Don’t Fall Victim to “Cash for Gold” Scams

The words “Cash for Gold” have been cropping up nearly everywhere recently. They appear in ads on billboards, on loose ads in packets that arrive in the mail, and even on store signs.

 Image of "Cash for Gold" signholders for Specialty Metals blog post, Scams to Avoid when Selling Precious Metals, courtesy of Comedy Central and South Park.

It seems kind of odd that there is so much demand for your gold at a time when it’s not trading at top-of-market prices, doesn’t it? And in fact, it is kind of odd. But there is an explanation, and not a very happy one. It is that some scammers have realized that if they can trick people into selling gold for prices that are below current trading levels, there is still a hefty profit to be made.

Please note that we are not saying that all companies that are buying gold are crooked. We are just pointing out some deceptive scams out there that you should be aware of.

The “Quick Cash” Pressure Tactic

It works this way. You take your gold items into a store that buys gold. The person behind the counter weighs them, keeps them behind the counter, and thrusts cash at you. It’s a strategy that works for people who are happy to get money on the spot, but don’t fall for it. The gold buyer is giving you only a portion of what your gold is really worth, then selling it for market prices and (of course) pocketing the difference.

The “Bait and Switch” Scam

This one is practiced over the phone or online. Here’s how it works. You contact a company that promises to buy your gold for cash. They give you an inflated estimate of how much your gold “should be worth.” You send it in for a final estimate. And then the buyer tells you some cock-and-bull story about why your gold is worth much less than what they told you before. It’s bull. They say your gold pin is really only gold-plated, your 14 karat gold bracelet is really only 10 karat, that it is only cheap costume jewelry from some foreign country, or some other lies. They make you an offer for what they will pay you for your now-devalued item and you are tempted to take it. After all, it would be a big hassle to get your item back – and if you ask for it, you will probably meet with resistance. Maybe they will suddenly say that they will return it after you pay a testing fee. After all, the company is trying to rip you off and people who try to rip you off are not your friends.

The “Pop Up Store” Scam

We have noticed – and chances are that you have too – that a number of stores that are offering to buy gold haven’t been in business for very long. They pop up along secondary highways with newly installed signs promising to buy your gold for cash. Okay, we support retailers who want to start new businesses, we really do. It’s part of the American way.

But when it comes to selling gold for a fair price, you should deal with a company that has been in business for decades, not days.  In no case should you leave any gold items in such stores for testing or appraisal. When you get back there, you could find the doors locked or have a hard time getting your gold back. You’re wiser to do business with a company like us. We have a long track record of running an honest business in an honest way, we are a member of the Jewelers Board of Trade, and we are approved by the Better Business Bureau and listed on Dun & Bradstreet.

The Telemarketing Scam

Consumer Reports has recently issued warnings about this one, which centers on selling gold, not buying it.  Here’s how it works, according to CR:

“Telemarketers promise senior citizens with assets that gold, silver, platinum and palladium bars, bullion, and coins are a surefire, low-risk investment and use high-pressure tactics . . . what consumers aren’t told is that their investment is really a credit purchase . . . the scammers don’t actually buy any precious metals.”

Other phone scams are happening today too. Someone calls and claims to be from a company that will buy your precious coins or other items made of precious metals. So you send in your gold, expect to get paid, but somehow it turns out to be very difficult to get the buyer to send you a check – if you can get in touch with the buyer at all, that is.

We Are the Better Way

Precious metals are valuable assets, which explains why scam artists can make a profit by lowballing prices or theft. Protect the precious metals that you own – and your profits – by dealing with Gold Refiners, part of Specialty Metals Smelters and Refiners. Give us a call today at 800-426-2344.

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