Beware the gold rush, says Which?

21 January 2010

Companies that encourage people to sell their unwanted gold by post are offering consumers shockingly bad value and should be avoided, reveals a new Which? Money investigation*.

The consumer champion sent three pieces of brand new gold jewellery to four gold buyers that advertise on TV, plus three independent jewellers and three pawnbrokers**. TV gold buyers consistently gave the worst quotes.

CashMyGold offered the lowest prices on all three items, offering just £38.57 for the three pieces of new jewellery purchased for £729. One of the poorest deals from CashMyGold was at just under £10 for a £215 9ct gold bangle – an independent jeweller quoted £54 for the same piece.

In one instance, Money4Gold effectively held a necklace to ransom, telling a Which? Money researcher that a 9ct necklace he bought for £399 was ‘not gold’ and it would cost him £10.95 to have it returned***.

On average, the TV gold buyers offered only around 6 per cent of the retail price for gold, but high street retailers paid around 25 per cent – more than four times what the TV gold buyers would pay.

Postal Gold surprised the researcher by upping its quote for all three pieces of jewellery when he rejected its cheque – almost doubling its offer for the £115 bracelet and £215 bangle. However, these rates were still far lower than those from jewellers and pawnbrokers.

Which? Money was also concerned with the indiscreet labelling on some of the envelopes used to send the jewellery – Postal Gold’s delivery address stated the company name, while CashMyGold’s special delivery envelope was emblazoned with the word ‘gold’.

Which? chief executive, Peter Vicary-Smith, says:

“The poor value for money that these TV gold buyers are providing is simply shocking. The cash for gold market is unregulated, and this investigation has raised some serious concerns about the fair treatment of consumers.

“People should be wary of buyers’ adverts as they could almost certainly get more money for their gold elsewhere.”

Notes to Editor

Which? is the leading independent consumer champion in the UK. We provide impartial, expert information on products and services in our magazines, books and online to help consumers make more informed choices, and we campaign on issues that matter to all consumers, from food to finances, health to estate agents. For more information on how we can help you, visit www.which.co.uk or www.which.co.uk/campaigns

The full article ‘Don’t rush to sell your gold’ appears in the February 2010 issue of Which? Money magazine. For further information, the full article, a copy of the magazine or an interview, please contact Helen Lacey.

For more information visit www.which.co.uk/money

Research Notes

* Which? Money purchased four identical items of gold jewellery, costing £115, £215 and £399, in November 2009. Which? Money then sent these to four TV gold buyers, as well as getting quotes from three high street pawnbrokers and three jewellers.
** The table shows the average amounts quoted by four TV gold buyers, jewellers and pawnbrokers for a £115 9ct gold bracelet, a £215 9ct gold bangle and a £399 9ct gold necklace.

*** An independent jewellery designer confirmed that the necklace was 9ct gold.