Experts: Shop around before selling old gold

Sellers need to do their homework before selling.

NEWSDAY

MELVILLE, N.Y. — It sounded too good to be true.

Bob Hoffmann, 56, of Gillette, N.J., had some gold jewelry he hadn’t worn in years — a chain bracelet, a ring, a money clip. When he heard a radio commercial for a company that bought old gold, sight unseen, he visited its Web site, requested a shipping bag, and sent his unwanted valuables on their way.

“The stuff sat in a drawer — I had no use for it,” says Hoffmann, who expected to get well over $100 for what had cost him four times that.

The amount of the check the company promptly mailed him? $58.

“It’s nothing like what people say,” concludes Hoffmann, who doesn’t want to bother returning the paltry check and getting his gold back. “And at the end of the day, I wouldn’t do it again.”

Hoffmann’s experience to the contrary, today, more than ever, it pays to cash in old gold. Earlier this month, the value of the shiny yellow stuff reached an all-time high of more than $900 an ounce, breaking the record of $875 set in 1980.

“When the price of gold becomes newsworthy, we see quite a jump in people selling old gold, and we’re seeing a large increase in business now,” says Joshua Garfield, marketing director at Philadelphia-based Garfield Refining, which is in the business of refining scrap gold. “And when people want to sell, people come out of the woodwork to buy.”

But how happy you will be with the cash you get depends on the purity of your gold, how much of it you are selling and how much research you do.

When it comes to selling gold, there are two options: Sell to a jeweler or other middleman, or directly to a refining company.

Cecilia Gardner, president of the Manhattan-based Jewelers Vigilance Committee, notes that all municipalities have laws requiring those who buy secondhand gold to obtain identification of the seller and hold the gold for a specified period. “If a jeweler is not doing that,” she warns, “something is wrong.”

A less popular option is sending the gold directly to a refining company, not all of which deal with the public.

“The bulk of our business is from professions that use a lot gold,” such as dentists and dental labs, says Garfield. “But we have a few private customers as well,” including miners who have panned for placer gold, which looks sort of like sand but can be anywhere from 18 to 22 karats.

As soon as a customer’s scrap gold arrives at the company, it is logged, locking in the price of gold on the day of receipt. Then the gold is melted and assayed in the laboratory to determine its composition.

Lesser metals that can be present in the gold alloy include copper, silver, zinc and nickel. The degree of the gold’s purity is expressed in karats, with 24k being pure gold, 18k being 75 percent gold, and 14k being 58.5 percent pure.