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Just be smart
This column originally ran in ComputorEdge on April 6, 2007
(Issue 2514, MP3 Players)
Maybe it's just 20 years of being a newspaper reporter has made me too cynical, too unwilling to trust.
But when I see anything advertised on late night cable TV – whether it's "Bob" pitching "natural male enhancement" or someone trying to convince me to register my invention with the Patent Office – I have my doubts as to the honesty, efficacy and/or competitiveness of the products or services being hawked.
Yet despite four and a half decades of being exposed to TV pitchmen (including a few I actually enjoy, like Cal Worthington – and whatever happened to his dog Spot, anyway?), I was still dumbfounded to see an ad for GoldKit.com.
Here's the pitch: Send us your old gold and platinum (jewelry, dental work, etc.) and we'll send you a check back for its full worth. They even send you a special pre-addressed, postage-paid envelope (insured, even) in which to ship your gold or platinum to them.
There's a lot of trust implied in that pitch, and it all runs in the consumer's direction.
What you get
You go to the Web site – GoldKit.com, oddly enough – and they spend a lot of time trying to assuage consumer's worries.
But still, how do you know you're getting paid for the amount of gold you actually sent in? Unless you have a postage scale, you won't have even a rough idea.
And then, they list their prices in pennyweight, for heaven's sake. A perfectly acceptable weight standard for jewelers, but how many lay people know what it is? (Twenty pennyweight to the ounce, just so you know.) So even if you check the day's current gold price on the open markets (about $660/ounce as I write this in mid-March), then you have to convert from ounce to pennyweight to figure out what you're getting compared to the current market price.
Now, you're not likely to get market price anywhere for old jewelry or dental work. Gold and other precious metals are dealt in ingots – ready for melting down and working with, and of a known quality.
Any dealer who buys used jewelry and dental work is going to pay less than market rates in order to cover the labor costs associated with cleaning and melting the gold and/or platinum and certifying its quality.
Still, you don't want to get completely hosed.
Checking the prices
On the same day gold was selling for about $660/ounce on the markets (easy enough to find by searching for "gold prices" in Yahoo or Google), GoldKit.com was offering $25/pennyweight for 24K (pure) gold. Given that there are 20 pennyweight to the ounce, that's about $500 per ounce. That's quite a markdown from the market rate to what they're paying the folks who send in their gold.
Of course, someone has to pay for all those TV ads – not to mention the special envelopes, shipping insurance and postage. GoldKit.com surely isn't simply absorbing those costs – all that overhead is built into their pricing scheme.
On the up side, GoldKit.com is registered with the Better Business Bureau Online Program, so you do have the peace of mind of having a way of taking a dispute to a third party for resolution. That carries a lot of weight, to be honest, and GoldKit.com deserves kudos for this. They also offer a "jewelry back guarantee" – return their check within 10 days, and they'll return your jewelry or other precious metals.
They also make a big deal out of the TrustE privacy seal – but all the TrustE program does is review your privacy statement and see if you follow it. There's no assurance that the privacy statement is a good one!
Anyway, when shipping someone your old gold, privacy is the least of your concerns.
Getting a fair price, and getting paid in full for all the gold or platinum you send is a higher priority, it seems to me. With GoldKit.com, I think honesty is probably not a huge concern, given their participation in the BBB Online Program. Whether their prices are competitive is another question.
Figuring it all out
In the end, going to a local jeweler, one in your community, strikes me as one of those occasions where the brick-and-mortar world has distinct advantages over the online world.
For one, you can ask around and find a jeweler with a reputation for honesty and fairness. And you can stand there and watch them weigh your jewelry, and talk about the price you're going to get.
Maybe it won't be more than GoldKit.com pays, but at least you'll have the peace of mind of knowing the people you deal with.