The VAST majority of these people are scammers. I understand that a person has to make a markup and that these dealers and programs need to make a living, but their offers are commonly flat out criminal.
Many case studies have been done on this subject, (with a couple news videos below as examples) that prove that the offers by these dealers/programs are usually a joke.
How do they get away with this:
- Under-estimate your gold’s weight
- Under-estimate your gold’s karat (purity)
- Offer a fraction of the true value of gold
- They assume you have no idea how much gold you have, what quality the gold is, or even what gold is worth.
As one of the videos points out, Cash4Gold.com (a major gold buyer) had a D rating with the BBB (which is now a B-). What is more embarrassing is when you deny their offers, they tend to increase their offer. Also some of them go so far to insult your intelligence that they offer you “BONUS cash awards.” The gold is actually $350 (which they usually claim is “top-dollar” ) but they can give you a bonus $100 or a $50 gas card because they have just lost their minds with generosity. The minute someone tells me there is a bonus on selling a precious metal investments – I view them as a con-artist.
Make no mistake, that these sites and programs are scammers. They are criminals and some are making more money than you can possibly imagine.
What is an alternative? Go to multiple local jewelry dealers and/or gold buyers and get multiple quotes. Still not happy with their offer? Record what they tell you about carat and weight, then sell it on eBay as gold scrap, people tend to get about 80 to 95% of what gold is currently going for on eBay. Downside to eBay is the chance of a scammer trying to obtain your gold or challenge the quality of gold and some how work buyer protection in his favor to get their money back. Buyer protection is too strong.
In conclusion, it might be worth giving up 10% or even 20% of your gold’s value to a local jewelry dealer, but do not fall for one of these online dealers and/or send away programs. I hope these criminals will face justice soon.