Which? slams cash for gold buyers Investigation reveals low prices paid for gold
21 January 2010
Cash-for-gold buyers are paying shockingly low rates for jewellery and offering customers a poor service, Which? research has found.
Our investigation showed that consumers are paid around 6% of the retail value for new gold jewellery, while high street jewellers pay an average of four times this percentage.
Which? sent three identical items of 9ct gold jewellery - costing £115, £215 and £399 - to four gold buyers that advertise heavily on TV. These were Cash4Gold, CashMyGold, Money4Gold and Postal Gold.
Further sets of each piece of jewellery were valued by three independent jewellers and three pawnbrokers.
Poor prices for gold jewellery
The TV-advertised, cash-for-gold buyers consistently gave the lowest quotes for each item.
CashMyGold gave us the lowest quotes - £6.43 for the £115 gold bracelet, £9.64 for the £215 gold bangle and £22.50 for the £399 gold necklace.
The quotes from the pawnbrokers and high street jewellers were higher than all of the cash-for-gold sites.
On average, the pawnbrokers quoted £26 for the £115 bracelet, £32 for the £215 bangle and £80 for the necklace.
The high street jewellers offered even higher prices - £33, £46 and £102 on average for the three pieces.
Worrying customer service
The investigation also uncovered some worrying terms and conditions imposed by the cash-for-gold buyers.
For example, all informed us of their quotes by posting cheques - and only seven to 12 days were given (from the date of issue, not arrival) to reject offers and return cheques, or our gold would be melted down.
We also were alarmed to find that some providers sent envelopes that promoted their company name or the word 'gold'.
Which? chief executive Peter Vicary-Smith said: 'The cash-for-gold market is unregulated, and Which? believes that this investigation has raised some serious concerns about the fair treatment of consumers.
'People should be wary of buyers’ adverts, as our research shows that they certainly could get more money for their gold elsewhere.'
|Cash for gold|
|Company||Gold retail price £115||Gold retail price £215||Gold retail price £399|
- Demanded £9.95 Postal Order (costing us an additional £1 Royal Mail charge) to return item
- Average of three quotes
- No quote was provided by one merchant for the £215 item
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.