By Andrew Housser
You may have noticed the recent glut of stores, both physical sites and virtual online ones, wanting to buy cast-off gold. Over the last couple of years, the prices of certain precious metals like gold and silver have hit all-time highs. As 2012 comes to a close, gold is valued at around $1,700 per ounce. So, if you have items collecting dust, the time may be right to sell. Smart consumers could use the proceeds to reduce credit card debt, shore up emergency funds or add to holiday budgets.
A reputable gold-buying business will give you your fair share for your unwanted gold. Unfortunately, you do need to look out for unscrupulous shysters. Before you sell off the family jewels, keep these caveats in mind.
1. Shop around.
You may eventually decide to go with an online gold-buying service, but it is still best to first take your gold to several reputable local jewelers or pawn shops to get at least three appraisals. Ask each buyer how much they will pay per gram. Keep in mind that while a common U.S. scale will measure 28 grams per ounce, jewelers use a different measurement standard called a Troy ounce, which is 31.1 grams. Do not sell to buyers who use a system called pennyweight. This system shortchanges you, enabling the buyer to get more of your gold for less money.2. Ask for credentials.
In order to buy gold, precious metals dealers and pawnbrokers must hold licenses from their state finance departments. Jewelry stores generally are exempt from this requirement. You should ask to see the buyer's state license to buy precious metals. By law, the buyer must ask you for some form of valid government-issued identification, such as a driver's license. This requirement helps deter the sale of stolen property. Take your business elsewhere if your buyer attempts to skip this step. 3. Check with the Better Business Bureau.
The BBB investigates complaints against gold and silver dealers. Before you sell, visit BBB.org to make sure your buyer is on the up-and-up.4. Be wary of temporary stores.
It is best to stick with companies that have been in business buying gold for a year or more and that have good reputations. Pop-up stores -- those that set up temporary shops in hotel lobbies -- are known to leave victims underpaid, if they get paid at all. It is best to steer clear of transient gold dealers. 5. Keep your karats separate.
Because 24-karat gold is worth the most, and the price goes down as the karat weight drops, your gold items should be separated and weighed based on karat value. Buyers who weigh all jewelry together, regardless of karat value, underpay sellers by offering the lowest karat value.6. Watch the scale.
The accuracy of scales used by licensed jewelers and pawnshops are verified periodically by a state's department of weights and measures. However, the same may not be true for scales used by pop-up stores or home gold-buying parties. Gold's value is determined by its weight and karat. For instance, a piece of 14-karat jewelry is 14 parts gold and 10 parts other metals (or about 58 percent gold). If that gold jewelry weighed an ounce and the current market value of gold is $1,700, it would be worth $986. As a seller, you should net anywhere from 60 percent to 80 percent of that price, or $592 to $789.7. Be a savvy online consumer.
If you consider selling to a web-based gold buyer, you should carefully read the terms and conditions. Some websites offer free shipping to send in gold, but very high shipping rates if you decline the offer and ask to have your items returned. You also should check the buyer's policy on reimbursement. Many offer only limited liability if your package is lost during shipping.8. Know what you are selling.
Antique pieces or items with gems may be worth more to a collector as they are instead of melted down for scrap. The same goes for gold coins. You should always have antique or heirloom pieces appraised by an independent accredited appraiser before offering them to a metals buyer.
You would not sell your car or your home without first finding out what it is worth. The same should hold true for your gold, so do some homework. Because the market value of gold fluctuates, check its current rate before making a sale. Most importantly, go with your gut. If something feels sketchy, or if you worry that you will regret selling grandma's wedding rings, forget the cash and hang onto your gold.
Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.