Sunday, November 27, 2011

8 Tips on Avoiding Cash for Gold Scams

With gold prices rising and the economy struggling, many people are looking for ways to pull in some extra cash.   Whether you want to sell silver in New Jersey, gold in Florida or flatware in Georgia, buying services may claim to buy your items for top dollar, many of them knowing that the average consumer has no idea what  "top dollar" is.

If you are considering trading in your gold or other precious metals for cash, how can you be sure you're dealing with a reputable establishment and not one of these scams?

1. Never deal with someone over the phone or by email only.

Don't go for the mail-in services.   Only deal with someone face to face in a solid establishment.   You don't want to find that someone took your gold and absconded with no forwarding address.

2. Take your time.

Gold is not going anywhere.  Be careful around a broker who appears to be making a hard sell or who is trying to convince you that you are getting a one-day-only deal.

3. Research the company.

How long has the company been in business?  What are other people saying about the company?  Thanks to the Internet, it's almost impossible to keep bad business deals a secret.  Run a search on the company you are planning to use. You should be able to find review sites and you can read about other people's experiences with the company.

4. Check that your broker is a registered dealer.

A reputable gold broker will be registered with the National Futures Association.   You can go to the NFA's website and look up the broker. The site will tell you if the broker or firm has ever been sanctioned or had a complaint filed against them.

5. Check with the Better Business Bureau.

While you are checking credentials, go to the BBB's website and do a search there, as well.  The BBB has reported that inquiries and complaints against gold buyers are rising.  Additionally, they have received several reports from people who have mailed in their gold and never received the promised cash.

6. Separate out jewelry with gems.

If you trade in an old diamond engagement ring, you may only receive payment for the gold and not for the diamond.  If you plan to sell jewelry with gemstones, be sure to have the stone appraised and sell it through a qualified gemstone dealer.

7. Read the fine print.

Before signing anything or accepting a deal, read the entire contract or deal and understand exactly what you are entitled to.  Make sure you know how much money you will be receiving and don't sign off on the deal unless you are happy with the amount.  Don't deliver your gold "on spec."

8. Shop around.

Get estimates from a couple different companies before you decide to sell.  You might be surprised by the variance in value between companies. If you do your research and use common sense, you can get a good deal for your gold to put some extra cash in your pocket.