Which? Slams Cash For Gold Buyers
Investigation reveals low prices paid for gold
According to Which?
Cash-for-gold buyers are paying shockingly low rates for jewellery and offering customers a poor service, Which? research has found.
Our investigation showed that consumers are paid around 6% of the retail value for new gold jewellery, while high street jewellers pay an average of four times this percentage.
Which? sent three identical items of gold jewellery - costing £115, £215 and £399 - to four gold buyers that advertise heavily on TV. These were Cash4Gold, CashMyGold, Money4Gold and Postal Gold.
Further sets of each piece of jewellery were valued by three independent jewellers and three pawnbrokers.
Poor prices for gold jewellery
The TV-advertised, cash-for-gold buyers consistently gave the lowest quotes for each item.
CashMyGold gave us the lowest quotes - £6.43 for the £115 gold bracelet, £9.64 for the £215 gold bangle and £22.50 for the £399 gold necklace.
The quotes from the pawnbrokers and high street jewellers were higher than all of the cash-for-gold sites.
On average, the pawnbrokers quoted £26 for the £115 bracelet, £32 for the £215 bangle and £80 for the necklace.
The high street jewellers offered even higher prices - £33, £46 and £102 on average for the three pieces.
Worrying customer service
The investigation also uncovered some worrying terms and conditions imposed by the cash-for-gold buyers.
For example, all informed us of their quotes by posting cheques - and only seven to 12 days were given (from the date of issue, not arrival) to reject offers and return cheques, or our gold would be melted down.
We also were alarmed to find that some providers sent envelopes that promoted their company name or the word 'gold'.
Which? chief executive Peter Vicary-Smith said: 'The cash-for-gold market is unregulated, and Which? believes that this investigation has raised some serious concerns about the fair treatment of consumers.
'People should be wary of buyers’ adverts, as our research shows that they certainly could get more money for their gold elsewhere.'
Cash for Gold
Company||Gold Retail Price £115||Gold Retail Price £215||Gold Retail Price £399
Postal Gold||£7.97||£10.89|| £25.04
a Demanded £9.95 Postal Order (costing us an additional £1 Royal Mail charge) to return item
b Average of three quotes
c No quote was provided by one merchant for the £215 item
Whilst we delighted to see their report, we found it slightly odd that Which? used "retail prices" on three different jewellery items. We believe this is a rather unscientific starting point for their comparisons for two main reasons.
Firstly the retail price of similar or identical items often varies considerably.
Secondly, the intrinsic gold value of the items, at a stated date, would have been a far better comparison figure, and would have given a more meaningful comparison not only between different buyers, but also indicating their approximate profit margins.
Naturally, we e-mailed Which? with our comments.
The next day in a further e-mail, we added:
We perhaps should have added that if you had included important data such as the weight and carat of the three items, then your readers could have used this to calculate the intrinsic gold content at any time.
Not only would this have added great value to your report, but would have also future-proofed your article, as it would then have retained some of its relevance for an almost indefinite length of time.
We hope this further suggestion is of use to you.
The results Which? published were broadly in line with what we would have predicted, except that we thought most pawnbrokers would have paid higher prices, closer to those of jewellers. We were not surprised to hear that the TV advertising postal gold buyers were paying abysmally low prices, or to hear that their customer service and terms of business were questionable. In our view most of these buyers are "cowboys" or crooks who have jumped on the latest bandwagon to make a quick buck out of suckers and mugs. ~We have seen it many times before.
Our quick summary of Which?'s report shows:
The TV advertisers, all sell-your-gold-by-post operators offered rip-off prices.
All the pawnbrokers offered at least double the highest of the TV advertisers.
Jewellers offered more than three times the highest TV advertisers price.
If Which? ever reply to our e-mails, or add the suggested information to its report, we may be able to give a comparison with our own buying prices at the time. We would confidently expect that our prices would be more (probably by at least 10%) than the "Jewellers" price, as this is the sector that we consider to be our typical competition.
OFT Enquiry into Postal Scrap Gold Buying Companies
Published the same day as the Which? report.
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Other Misleading Gold Adverts
There are lots of them around!
Just one example:-
MyGoldSold.co.uk Laughably Stupid Claim to Pay 30% More for Gold than any UK Buyer
It's hard to believe anybody would make such a ridiculous claim and expect to be believed!
Cash For Gold Scrap Gold Buying Rip Off
Cash4Gold.Com ex employee spills the beans.
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