Cash-for-gold buyers offer ‘shockingly’ bad value, study warns

Written by Ray Clancy

Thursday, 21 January 2010 11:06

Firms that promise to buy unwanted gold for cash offer ‘shockingly bad’ value, paying just 6% of retail value, according to a new study.

Such firms, many of whom advertise on the television, should be completely avoided, says consumer organisation Which?

It sent three identical pieces of gold jewellery costing £115, £215 and £399 to four gold buyers - Cash4Gold, CashMyGold, Money4Gold and Postal Gold. Further sets of each piece of jewellery were valued by three independent jewellers and three pawnbrokers.
Those who advertised on television consistently gave the lowest quotes for each item.
CashMyGold gave the lowest quotes, offering £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.

The investigation also uncovered some worrying terms and conditions imposed by the cash-for-gold buyers, Which? said.

‘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,’ it said.

The consumer champion was also ‘alarmed’ that some providers sent envelopes that promoted their company name or the word ‘gold’.

‘The cash-for-gold market is unregulated, and Which? believes that this investigation has raised some serious concerns about the fair treatment of consumers,’ said chief executive Peter Vicary-Smith.

‘People should be wary of buyers’ adverts, as our research shows that they certainly could get more money for their gold elsewhere,’ he added.