Beware Cash4Gold and other gold-buying ripoffs

I don't watch much broadcast TV, and when I do I skip as many commercials as possible, but even I have seen the incessant televised advertisements for a company called Cash4Gold, and I'm sure most of you have, too (they even had a Super Bowl ad). The company is being heavily promoted online as well.

The sell sounds great on the surface: You pack up all your old jewelry that you'll never wear again into an envelope and send it, insured, to Cash4Gold. They melt it down and cut you a check for the value of the gold. End of process. It sounds better than going to a pawn shop -- the process is simple and requires no personal interaction with an appraiser -- so what could go wrong?

A little online sleuthing finds that I'm not the only one who figures that if Cash4Gold has this much money to spend on TV ads, someone's getting the short end of the stick, and it's probably the people sending in their family heirlooms to be melted into ingots. The folks at Cockeyed.com put Cash4Gold to the test, rounding up a bunch of old rings, necklaces, and earrings, and taking them to a regular pawn shop to be appraised. The offer: $198 for the lot. They then sent the items to Cash4Gold and waited for a check in the mail. It arrived within a few days as promised... in the amount of 60 bucks. (You don't have to accept the check; the deal isn't done until you cash it.)

That price alone is practically criminal, but that's where the truly slimy part of the operation begins. First, if you call Cash4Gold and ask for your stuff back, you abruptly get a better offer: In the case of the above experiment, the offer was a whopping $178. That's a better deal, but still not market rate, though the caller was told that Cash4Gold could "manipulate the numbers on their end" to make it appear that more product was sent than was in reality. Bizarre, but it's really the only way Cash4Gold can cover its behind to convince you the original offer wasn't a wholesale ripoff.

As bad as that is, it's far worse if you opted for the company's "Fast Cash" option. Here, that original offer ($60) is wired into your bank account within 24 hours of them receiving the booty. It sure is fast, but it's not much cash -- and you don't have the option of declining the offer at all. You're stuck with a pittance for your valuable gold items. (It's also worth noting that a publicist working for Cash4Gold later offered Cockeyed cash (allegedly without Cash4Gold's involvement) for removing its expose from the web...)

Update: More test results on Cash4Gold and other online gold buyers here from Channel 10 San Diego.

Update 2: Cash4Gold's PR agency has requested the removal of this post, calling it defamatory. I have amended certain language in this post to clarify the source of some of the content within.