SunSuntinel: Shop around to get the best price for your old gold jewelry

By Diane C. Lade, Sun Sentinel

Last Updated: March 12, 2010

South Floridians are digging into their jewelry boxes, eager to generate some extra cash, as gold prices remain at near-record highs. Thousands of businesses have sprung up to accommodate them, promising on television, billboards and banners: “The best price for your gold.”

But the reality is, it can be difficult to tell what’s a real bottom line offer and a good price.

“It’s seller beware. The problem is these days, everyone and his brother are buying gold,” said Dominic Spadea, founder of Certified Jewelry Appraisal, a Pennsylvania-based company with clients from New England to Florida.

The Sun Sentinel went to 10 places that buy scrap gold in Broward, Miami-Dade and Palm Beach counties. We asked for an offer on four 14-karat gold pieces: two bracelets, a woman’s neck hoop and a man’s neck chain. Spadea calculated the gold in our four pieces was worth a total of $1,377.

We visited pawnshops, traditional jewelery stores, discount mall stores and stand-alone companies that buy precious metals. We did not obtain estimates from mail-in buyers.

From our 10 visits, we found:

Initial quotes varied widely, from $643 to $975 for all four items. Traditional jewelry stores offered the most, pawnshops and a shopping center superstore, the least.

Most buyers were reluctant to give written estimates or to show how they came up with their offers.

Several encouraged us to decide immediately whether to sell, saying the price of gold fluctuates and they could not guarantee their offer after we left. Yet in the 48 hours we sought offers, the market value of our items varied by only $18 based on the price of gold.

Intense competition for recession-pinched customers, coupled with high gold prices, is behind these behaviors, some said — especially with more outlets springing up that do nothing but buy precious metals and cater to people needing quick cash.

“There is too much game playing going around. We are looking to be fair and build a repeat customer base so people will come back and buy jewelry,” said Patrick Daoud, owner of Daoud’s Jewelers, which has been in the same Fort Lauderdale location for 44 years.

Daoud’s offered us the highest price, $975, and, like some other buyers, asked if we had received other quotes. These buyers asked us to check back with them when were ready to sell, saying they might raise their offer.

The buyer at CR Jewelers, a chain in bankruptcy with two stores in Sunrise’s Sawgrass Mills outlet mall, initially offered $732 but then asked us to wait. After a phone call, the buyer upped the price to $900.

The company could not be reached at their South Florida corporate office.

We also took our jewelry to Amerivest, a precious metal buyer that handles walk-ins at a small seventh-floor office in Aventura. The company quoted us $832, but e-mailed the next day with a higher offer, $900.

Amerivest’s president asked not to be named for security reasons but said he often follows up with potential customers because he knows they probably have been shopping for offers. “We figure, ‘Why not sacrifice part of our profits to bring them back in?'” he said.

GoldFellow®, a new precious metal buying chain based in Weston, gave a written offer of $799 on a printed form – the only company to put its offer in writing without being asked. It was opening day for GoldFellow®‘s latest walk-in location, a Fort Lauderdale storefront with a bank-like interior. No merchandise was for sale; the business exists only to buy precious metals.

Owners Michael and Robin Gusky ran a jewelry manufacturing and distribution firm for years before selling it in 2007. Then they started GoldFellow®, which originally concentrated on the mail-in market.They now have stores in California and South Florida, which comprise about 40 percent of their volume.

Anyone looking to looking to sell their jewelry should go armed with a value estimate, Spadea said, and realistic expectations. You won’t get close to full market value because the gold buyer is factoring in refining costs, overhead and profit, he said. Consider any offer greater than 50 percent of appraised value, he said.

Still, it’s hard to know how much a buyer is making on gold cast-offs. Ted Bach, general manager of Jewelry Depot in Hollywood, said his price calculations are based on a 10 percent profit margin, minus a refining fee. Jewelry Depot, however, offered $650 for the Sun Sentinel’s four pieces — about 47 percent of that day’s market value.

Bach said the staff must have miscalculated the price when the Sun Sentinel followed up later. “Something is wrong. We always do 90 percent,” he said.