Cash4Gold.  They advertise like crazy and their story is sort of appealing, especially in times like these when money is tight for a lot of people.

You send them any gold jewelry you might have gathering dust in the bottom of a jewelry box.  They look at it, assess it, and cut you a check for the stuff.  If you don’t like their offer, you can say “no thanks” and get your stuff back.  

What’s not to like about that?

Apparently, quite a bit.  If you do a little research, you’ll find a growing army of people who claim Cash4Gold is running a scam.  These gold buyers are getting a lot of negative online attention.

I’d never recommend using Cash4Gold, GoldKit or any of the other companies in the scrap gold business, but I won’t call them scammers.  They do just what they say they’ll do.  They’ll take your gold, they’ll pay you for the gold, they’ll give you a chance to take your gold back.

So, if these guys aren’t taking the gold and pretending like you never sent it, why wouldn’t I use them?  Because they pay horribly.  

Obviously, you can’t expect these outfits to pay market value for gold.  They need to cover their overhead expenses.  They want to make a profit.  They have to process the stuff and find buyers for it.  However, it does seem a bit crazy when people are getting a small fraction of market value when they send in their gold.

There have been a few people who’ve run online case studies about using Cash4Gold.  All of them are rather surprised at just how lousy the offer checks have been.  We might not be talking about pennies on the dollar, but we’re definitely in the nickel and dime per dollar range.

And to make matters worse, it’s obvious that Cash4Gold and Co. know that they’re lowballing the heck out of people.  When testers have contacted the company to reject pitiful offers, they’ve usually been treated to a higher counteroffer.  The second offers aren’t a small percentage boost over the original numbers, though.  They’re often two or even three times as high as that first check.  

What does that tell you about the kind of offers these guys are making?  

There are other reasons to be critical of these operations.  They say you have ten days to turn down the offer and to get your gold back.  They don’t tell you that the clock starts running on your ten days right after they print that first offer check.  If it takes nine days to go from their printers to your mailbox, you have one day to make the call.  It’s not ten days from receipt of the check, it’s ten days from when they came up with a number.

Those who go for the fast cash offers, where the company will make a quick direct deposit instead of sending an offer check, get the shaft even worse.  When you take the fast money you don’t get a chance to reject their offer.  That’s right, you could send off great-great grandma Lucy’s gold ring collection that’s worth thousands and if they decide to give you a five dollar bill, you’re stuck with it.

Look, those of us who encourage frugality may encourage you to sell unwanted and unneeded items.  When the economy is tough, there’s a temptation to part with things like little-used jewelry and to convert it into cash as quickly as possible.  All of that makes sense.

What doesn’t make sense is getting rid of gold by sending it off to one of these joints.  You could probably get a better deal at a local pawn shop–and we know just how generous those guys are.

If you want to sell your gold, you can send it to Cash4Gold and you will get some money.  You’ll also get a rotten deal.  No matter how desperate you are for cash, it never makes sense to take an absolutely rotten deal.

Note:  Here’s an interesting tidbit about Cash4Gold.  They’re worried enough about bad Internet “press” that they’ve offered at least one person a cash payoff to remove a critical blog post.  Reputation management is good policy for just about any business, but trying to pay off critics seems, well, a little sleazy, don’t you think?