Gold teeth, a £1,000 cigarette lighter and gold coins are some of the items that have turned up in pubs in England where gold parties are being organized by a company called partycash4gold to organize people to sell their their gold through these parties.
Similar schemes that involve mailing in gold in special pouches to a gold agency are quite well known, but the party concept hasn’t really caught on yet.
Both ideas come from the US and arrived in this country around two years ago, spurred on by the recession as well as the rising price of gold. Many pub goers liked the idea that they could sell their broken necklaces and single earrings at reasonable prices. The event is targeted at people who do not want visit their local pawn shop as they would feel uncomfortable and judged at a time when everyone is trying to save money.
But in a pub it’s a social environment where everyone is having a good time. The social aspect of gold parties in a pub takes away the inevitable emotional side of selling jewellery and other items that may bring up memories of other social occasions or loved ones.
The pubs receive 10 per cent of the money raised from the gold party. And if someone goes away and hosts their own gold party, the pub will get a further three per cent of the total sales from this too.
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Wow! Its a great way to enjoy an evening with friends letting them leave with money, while making money of your own for hosting the event.
Gold Party is a unique and recent phenomenon whereby friends and acquaintances gather to share drinks, food, laughter… and sell their gold.
It’s like a Tupperware party, except ‘everyone walks away with money’. Great.
Problem is, most guests are getting skinned in the process and don’t even realize it.
Gold party companies make enormous profits by offering horrible prices to their unsuspecting party goers.
People really have an overexaggerated view of the “scams” of gold parties. I would like one of you to go down the numbers and tell me how exactly it is a scam.
Most women have broken, mismatched or unwanted jewelry lying at the bottom of a box in their bedroom. Rather than have it sit there and collect more dust they have the option to sell it. The only four places that you can actually do this are 1. pawnshops 2. jewelers 3. gold buying companies/parties. 4. refineries
Lets look at each one..
Pawnshops: Woman most of the time don’t feel comfortable walking into a sometimes shady establishment to sell their gold.. not all of them are shady obviously but the name pawnshop has a negative connotation. When it comes to paying for gold they would be at about $6 a gram (relative number for demostrative purposes only). The reason they are low is because they have to hold the item for a certain period of time based on local law. They are hedging their bet if the gold market goes up or down and securing a profit at some point down the future. Not a scam just a very lowball offer.
Jewelers: Most people feel comfortable going to their local jeweler to sell their gold. But if you are reading this and have sold gold to them before what do they do… they take the piece into a back room and “test” it out. This includes weighing and doing an electronic gold test to determine the Karat. They then evaluate the spot price and make an offer. Again, all of this is done from a back room where the customer can not see what the exact weight or the reading of the karat. They generally will pay $6-8 a gram. Not considered a scam
Gold Buying – Mail in — This is where the scams come in to place. People unwittiningly mail their gold to a company they saw on tv and wait several days for a phone call and a price and then a check several days after that. Because these companies are doing massive nationwide tv campaigns and because they are looking to make 2000 – 3000% profit they pay around $3-$4 a gram. This is a SCAM!!! Do not do this.
Gold Buying – Parties — Now obviously people have the ability to scam which is why research, as mentioned above, is important in selecting your gold party rep. One of the most common scams is to lump the gold onto the dish and pay for the lowest karat there.. example.. 2 10k rings and 4 sets of 14k earrings… when they do the final price to the customer they make everything 10k and skim the extra 4 karats off the top.. this is a scam and you should now allow this to happen. The easy fix is to tell the person to put each karat in its own ziplock back so you get paid by the bag not by the item. Once you do this they will know that you are aware of how this works and will back down. So while this is a scam it is on an individual basis not an industry.
Gold Buying Parties.. The Gold Parties that are not scams follow this simple formula… 1. The host invites their friends. 2. the gold party company pays up to $120 for food and drink so nothing is out of pocket for the host.. unlike everyother party out there, herbalife, candle parties, tupperware…etc.. 3. The gold party rep sits down with everyone and individually prices each piece and makes an offer. 4. the offer is then accepted or declined or negotiated.. 5. upon acceptance cash is paid on the spot. 6. The host makes a 10% hosting fee of everything paid out for the night. 7. Due to the lack of overhead gold parties will typically pay $11 a gram (based on the relative numbers) so they are the highest pay out for your gold.. if they are not then dont sell to them .. that easy. Afterwards the gold party rep has to scower the refiners throughout the country find the best payout price and wait 3 – 4 weeks to sell the gold and get a check back..
So for all of you people out there how exactly is this a scam? Is it based on the profit? because obviously there is profit to be made.. it is a convenience charge for us to bring the gold to the refiners and wait the month to get paid.. just like everything else in the world. If you buy a ruler for $1.00 at the store you are paying about 1000% markup because it costs about a .01 to make.. is that a scam? The only reason I write all of this is because peoples misconceptions can really hurt an industry. Obviously watch out for yourself, ask questions, but most importantly get the current price per gram from jewelers and pawnshops in your area and make sure the gold party rep is paying 30 – 40% more.
Or you can always save up your gold, find a refiner, mail the gold in, pay the 10% finer fee, wait a month for a check and make more money directly. Most people don’t want to do this which is why gold parties, jewelers and pawnshops exist… if you dont want to do this don’t sell your gold or do your RESEARCH and you will walk away with cash in your pocket.