The business of Scrap Gold

Jennifer McClelland | RSS | Mon, Jun 01 2009 | 5 Comments

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.

Related posts:
Business brokers are around to help you sell your business.
Here’s a gift everyone will treasure

Tags: jewelry store, sentimental value, gold