Serena Cowdy looks at whether postal gold merchants are worth their weight in it!
This is a script of a lovemoney.com video. Instead of reading it, why not watch the video instead? You can find the video here.
Hello. I'm Serena Cowdy for lovemoney.com.
Today, I'm going to be looking at the postal gold merchants who offer to buy your gold for cash. The flash TV adverts make it sound like a golden opportunity to make some money... but I think it's a right royal-rip off!
Poor pricing
My first problem with postal gold merchants is the prices they offer. They often won't reveal what price they pay per ounce or gram for gold. Instead, they rely on sensationalist marketing blurb like 'highest prices paid' or 'best rates guaranteed'.
Many customers are offered just half the market value of their gold, or even less.
Hidden charges
You also need to keep your eyes peeled for hidden charges that you're not expecting. For example, certain companies don't offer you freepost envelopes to send in your gold - but instead make you pay to send it via special delivery.
Others will charge you if and when you want your gold sent back to you. And some will charge you for testing your gold to establish its authenticity and quality.
Where's my money?
Finally, some postal gold merchants hold onto gold for weeks or even months after customers have rejected their quotes and returned their cheques.
Consumer internet forums are littered with complaints about certain companies, so do your research before you get involved!
A good benchmark
Wherever you end up selling your gold, you need to make sure you're being offered a decent price. This is why it's a good idea to deal with buyers who offer specific prices directly linked to the London Gold Fix.
Essentially, Gold Fixing is a process by which the price of gold is set on the London market. It's not perfect, but it can be seen as a reasonable international benchmark.
As a very rough guide, 80% of the current world price is a reasonable return to expect. If you're being offered much less than 80%, I suggest you take your business elsewhere.
That's all from me for today. Hope to see you again soon at lovemoney.com.
This is a script of a lovemoney.com video. Instead of reading it, why not watch the video instead? You can find the video here.