Thinking About Attending a Hotel Gold Party?by Nick LaFleur on Sep. 25, 2009, under Life, scam
With extra cash being so tough to come by these days, many consumers are looking to gold parties as a convenient way to make some money, but they may not provide you the best deal. BBB recommends consumers do their homework before selling their jewelry at gold parties.
Brett Sadovnick, owner of Tucson Coin and Autograph, told BBB he recently discovered that some hotel buyers offer far less than he and his local competitors, after he sent a gold chain he had purchased for $250 to several hotel buyers and the highest bid he received was $130.
“That’s beyond bad business practices; it’s stealing out of people’s pockets,” Sadovnick said. “Because they’re (consumers) desperate they don’t think clearly. People should always remember to shop it around before they settle on a buyer.”
BBB recommends keeping the following tips in mind when attending a gold selling party:
• Understand the scales. The weight of gold helps determine its value. If you measure your jewelry on a home kitchen or postal scale it is important to understand that jewelers use a different measurement standard called a Troy ounce. A common U.S. scale will measure 28 grams per ounce, while gold is measured at 31.1 grams per Troy ounce. To add to the confusion, some dealers will also use a system of weights called pennyweight (dwt) to measure a Troy ounce while others will use grams. A pennyweight is the equivalent of 1.555 grams. Consumers need to be alert that a dealer does not weigh their gold by pennyweight, but pay them by the gram. This would allow the dealer to pay the seller less for more weight of gold.
• Know your Karats. Pure gold is too soft to be practically used so it is combined with other metals to create durability and color. The Federal Trade Commission requires that all jewelry sold in the United States describe a karat fineness of the alloy. 1 karat equals 1/24 of pure gold by weight. So 14 karats would mean the jewelry was 14 part gold and 10 part other metals. It is illegal for jewelry to be labeled “gold jewelry” if it is less than 10 karats. It is important to know the karats of your gold to make an informed decision on the scrap value of your jewelry.
• Combining karats. Don’t let jewelry of different karat value be weighed together. Some dealers will weigh all jewelry together and pay you for the lowest karat value. Separate your jewelry by karat value before attending a gold party.
• Call a local jewelry store or check with an online source, such as www.goldprice.org, to verify the current market price for gold before you sell.
“You can have fun and make some money at gold parties if you prepare in advance,” says Kim States, BBB President. “Weighing your gold with a jeweler and knowing your jewelry’s karat content before going to a gold party will help you understand the value of your items to assist with getting the best deal and avoid being ripped off.”
Consumers who have questions, or would like a report on specific gold buyers can contact their BBB at (520)888-5353, or visit www.tucson.bbb.org.