How To Identify Potential Cash For Gold Scams
Two circumstances have given rise to a number of "cash for gold" scams
. First, the economy has slowed. Millions of people have lost their jobs, and millions more are barely making ends meet. Bills are piling up. As a result, they are more motivated than ever to earn extra funds. One of quickest and easiest ways to do that is to turn their old jewelry and scrap gold into cash.The second circumstance involves the recent price of gold. Though the price per troy ounce has pulled back slightly, it recently hit a historic high. This has encouraged people to dig through their dresser drawers and garages, looking for broken gold chains, watches, earrings, and other pieces they own, but no longer wear.
The economy and the recent high price of gold have dovetailed to produce throngs of people who are interested in selling their gold items online. The problem is, these same circumstances have given birth to countless scams. Many will simply disappear after you mail your pieces to them for evaluation.
We'll help you avoid these unsavory "buyers" below. The following tips will help you identify potential frauds before you take the first step.
Shipping, Insurance, And Tracking Numbers
A trustworthy, reliable buyer will be willing to pay the shipping costs associated with mailing your items to them. Some will even provide a postage-paid mailing kit to make the process as smooth as possible for you. If you're working with a potential buyer that is unwilling to pay for shipping, think twice before sending your gold bracelets, pendants, and other jewelry.
Likewise, reputable buyers will offer to insure the items you send to them. Even if they're only offering $100 or $200 of coverage, it is a sign of trust and reliability. You'll find that many companies will offer more. Avoid those that offer none.
You'll also want to have a way to track your items once you ship them. Ask the buyer for a tracking number. Without one, you'll have no way to know the location of your package, or whether you'll see your pieces again. If the buyer has provided a postage-paid mailing kit, the kit should already include a tracking number.
Ideally, you should also be able to create a personal account on the buyer's website to support clear communication throughout the selling process. Fraudulent buyers will not provide this feature.
Does The Price Make Sense?
Don't be tempted by prices that seem artificially high. This is a common tactic used by "cash for gold" scams in order to lure potential sellers. For example, if the spot price per troy ounce is currently $1,200, these unsavory outfits might offer $1,150. This is an indication the buyer is untrustworthy.
Realize that gold buyers need to make a profit in order to sustain their businesses. Most of them sell the gold items they buy to refiners or other dealers. They need a large margin (much larger than $50 an ounce) to make their business model viable.
Always ask yourself: does the price I'm being offered for my gold jewelery and scrap gold make sense given the current price per troy ounce? If not, avoid the buyer.
Who Can You Trust?
To be sure, if you have never sold gold online, your first transaction will represent a step of faith. Until you work with a trustworthy buyer, there's no way to be certain you'll be treated fairly. That said, you can improve your chances of enjoying a smooth, rewarding transaction by following a few guidelines.
First, determine how much your gold pieces are worth based on current market prices. Second, work directly with a refiner rather than a broker; doing so eliminates the middleman and increases your profit. Third, trust experience. If a company has only been in the gold-buying business for a few years, be wary. By contrast, there are a few refiners who have decades of experience to offer. Fourth, call the buyer. Most reputable companies will list a phone number on their website.
Once you work with an honest, dependable buyer for the first time, you'll be able to sell your gold pieces in the future with confidence. The suggestions above will prove invaluable for taking that critical, first step.
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