Traveling shows are supposed to abide by the same rules, but, because they move on, they don’t establish the same day-to-day working relationship with police.
Local store owners will alert officers if jewelry appears to be stolen, said Eugene Police Sgt. Jay Shadwick.
“We’ve made a number of cases where the gold has been purchased (by a store) and we were able to match that up with property that was, in fact, stolen,” he said.
The solo, itinerant buyers are especially hard for police to track, Shadwick said.
“They’re flying through town and buying out of the trunk of the car,” he said.
Under state rules, whoever buys scrap gold in Oregon must weigh the gold using a scale bearing a current Oregon Measurement Standards Division sticker that certifies annual testing for accuracy — and some of the gold buyers simply don’t do that, according the agency.
Also, gold buyers are required to position their scales so that customers selling gold can see and verify the weight of the jewelry. Many of them don’t do that, either.
Consumers who want the best bottom-line price for their family gold should visit as many buyers as possible and learn about the weight, purity and desirability of their gold, jewelers and consumer agencies advise.
“People ought to be shopping around and getting offers and comparing them,” Gardner said. “Your first offer may not be the best offer. You have to do some homework.”“People ought to be shopping around and getting offers and comparing them. Your first offer may not be the best offer. You have to do some homework.”
Jewelers Vigilance Committee
Appeared in print: Sunday, July 25, 2010, page A1
Looking to sell? Experts say shop around for best price