PEOPLE selling their old gold are being “ripped off” online and on the High Street.
With the price soaring to a record high – around 40 per cent up since the start of the year — millions have been flogging necklaces, rings and even teeth.
Jon White puts a price on our gold[/caption]
We showed the half sovereign coin and a 10g 9ct gold necklace to eight gold dealers[/caption]
But a Sun on Sunday probe has found some dealers are offering prices less than a third of real market value to unsuspecting sellers.
We showed a half sovereign coin and a 10g 9ct gold necklace to eight gold dealers. They were independently valued this week at £640.
No dealer offered to match the value and one even proposed £194.31 — less than a third of its worth.
Pressure selling
Jon White, founder of Gold Traders, said: “People are being ripped off on a massive scale.
“Companies have to make a profit, but anybody offering less than 90 per cent of the value is ripping you off.”
Gold prices can fluctuate rapidly, but we sent parcels containing the identical items to online traders on the same day.
We also approached High Street companies on the day the internet valuations were made.
Selling gold via post is advertised as the simple, safe way to get the best price, but our investigation reveals it can be fraught with difficulties and pressure selling.
Customers enter a few details online and are sent a prepaid post bag to send their valuables.
Shops will buy the jewellery, then sell it in store, online or to a bullion dealer to be melted down.
The lowest offer for our necklace and sovereign came from Text Gold — which also trades as The Gold Company.
Their radio ads state they offer the “best prices” and claim that they will pay for your gold within two hours of receiving it.
But a week after getting ours, they ignored repeated requests for a valuation, before offering only £194.31 after we suggested the gold must have been lost.
A second online company, postgoldforcash.com — who also say they offer the “best price for your gold” — emailed an offer of just £492, which we declined.
Almost a week later, the firm had still not returned the items despite repeated requests, a tactic likely to place pressure on hard-up families.
Cash4gold-now say they offer a “great price and fast payment”.
The lowest offer for our necklace and sovereign came from Text Gold — which also trades as The Gold Company, at £194.31[/caption]
The Gold Centre, which is part of Wants — a chain of pawnbrokers across South West England — offered half of its value at £325[/caption]
A staff member phoned the day after it was delivered to tell us the gold was worth “less than £500, but we will round it up if you accept now”.
When we declined, they raised their offer to £520, then £540, adding, “We’ll put the money in your account in ten minutes”.
On the High Street, we visited The Gold Centre, which is part of Wants — a chain of pawnbrokers across South West England — and were offered half of its value at £325.
At H&T, the UK’s largest pawnbroker, the offer was slightly higher at £365, 57 per cent of the value.
Cash Converters, who have stores across the UK, offered £470, 73 per cent of the real value.
Award-winning jeweller Jon said: “Our industry is the Wild West, with no regulation. If you want to buy and sell copper, you have to jump through hoops — but if you buy and sell gold, you don’t.
At H&T, the UK’s largest pawnbroker, the offer was £365, 57 per cent of the value[/caption]
Cash Converters, who have stores across the UK, offered £470, 73 per cent of the real value[/caption]
“Anybody can start a gold company. There are companies operating from PO box addresses and there have been cases of people sending gold and never getting any money — or their gold — back.
“The use of virtual mailboxes is a warning flag — lots of companies use Hatton Garden in London because of its association with jewellers, when they really operate out of anonymous industrial units.”
Ross Norman, CEO of the company Metals Daily, which provides live price data on precious metals including gold, silver and platinum, said the cost-of-living crisis has seen people increasingly looking to cash in on their scrap gold.
He said: “But unless you have a great knowledge of the market, you can be taken advantage of.
“I encourage people to do their research. If you don’t understand what you have to sell, you leave yourself open to being ripped off.”
All the companies were asked to comment on our findings.
I encourage people to do their research. If you don’t understand what you have to sell, you leave yourself open to being ripped off
Ross Norman
A Cash4gold-now spokesman said: “Like any business, there are costs that have to be covered and, of course, a profit margin that has to be made.
“So on this basis, the more gold we receive from a customer, the higher the percentage we can afford to pay.
“On tiny quantities, it is challenging to pay high percentages while offering a free insured postal service and no-obligation valuation.
“However, on larger quantities, we can pay very high percentages.”
Top 5 tips
- Sort gold according to its carat (purity). Look for hallmarks.
- Weigh your valuables in grams.
- Check prices at gold-traders.co.uk/calculator.
- After an offer, ask them to confirm the weight and purity.
- Don’t be afraid to haggle or go elsewhere. If unsure, ask for your gold back.
