The business of Scrap Gold
I’m sure you’ve seen the ads all over tv, the “Cash 4 Gold” commercials where the company offers you money for used or unwanted gold scrap.
In reality, you’re getting pennies on the dollar for what was paid for the gold because the scrap value for the gold is small, then the buyer takes his cut from what he pays you.
Whatever the reality of selling gold for scrap prices, the business is booming and many jewelry stores are cashing in on the trend. The trend has caused increased competition in the field and since gold has reached and hovered around $950 an ounce, it has become a very lucrative business for gold buyers.
It has become so popular that some jewelry stores have been holding gold selling parties and certain websites are able to advertise during the Superbowl.
One seller, Richard Stalter, has owned a jeweler, South Side Jewelers & More, for 19 years and now there is new competition for him too.
“I used to be the only one down here that did that,” said Stalter, whose business model has always been largely based on generating most of its revenue from buying gold to sell for scrap. “Now, I have three competitors.”
Selling any gold that you may have in your house could be a potentially disastrous situation. I personally don’t trust anyone that I have to mail my valuables to then expect them to mail me a check. That is too much trust in a company or person that I don’t know. I would rather go to a jewelry store to sell any unwanted jewelry.
I don’t think I’m alone in that.
I have noticed a huge jump in the amount of commercials for gold buyers and jewelry stores that are accepting gold from customers as scrap. I know the jump in price is a huge incentive for more and more people to get out there and try to sell their gold, but I would think that more people would have some sort of sentimental value associated with their jewelry than what the scrappers are willing to give them for it.
However, I do suppose if times are tough enough then most people will do whatever they have to to keep food on the table, and there’s nothing wrong with that, but if you are at the point where you are going to sell your valuables, please do some research first.
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I never understood those commercials, and they seem so “used car salesman-esque” that they are really annoying. It’s good to know the value of gold, but I’m with you completely – I don’t trust anyone who says mail me your valuables and then I’ll give you money.
I find it quite sad that people are so desperate that they are prepared to sell off their jewellry for scrap. Often the items they sell while not having much material value hold great sentimental value. On the other hand, I guess it is better than going bankrupt and no-one is forcing them to sell.
I really do agree with Jane, its so sad to see these desperate people selling off their family jewelery for a pittance, I think the scrap gold industry is booming at the moment and this is because of the recession as people are so desperate.
How could there be anything at all wrong with offering someone the opportunity to turn what is otherwise a useless piece of ornamentation into cash they can use to buy food or pay bills? It’s their decision whether or not to sell, just as it was their decision to buy it in the first place.
I dont see anything wrong with trading in your gold for cash, but just be aware of what you trade in as it could be worth alot more than you think. I have now had second thoughts on trading all my gold after reading this.