Cash For Gold = Big Ripoff

by James & Miel on August 7, 2009 · 0 comments

Hi All,

A couple of days ago, we got a flyer in the mail from a company advertising a gold and silver buying event in Maryland.

Given the recent bad press regarding, I smelled a ripoff and decided to investigate. A quick check of the companies webpage, revealed a minimal setup in terms of the amount of information it presented. Another quick scan showed the page had only been registered for less than two months.

Following up, I called the number provided on the flyer. The gentlemen on the other end of the line quoted me a price of $7 for a pre 1965 silver dollar and 60 dollars for a 14 karat mens wedding band. Unfortunately, these prices offered were significantly less than the current market value of the underlying metal. For example, silver is currently trading at just over 14 dollars an ounce. This means that the market value of a 1965 silver dollar is something like 13 bucks, not $7. Now, my wedding band weighs about a half an ounce and its 60% gold, so the spot value of a men’s band at current prices is more like $277, not the $60 offered.

While its certainly not illegal to make really low offers for precious metal, please be skeptical if attending a buying event like the one these folks are putting on. Just based on my preliminary examination of this particular company, it looks like they are a fly by night outfit with rip off prices. Similar caution could be exercised when looking at this industry in general. In fact, any advertisements with the phrase “cash for gold” or “your cash for gold” should probably be a big red flag. You could be losing a significant portion of the wealth your gold represents if you sell it for less than it is worth.

Here is a snap of the flyer.

And here is the backside.



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