Gold is an all time record high value, literally doubling in recent years. Which therefore makes the prospect of selling your old gold in return for receiving a sizeable payment (Cash for gold) very attractive. However the unfortunate truth is that most companies offering such a service will pay you a small proportion of the golds true value.
What to be aware of
This may sound like a strange one, however when thought through is right. Look at all the big brands you see on TV today, insurance companies like Aviva, Coca Cola, Nike etc. These companies have profits well over £1 billion a year. With the most successful companies having low expense costs, it is no secret that Nike for instance take advantage of factories in China with really low labour rates, however their products are among the most expensive of the sport brands.
So how does this apply to Cash for gold brands? It is simple, if a company can invest in heavy promotional activities then they have substantial profit margins which means they are making more money on their product which in this instance is your gold which means they are offering among the least value for your gold.
You should know the score by now. Online services are cheaper then offline services, as there are minimal staffing costs and overheads such as commercial rent etc associated with online businesses.
You always have to ensure you read the small print. Common fees encountered for returning items that transpire are not gold, and post and packaging costs for returning your gold which you wish returned as the cash offer is poor. The fine print really does need to be examined as believe it or not, some companies charge you for the burning down of the gold, which of course should really be included in the valuation of the gold. Would you expect to pay extra for having salt and pepper on your dinner in a restaurant?
Mystery shopping results
Mystery shopping is always very interesting and does give a true insight into the ethical operations in companies and whether customer satisfactions and interests are incorproated into their business model and values. Some consumer companies have recently undertaken mystery shopping on cash for gold companies and here are some interesting findings which shouldn’t be taken lightly.
Firms advertising on TV, on average offered around 6% of the retail price of gold
Postal Gold up their quotations when individuals refuse original valuations, therefore they must be in the knowledge of their substantial undervaluation.
On items bought for almost £700, the company CashMyGold offered only £38.57 in return
For a bracelet costing £115, CashMyGold offered £6.43, Postal Gold offered £7.97, Money4Gold offered £8.17 & Cash4Gold offered £10.31
Office of Fair trading results
Three of the cash for gold firms mentioned above have been asked to clear up their acts by the OFT after it was found they were actually melting down customers jewellery even before customers had a chance to reject valuations.
The companies in the firing line were Cash4Gold, CashMyGold and Postal Gold.
So what company should you go for? What do you need to look out for?
First of all, you should probably discount all merchants listed above until another comprehensive mystery shopping report comes out.
Next you should look at the online calculators or the quote prices mentioned on the corporations websites and compare with each other, although companies can lie, to do so intentionally is false advertising and comes with serious consequences so it is reliable to think most companies wouldnt risk such an act.
Read the terms and conditions, there should be fine print on the websites somewhere and as mentioned earlier, there can be hidden fees by the bucket load, so ensure you read and understand the information. The information shouldn’t be horrendously complicated like some court agreement, so if you don’t understand the terms and conditions it is probably best to ignore the company and move on.
Lastly and probably most importantly……Google the provider you have in mind. People are quick to voice their dissastisfaction but not satisfaction, so its OK not to find glowing reviews. You will also probably find some complaints as you will do for all established companies, however when reading the complaints if there is a re-occuring theme or the nature of the complaints/reviews etc are serious, again it is probably best to avoid that company.
Expect more useful information soon.
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