Cashing in on modern-day gold rush

Personal finance

How to get the best price for your unwanted jewelry

  • Thomas Streett of Phoenix in Baltimore County talks with Kathy Schoeffield of the buying team at Smyth Jewelers in Timonium. Streett made about $250 from selling a class ring and a wedding band from a long-dissolved marriage.
Thomas Streett of Phoenix in Baltimore County talks with Kathy… (Baltimore Sun photo by Kim…)
November 22, 2009|By Eileen Ambrose eileen.ambrose@baltsun.com

Thomas Streett patiently waited in a cubicle at Smyth Jewelers in Timonium on a recent Saturday as a sales associate examined two gold rings and a gold pocket watch he brought in for sale.

The verdict: The high school ring he bought in 1955 for $17 fetched $186. The wedding band from a marriage that ended more than 40 years ago was worth about $65. His grandfather's watch was merely gold-filled, and Smyth wasn't interested.

But Streett was pleased.

"Obviously, if I had known in 1955 how much gold was going to be worth, I would have bought a half-dozen class rings and stashed them away," says the 73-year-old retiree, who plans to use the cash on a trip to Las Vegas next month.

Streett is among the many who have joined a modern-day gold rush. As economic struggles continue, many consumers have scoured jewelry boxes and drawers for gold baubles that have gone unworn for years but could bring in extra cash. Smyth's Timonium store has bought jewelry from about 12,000 customers this year, double the number from all of 2008, and 12 times the usual annual number.

And the consumers' timing is good. Gold prices last week hit new highs, trading at more than $1,140 an ounce.

Most jewelry being sold by consumers is melted down for its gold, which is then resold. (If you're selling an heirloom or collectible, say, a gold Rolex watch, you'll command a higher price if you sell it as is, instead of for its meltdown value.)

There are plenty of buyers for scrap gold. Besides the traditional avenues - pawnbrokers, jewelry stores and coin dealers - some online sites allow you to mail in your gold and within days receive a check.

If you want the best price for your gold, though, you must do a little homework. It's well worth the time given that prices vary widely among buyers.

A Consumer Reports survey found that traditional buyers paid three or four times more than some online sites. And an informal survey last week by The Baltimore Sun found a wide range among traditional buyers, too.

Where to start?

Learn the lingo: Pure gold is measured by the troy ounce, a little heavier than cooking ounces. When dealers quote prices for gold that they buy, they often say how much they are willing to pay per pennyweight. Twenty pennyweights make up a troy ounce.

Most jewelry is not pure gold. Other alloys have been added to make the piece more durable. The karat, which by law is stamped into the jewelry, will tell you how much pure gold is in the piece. (Occasionally, the karat stamp is incorrect, experts say.)

The higher the karat, the more gold. For instance, pure gold is 24-karat, 18-karat contains 75 percent gold, 14-karat - used in most jewelry - is about 58 percent gold, and 10-karat is nearly 42 percent gold.

Online vs. traditional: Internet gold buyers pay the postage for you to mail in your gold, assess its value and then cut you a check within days. If you're unhappy with the amount, you have 10 or so days to return the check and get your gold back. The sites say they offer privacy and convenience.

Better stay local
Besides the ease factor, "there is no point to bother with these online buyers," says Chris Fichera, associate editor at Consumer Reports. "A quick trip to the local jewelry store will get you a better deal."

The consumer magazine sold identical 18-karat necklaces to online sites and traditional buyers: jewelry stores, coin dealers and pawnbrokers. Traditional buyers paid around 35 percent to 70 percent of the day's market price for gold, while online sites gave 11 percent to 29 percent, Consumer Reports said.

Consumers also have encountered other problems selling online.

Florida-based Cash4Gold, a leading online buyer that advertised during this year's Super Bowl, has 292 complaints filed against it with the Better Business Bureau, which gives the company a "C" grade. Consumers also filed 59 complaints against Cash4Gold with the Florida attorney general, primarily claiming that they didn't get as much for their gold as expected or that they mailed in their gold and the company denied receiving it.

Cash4Gold says the number of complaints is minuscule considering that it has handled more than 900,000 transactions since launching in 2007. The company says it works to resolve complaints.

Shop around: Even when selling to a buyer in your own backyard, it's good to check with the Better Business Bureau and the state attorney general's office for complaints against a business. Also, comparison shop.

Some suggest using a good kitchen scale to weigh your jewelry, convert the weight to troy ounces and then calculate what the value of your gold might be. But this math is complicated and made more so when jewelry contains semiprecious stones that affect the weight. (Dealers usually aren't interested in such stones.)

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