By Sage McHugh on October 16, 2009 in
You've probably seen the ads for Cash4Gold, a company that allows you to mail in your old gold jewelry in exchange for cash. Likewise, you might have also stumbled upon numerous complaints from users claiming Cash4Gold isn't all it promises to be.
A former employee of Cash4Gold, Michele Liberis, sparked a media flurry (and a lawsuit filed by Cash4Gold in retaliation) after submitting anonymous complaints to ComplaintsBoard.com, describing how Cash4Gold deceives it customers by paying them much less than what their gold is really worth.
Earlier this year, Consumerist conducted an extensive investigation into the business practices of Cash4Gold, and what they found was rather alarming. According to its advertising, Cash4Gold promises "top dollar" to people who send in their gold in exchange for cash. In a test carried out with the help of mystery shoppers from sister organization, Consumer Reports, identical gold pendants and chains were sent to Cash4Gold and some of its competitors. The team calculated the raw value of the jewelry - about $70 for each set of items - based on the market price at the time. Consumerist reported that "Cash4Gold sent back checks ranging from $7.60 to $12.72 (or 11% to 18% of melt value), the lowest amounts of any firm."
Many complaints posted to consumer-oriented sites, such as the Better Business Bureau, echo these findings. Lowball checks seem to be the customers' biggest gripe. Brodie White, President of the Better Business Bureau of Southeast Florida and the Caribbean, says "delayed checks, low payments and lost packages are among the most common complaints he's received about Cash4Gold." The BBB currently gives Cash4Gold a grade of C and has received close to 300 complaints.
In an interview with ABC News, CEO Jeff Aronson admits that Cash4Gold doesn't pay the highest price for gold, but it is a "tremendous service business." Aronson says that Cash4Gold is not the most profitable solution for everyone, and some people are better off going through a jeweler. According to Aronson, Cash4Gold will pay anywhere from 20 to 80 percent of the value, depending on the weight of the gold. These statements contradict the rosy advertising claims offering "top dollar" for your gold. Aronson blames customers' "unrealistic expectations" for the high number of complaints surrounding Cash4Gold.
Cash4Gold reminds customers that the offer is not binding; you can decline and get your jewelry back - providing you request a return within 12 days of the date that the check was issued. Still, consumers have every right to be leery.