GOLD COINS AND JEWELRY
by Mike Fuljenz
Why has a rise in gold prices also led to a universal rise in consumer complaints and potential coin lawsuitsaimed at some gold coin and jewelry buyers?
Recent testing done by consumer reports ABC’s Good Morning America and regional award winning weekly The Examiner provide some answers. I will address seven different business models and will briefly summarize their advantages and disadvantages. They are listed in order of who often pays the most to who often pays the least.
1. Large National Coin Dealer
Advantages – Typically pay the most for types of gold coins or jewelry they specialize in and they are usually reputable nationally and locally but you must verify this. The Examiner story found surveyed major reputable coin dealers paid as much as 4-5 times what some hotel coin buyers paid on some rare gold coins. Are usually the quickest in and out to deal with.
Disadvantages – May be far away from where you are and may not buy jewelry. You still must check out their reputation and if they are Better Business Bureau accredited.
2. Local Coin Dealer
Advantages – They are in your area and The Examiner story found they often paid 3-4 times what hotel coin buyers paid for the same gold coins.
Disadvantages – If reputable and knowledgeable they often pay 10-20% less than major dealers for rare coins and jewelry. Some local coin dealers are not Better Business Bureau accredited and may offer much less due to lack of expertise or integrity. Check out their reputation carefully.
3. Jewelry Shops
Advantages – For jewelry, not rare gold coins, may be very competitive with local coin shop if reputable and Better Business Bureau accredited. Finely crafted jewelry can bring premiums.
Disadvantages - Experts for buying jewelry may not always be on premises and you must make sure of local reputation and if they are Better Business Bureau accredited. Often pay melt value or slightly higher for rare gold coins that are worth multiples of melt value.
4. Pawn Shops
Advantages – You can buy back some products you sell if you want and some are BBB accredited and give you very competitive prices locally on gold bullion and jewelry.
Disadvantages – Often not in best part of town, bars and barbed wire, and may offer less than previous three. Rare gold coins are usually not their specialty, thus their rare gold coin offers are usually not competitive. Check out their reputation carefully.
5. Gold Parties
Advantages – You know the person holding the party and it’s held in a comfortable setting.
Disadvantages – Prices paid are often far less than the first three and you often don’t know as much about the actual buyers’ knowledge and integrity and if they are Better Business Bureau accredited. The host typically makes 10% too!
6. Hotel Buyers
Advantages – They’re in your locale and you get paid immediately.
Disadvantages – May pay as little as 20¢ on the dollar compared to buyers previously listed #1 and #2 and they may not really know what they are looking at. They also may not give you an itemized receipt and the process can take the longest. One common coin may take 45 minutes to get a value. Some have been the subject of numerous customer complaints. They may not be Better Business Bureau accredited.
7. Mail-Away Gold Buyers
Advantages – No in person contact and fairly simple to send.
Disadvantages – Offers may be about 20¢ on the dollar and you may have to negotiate to get that or higher. Some have reported having their gold items lost or melted and could not be returned and were refused reimbursement. Some have been the subject of numerous customer complaints resulting in new laws to address some business practices. They may not be Better Business Bureau accredited.
In conclusion, I would advise getting an opinion from a reputable coin dealer before selling your gold coins or jewelry by mail or to a transient buyer at a gold party or hotel. Always get an offer from the dealer originally that sold you the coins.
SPECIAL WARNING: BE CAREFUL about dealing with east coast dealers, calling you to buy or sell coins, that you never contacted before (cold call). Especially be careful if they deal in coins not graded by PCGS or NGC but in coins graded by services that sound like PCGS or NGC over the telephone. Check out their Better Business Bureau status.