Should You Trade Your Gold For Cash?

June 04, 2013

Marilyn Monroe sang that diamonds are a girl’s best friend.  Well, if that’s the case, my best friend and I have just had a falling out.  A few days ago, I noticed my 3-stone anniversary ring was missing a stone so I took it back to the jewelry store for repair. Luckily, I faithfully take my rings in for inspection every six months to maintain the warranty so my ring was sent out to get a replacement diamond at no cost to me.

While at the counter waiting for the warranty paperwork to be filled out, I noticed a sign for a gold exchange program and started to envision all the money I could make by turning in all of my broken gold chains and orphan earrings. The catch for this particular “cash for gold” offer is that the value is not really cash but a gift card for the jewelry store instead. It got me wondering if this deal or any of the other gold buying services are a rip off or for real.

One of the common requirements to get cash for gold is that you have to send in your gold by mail.  Even at my favorite jewelry store, I was not able to bring my mangled gold chains in to get them weighed so I could see the scale in person – the only option was to use one of their prepaid envelopes and then my payment amount would be determined. Before you raid your own jewelry box and send off your cast-offs for cash, the Jewelry Information Center has the following tips:

• Find a reputable buyer by checking with the Better Business Bureau for customer complaints and make sure the company has a license to buy gold in your state.
• Get an appraisal on designer or antique jewelry before you send it off for scrap gold. A Tiffany piece is worth much more than just the gold weight.
• Protect yourself by documenting and photographing your jewelry and check on the company’s policy in case of loss. You might also want to insure the mailing package.

Although the price of gold is down about 19% over the past 6 months, it is still up 56% over a 5 year period, according to www.goldprice.org, so you also want to be aware of the  current price is when you send in your gold. My jewelry store actually posts what they pay based on the precious metal content, which is usually stamped on the jewelry as 10 karat, 14 karat, 24 karat or the European equivalent of .416 (10K), .585(14K), or 1.000(24K).

Finally, consider if your unusable jewelry has any sentimental value.  Perhaps that broken necklace you got as a Valentine’s gift from your loved one could be made into a bracelet or anklet instead of melting it down.  The stone in a lone earring could be reset in a ring. So maybe if I ever find my missing stone from my own ring, I could get creative and get it set into a new piece.