Money

Gold Warning – Sellers Beware!

by Michael Fuljenz  – 

Would you accept only $60 when selling a gold item that’s actually worth $10,000?  Yet, that unscrupulous “low ball” offer actually was made.

In recent years I’ve provided award-winning expert assistance for newspaper and TV undercover investigations of so-called “hotel buyers” operating in a half dozen states.  You’ve undoubtedly seen the big advertisements proclaiming, “HIGHEST PRICES PAID,” that are placed by some of the itinerant buyers of gold and silver jewelry and coins who travel from city to city.  In some cases, those ads should state, “SELLERS BEWARE,” because you may see bigger promises than payouts.

I loaned $43,000 worth of rare coins, bullion and “scrap” gold (such as broken jewelry) for undercover reporters to offer various hotel buyers to test buying prices.  Even though some of the buyers actually referred to price guides or looked up information on laptop computers before making an offer, they often made offers significantly below the melt value of rare coins that had a numismatic value far above their bullion content.

When asked by a reporter how much he’d pay for the $43,000 worth of items, one buyer offered only $11,600 for everything.  That’s about 25 cents on the dollar.  Another buyer offered just $30 for a 14k gold bracelet with a melt value of about $350.  And another traveling buyer, the one who offered only $60 for a rare, mint state 1925-dated Denver Mint Quarter Eagle ($2.50 denomination U.S. gold coin) valued at $10,000, made an offer of only $680 for $25,000 worth of certified rare coins.  That’s only about three percent of their actual, easily determined value, and that would be a financially devastating loss to any unwary seller.

In addition to not paying fair market value for rare coins, bullion and jewelry, some of the traveling gold buyers refuse to give receipts so you have no proof of the cash transaction if you later want to dispute it.  The scales used by some of the buyers to weigh gold jewelry may not have been lawfully registered with government agencies to test their accuracy. That could result in underweight measurements when someone is selling their gold.  In fact, some traveling buyers may not even be registered with the state or local coummunity in which they’re temporarily setting up, and may not be complying with government registration procedural requirements or cooperating with local law enforcement agencies.  Sellers beware!

The results of those investigative stories are not necessarily indicative of all hotel buyers across the country, but they certainly raise the question: how do you protect yourself when you want to sell coins or jewelry?

First, prepare in advance.  Know beforehand what you are selling and get more than one offer, preferably in writing.  Consult with local merchants in your community who may not have flashy advertising, but who may offer you considerably more money for your coins and jewelry.  Most legitimate coin dealers will offer 70 to 80 percent of melt value for jewelry; certainly not merely 10 percent as one traveling hotel buyer offered.

Remember: if you don’t know gold and coins, you’d better know your gold and coins dealer.  Check the buyer’s rating with the Better Business Bureau (www.BBB.org).

Mike Fuljenz is the editor of the Numismatic Literary Guild (NLG) award winning “Michael Fuljenz Metals Market Weekly Report,” and the numismatic consultant for First Fidelity Reserve. His award winning radio show can be heard on KLVI News Talk AM 560 from 6 p.m. to 7 p.m. CST on the last Monday of the month.

Read more articles by Mike Fuljenz

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12 Comments on "Gold Warning – Sellers Beware!"

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I used the word unfair besuace I had to randomly stumble across the information that the collectibles were retiring. I would have thought this would be something that would appear in one of those little messages on your profile (which I notice has appeared now one day before they are being stopped). It is not the retirement of the collectibles in itself that I was deeming unfair.Four days before my post, Fission had asked the very same question about exactly which collectibles were being retired and did not get any response, which I thought was very poor and that was why I was feeling miffed.I did not realise you had to read the blog to find out about these things, and I’m sure 99% of the other cheez users do not realise it either.

rescent article’s about the BBB are that the way you get a top rating is to send them some gold (money) and you go to the top rating so best to get three bids and make sure its never out of your site and you have a list so you get back everything you gave for the est these guy’s are sharp

knwoing how poorly the dollar is doing why would anyone want to sell their gold?

FYI Also beware that diferent dates on older silver coins (pre 1966) have different silver content thus valued differently

Very helpful article. I’ve been noticing gold buyers pop up everywhere I look it seems, even a local store advertises “as seen on TV” with a dancing billboard girl. Are you kidding??? Glad this guy (Michael Fuljenz) is willing to help members like me not get taken advantage of. Loved his last article to bout protecting my gold from thieves – including using my gun to do it!

Ohai, look, I don’t hab teh real coinage to buy the lol-coinage, an I’m kinda quiet (few fnedris). But I gots tons ob snowcats, an sweaters, lots of uther stuffs I don’t need. So I was thinkin why not trade a couple of thos for what I really need (coal, anna Santy hat -I’m cold!). Ob course I too went without teh turkey-burd. Dey’s all woth coinage anyways an do I really need six snowcats an fore paers ob elfy shoes?? Maybe a barter system would be nice. KTHXBAI

The comment by me should be “seller beware” not “buyer beware”.

What concerns me is the possibilty that most jewelry items or coins are being sold by non-knowledgeable owners to most buyers, (not all buyers), for “melt value”, instead of real coin or jewelry value especially if there are any gemstones involved. Even the melt value on an item is suspect based on my experience. The fact there is an amount of cash received that may be “needed” at the time by the the seller many times offsets the better judgement of the seller taking the time to check the sale of anything with a second or third prospective buyer. There could not be any doubt that the vast majority of non-knowledgeable by far exceeds the “knowledgeable professional” gold/gemstone/jewelry/coin buyers and this is the basis for “buyer beware”—–always check two or three other buyers before selling. It doesn’t guarantee 100% honesty but you stand a much better chance in receiving a… Read more »

We recently, within the last year or so, had two visits from “hotel buyers” in my town of approximately 45,000. We also have a newspaper, the only one, that gave them loads of free publicity, in the form of an editorial, and a feature article. More than one potential customer, after receiving their best offers on a few coins, had the offers tested by way of taking these items to both of our coin shops for their best offers. Without exception, the local coin shops offered substantially more to these individuals. That made a believer out of them. I wonder how many thousands of dollars were made unscrupulously on those two occasions.

If someone is looking to sell either silver or gold coins, especially if the coins are either early 20th century or older, you should really get an estimate from at least 3 different coin dealers. Yes, this may seem time consuming and something of an over-kill to some, but it is after all your best way to ensure you’re receiving a fair market price for your coins. A honest coin dealer should be willing to give you a written estimate of your coin’s worth.

The numismatic value of older silver and gold coins, even in lower grade condition, is usually much higher than the simple melt value of the metal. The article by Mr. Fuljenz does a great service to older Americans looking to maximize the value received for the silver and gold coins they possess.

What are six 19th century silver coins worth. I sold them for $90.00 and wonder if I got a good price. I still have others.that I did not sell.

Readers, if you live in a community that has a newsletter, do forward this article for publication to the editor in your community. In today’s difficult times many seniors are having to sell gold that they’ve held for many years and even for generations.

Unscrupulous buyers will gladly buy gold coins for a percentage of their “melt” value, then resell them for their numismatic value. Talk to your jeweler or to a trusted coin dealer FIRST before selling anything, and be sure to get MORE than one quote before you sell.

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