Top 10 Questions to Ask The Gold Buyer Before Selecting Them

It seems like everybody and their brother is now starting to buy used gold and jewelry.  I’ve noticed when surfing the internet and watching TV, gold buyer advertising is everywhere.  It also seems that they are willing to promise just about anything to get your business:

• 24 Hour Payment
• Total Satisfaction Guaranteed!
• Safe. Fast. Easy.
• Highest Prices Paid.

It is interesting that many of these gold buyers promise the highest price, but at the end of the day why are so many people complaining that they actually feel like they did not get what they believed their old gold jewelry was worth.  That begs the question of, “How do I figure out who if the gold buyer is trustworthy or not?”

So to weed through all the gold buyers, I’m giving you the top questions that everyone has been asking for.  Drum roll please……

1.What is Their Physical Address
You may have noticed that when you go to the “contact page” on some of the gold buyers websites that they do not have a physical address and only a P.O. box.  In the last couple of years so many gold buyers have just sprung up out of no where.  Do you really want to send your old gold jewelry off to someone that doesn’t have a physical address?  Just imagine trying to get your items back from someone who is operating out of a PO box.

Always verify the physical address through some other way other than their website. I use Superpages to make sure that the address is good.  As a second test, take the verified street address, city and state, open up Google Maps and put it in.  By using Google Maps and selecting the imagery to “Satellite” you can actually see where the address is located.  It is amazing that some of the addresses come up as someone’s house in a neighborhood!  Do you want to send gold to someone’s house or a real business?

2. What is The Companies State Business License Number?
By getting their state business license number it is possible to see if they are a legitimate precious metal buyer.  Once you have their number, you can search the state government website to see if they are legitimate.

Every state is different about how they handle business licenses.  I search Google with the keywords being the state name and business license.  It will show what department it is issued under.  An example of the Google search is:

• new hampshire business license search
• business license washington state

After clicking through to the website there is a heading to the effect, “Business Name Lookup”, “Check Status of a Business”.  Put the license number in and see what the search result is.  Also try searching with just the name of the company incase someone has mix a number up by accident.  It does happen!

Now that you have their information from the state government, review it and verify that the information makes sense.  If they are a gold buyer but listed as an autobody mechanic, that should raise some red flags!

3. What Shipping Company Do They Use?
In the gold buying industry there are two ways of shipping your gold, through the US Postal Service or using couriers such as FEDEX, UPS, and DHL to name a few.

I’ve reviewed the two systems and concluded that using the postal service is better for a few reasons.  Firstly the postal service is bound by MAIL FRAUD LAWS where courier companies are private companies and are not governed by these laws.  Even though courier services have policies and procedures in place, there is something about knowing the law is on your side.  Secondly, many people don’t realize that the postal service also has a PRIORITY MAIL service which is just as competitive to courier services and has all the tracking features as well.  So using the USPS isn’t a compromise, it will get there just a quick and still track it.  Lastly, it is much easier to take your package down to the post office and use the priority mail service instead of finding a courier drop off centre.  This is especially true if you live in a smaller town or rural area.

It’s also important to ask the gold buyer if they pay for shipping.  Most buyers have their own shipping account and pick up the cost at no charge.  If they don’t, there are plenty of good buyers out there that will.

4.  What is Their Insurance Policy For Shipping?
While shipping you parcel through the US Postal Service is covered by mail fraud laws, if something does happen to your gold packet there is nothing immediate that the law can do to get your gold back or reimburse you.  This is why it is important to have shipping insurance.  Most gold buyers that have a free shipping service also have insurance, but there is a catch.  If you look at the “Terms and Conditions” on their websites, just about all of them only insure to $100.  Yes that is right $100!  If your package is worth more that $100 you only insured for the initial $100.

But there is one company that actually provides more insurance for free! The Silver and Gold Exchange in New Hampshire will insure you precious metals for up to $5000.  This is the most that I have seen from a creditable gold buyer.

Another option is to purchase additional insurance for your priority mail package and send it to another gold buyer that you prefer.

5.  How Long Have They Being Buying Gold and/or Precious Metals?
This question is different than, “How long have you been in business?”  The first question is a better question since many people run more than one business under the same company.  If you were to ask, “How long have you been in business?”, and they are a jewelry store, their answer maybe ”20 years”.  But really that is not what you want to know.  You want to know how long they have been buying gold and other precious metals.  Also listen to how they answer the question.

Many people answer a different question than they were asked surprisingly!  Don’t hesitate to get clarity on what they mean.  See example conversation below:

Seller: How long have you being purchasing gold?
Buyer: We have been in business for 20 years.
Seller: Does that mean you have being buying gold for 20 years?
Buyer: As a jewelry store we have being purchasing peoples used jewelry all those years.
Seller: OK. How many of those years have you specialized in buying peoples used gold and preparing it for scrap gold reclaiming?
Buyer: We just started getting into this side of the business about 6 months ago.

In the above example, it may or may not be bad but when you look and the answers to the other questions, how does it make you feel if they are just starting out with maybe little or no experience in buying and selling gold, silver, and/or other precious metals?

6.  What’s Their Security Policy to Protect Your Valuables While it’s at Their Facility/Warehouse?
After arriving at their warehouse the shipping insurance is no long valid once the package is signed off.  As the name suggests, once shipping is complete so it the insurance.  This is why if you read the “terms and conditions” page of most gold buyers they will not accept any packages that are ripped, torn, or damaged as they would be taking on responsibility which they do not want.

When they do accept it, there is no insurance and you are really just trusting that they take care of your precious gold jewelry, what “checks and balances” do they have within the company to make sure that it does not get lost, stolen, or mixed with other packages that arrive?

Its important to know how they sort, document, and track the packages though the company.  Lastly, what system do they have in place to know that their employees are not stealing from the packages?  Credible places have employees change into work specific clothing and after travel through metal detectors to get to the secured work area within the company.

Honest gold buyers are up front with all their company procedures.  If they are not, what are they hiding from everyone?

7.  How Does The Gold Buyer Notify You When They Have an Offer?
After your gold items are received, the gold buyer analyzes them and determines what they are willing to pay.  At this point gold buyers seem to take two paths in the industry.

Path one, the gold buyer will send a check to you and give you a 10-12 day window to contact them if you DO NOT AGREE with the value on the check.  This 10-12 day grace period is suppose to start when the check are mailed.  But it has been reported that many people have the checks arrive with 1-2 days to left to settle the disagreement.  It is a fact that it does not take 8 day to receive a letter from a continental US address.  Being that there is very little time left and most of these companies do not have many customer service agents working on complaint reviews, most gold seller do not get through in time to deal with their dispute.  Once the 10-12 day grace period is over your unwanted gold jewelry will be melted down which is really the point of no return.

Path two, the gold buyer calls or emails you with their offer to purchase your unwanted gold jewelry. They wait for you to respond if you do not answer or make a decision.  If you do not agree on the valuation of the item that you have sent in, they promptly send it back to you free of charge.

One point of interest, is that gold buyers that operate their business with the path two system rarely send gold back.  The reason?  They offer valuations of the gold items that are fair for the seller.

8. How Much Do They Pay for Gold Per Gram? (GOLD PER GRAM)
There are 3 variables that will affect the about of money that you will get for your gold:

• Gold Purity (Karat)
• Weight (Grams)
• Daily spot gold price on stock market.

The first two, purity and weight, will never change once you gold jewelry or items are measured and assessed.  But the daily gold spot price will.  You may or may not know that, gold is sold daily on the stock market around the world.  Just as the stock market goes up and down every day so does the price of gold.

Every gold buyer will calculate the maximum value they can get for that gold item they are assessing.  Everyday it changes a little and some a little more than others.  Based on that maximum value they will discount what the gold is worth so they can take some profit, just like any business.

When you talk to them as them, “How much does your company offer for gold per gram?”.  Not only should you ask how much per gram but what karat of gold per gram they are talking about.  Have them give pricing on all common karat ranges: 24, 22, 18, 14.

Since the price of gold per gram will change as the world gold market moves up and down, by writing down the pricing of a couple of different gold buyers you can compare who is giving the best value for gold.  Believe me, you will be surprised at the difference in payouts.

To see the current price of gold per gram on the open market click here.(LINK to page)

9. At Those Gold Payout Rates, is There a Minimum Amount of Gold You Need to Send?
Something that you need to watch is when a gold buyer gives you their gold per gram rates they don’t tell you that those prices are for certain amounts of gold.  If you send it your old gold jewelry and it does not meet that weight, you will get less money.

When interviewing them, specifically ask them, “At those gold rates, what is the minimum amount of gold that I need to send it to get that rate?”  They will either give you an amount or tell you any amount is fine.

10. If You Accept Their Offer, What Options Do They Have For Payment?
When it comes time to select the gold buyer you want to send your gold to they will have to pay you in some way.  Below are the most common ways to collect payment:

• Check in mail.
• PAYPAL.
• Wire direct to bank account

All of these ways are acceptable but with some buyers you need to be careful around the PAYPAL and direct bank account method.

If you read the fine print on the “Terms and Conditions” of the paperwork that you sent in with your gold, it says that if you select PAYPAL(or bank account deposit) as the form of payment you waive your rights to negotiate the price of your gold jewelry sent in.  What this means is whatever they believe you should get for you gold they will send to your PAYPAL(or bank) account and that is FINAL, no discussion period.

Now not every gold buyer has this policy, but you need to ask the question around the “automatic payout policy”.  Be clear about their position of the policy as it will be too late have sent the money!

Closing Thoughts…
By researching and asking the above 10 questions about any gold buyer you will be confident of whether you want to sell your unwanted or used gold jewelry to them.  It’s important to know that you can trust the gold buyer that you plan to send your personal gold possessions into, that they will take care of them with honesty, integrity, and respect.

The gold buyer that I trust is The Gold and Silver Exchange located in New Hampshire.  I like them since they pass all the tests.  If you are interested, I am creating a report card of the answers based on the 10 questions I asked.  Stay tuned to read it!

To your gold selling success…

Chris Lajeunesse