Cash4Gold or Cash4Suckers?

Cash4GoldCurrently resting around $1,120 an ounce, gold continues to be a highly traded commodity, especially since the economy started it’s decline.  This means that if you own a pound of gold (16oz.), you are sitting on close to an $18,000 investment. If you’re rich enough to own a bar of gold (London Delivery Goods Bars are the most common gold bars weighing 400 oz.) you have  almost $500,000 at your disposal.  But just how would you go about selling your gold?  You can’t walk into the bank with a bar of gold and say “Give me $448,000 in cash.” And unless you have a crazy salesman, you won’t be able to pay for anything with your gold, either.  Eventually you are going to want to liquidate your gold into cash. And that brings us to Cash4Gold.

This probably isn’t your first introduction to the Cash4Gold idea. The company has done a lot of print and radio advertising, as well as its fair share of commercials.  Strangely enough, the company decided on two well known celebrities for its spokespeople, MC Hammer and the late, great, Ed McMahon, both of whom were well know for mismanaging their finances.  Ironic perhaps, but the company is doing very well financially, which has spawned a lot of competitors with similar names to the gold buying space.


So how does the whole Cash4Gold process work?  Well, the first thing it takes is for a consumer to have gold in their possession that they want to turn into cash.  With gold worth so much these days, more and more people are looking to get rid of gold, so I suppose someone had to fill the demand, enter Cash4Gold.  By giving the Cash4Gold team a call or filling out a form online, they will kindly send you their “refiners kit” at no charge to you.  You are then required to mail in your gold using the prepaid envelope they have provided.  Stay with me now.

Once your gold is received, it is evaluated and appraised by Cash4Gold experts.  According to their website, Cash4Gold will first take a picture of the items you’ve sent in, then put the items through three individual tests.  First, the gold is tested electronically to ensure it’s quality (24 karat vs. 18 karat for example).  If the quality of the gold is different then what you suggest in your refiners kit, it is put through a second test called a “scratch test” where the gold is given a small drop of acid solution then scratched with a needle to find the accurate gold quality.  Finally, your gold is put through an X-Ray fluorescence scan. This scan can determine the amount of gold you actually have while detecting other elements like copper, zinc and lead. (Just to name a few)

Once the testing is complete, Cash4Gold will determine it’s value, based on the current price of gold and what the testing has revealed. A check is issued the same day.  Should you not be happy with the check that you receive in the mail, Cash4Gold offers a 12 day 100%  guarantee, so mail your check back and all of your items will be returned.  Either your happy with the cash, or you want your items back.  On paper, it sounds like there can be no dissatisfied customer right?  On the contrary.


Whenever you trust only one source, you are taking a chance by not getting the most accurate of information.  A quick internet search will tell you there isn’t a shortage of angry Cash4Gold customers, but why exactly are they upset?  Is it because they aren’t happy with the appraised value of their gold, or is something else going on here?

The most glaring piece of evidence that Cash4Gold has going against itself is an article written by the Consumerist just over a year ago.  Usually, an article written with personal opinion from a blogging website isn’t worth a ton of trouble, however, this article continues to be one glaring red “F” on Cash4Gold’s permanent record.  You see, not only was it written by the Consumerist, one of the largest finance blogs on the web today, but it’s source was a former employee of Cash4Gold who had a few bad things to say.

All in all, ten total points were made in the article against Cash4Gold, most of which contradict the simplicity of everything I’ve explained in the pitch above.  Some of the highlights of that article are:

“Your jewelry gets appraised by hand, a magnifying glass, a plastic container, a small weight pad, and a bottle of ORANGISH fluid, which your items are then determined a value for. Not million dollar equipment or specially trained jewelry experts.”

“There have been times when we have received your package and MISPLACED or LOST it at the facility. We CLAIM to not have received the items and even try to convince you that it was lost in the hands of USPS.”

“If you only want the items that we do not find of any value back, you have to pay 10.00 shipping and handling fee to have your own items returned, which varies.”

To be objective, most of the points detail the terrible business practice of Cash4Gold, meaning the shoddy customer service, the delays in getting your check and the real product guarantee they provide.  For me, the most important detail of Cash4Gold is if they pay me a fair price.  To another source!

Just over one year ago, the Consumer Reports team decided they were going to give Cash4Gold a shot.  A lot of negative press had surrounded the company, which offered an opportunity to see if consumers claims were justified, and Consumer Reports decided to “cash in” (pun very much intended).  Twenty-four identical gold pendants and chains were purchased from a jewelry story for $175 a piece and valued to have around $70 worth of melted down gold by a few highly qualified appraisers.  The pendants and chains were then sent off to organizations like, GoldKit, GoldPaq and even a pawn shop or two.  I bet you know how this is going to turn out.

The results of the “investigation” were sadly expected.  Cash4Gold sent back checks that ranged from $7.60 – $12.72.  GoldKit and GoldPaq each sent back checks ranging from $7.81 – $20.59. And the local pawn shops paid between $25-$50 for each piece, making them a clear winner in the process.  Sending your gold to Cash4Gold, in this instance, meant that you were getting 10%-15% of the actual appraised price.  Tisk tisk.


So is Cash4Gold a scam?  In my personal opinion, no, not by definition.  The terms of the deal are clear and no where does Cash4Gold say that you are going to be satisfied with the amount they are willing to pay. Based on the Consumer Reports article, there are certainly instances where Cash4Gold is willing to pay what can only be described as “the low end” of what the gold is worth, but to consider this a scam just isn’t true.

While it’s nice to know that Cash4Gold isn’t a scam, it still is a company that should be avoided at all costs.  I would conjecture that the reason the company is able to advertise during the Superbowl and continue its media push is because it undervalues your gold by so much.  Operating on more realistic margins may bring in more business and better reviews, but I have no doubt Cash4Gold is secure with its current position.  Similar to payday loan companies, Cash4Gold caters to those who are desperate for cash. So if Cash4Gold is not an option to sell your gold too, who is?

If you have jewelry that you are looking to sell, the last thing you will want to do is sell it for the scrap price.  One of the reasons Cash4Gold pays a small amount for your jewelry is because it is only interested in the gold.  Once you’ve melted down a bracelet for example, you’re usually left with a little gold and a lot of everything else.  To keep the best value, have your jewelry appraised by a local outlet or independent appraiser and try to sell it on your own.  Hit the jewelry stores and pawn shops in your area and consider selling it at an auction, perhaps even eBay.  It may take a little more time than mailing it in to Cash4Gold, but if you really have something of value, there is no reason to risk being another dissatisfied Cash4Gold customer.

Note: This article was featured in the Carnival of Personal Finance hosted by

Topics: Reviews

18 Responses to “Cash4Gold or Cash4Suckers?”

  1. It’s really sad what these guys do to their customers. I knew this ahead of time, so when I wanted to sell off my old jewelry, I did lots of homework to find one of the online buying companies that wasn’t a scam. I finally found a really good one – the Silver And Gold Exchange in NH. ( They paid the most, were really fast, and had excellent customer reviews – not to mention ZERO complaints with the BBB. They were really professional and legit. I trust them! There are some good companies out there – but ya really gotta beware! Do your homework first!

  2. These gold buying places and payday loan places are both scams. They both deceive people through expensive marketing to provide a “service” which has no value whatsoever. The argument is that they give convenience, but that’s just false. Alternatives like a pawn shop or even a loan from a local credit union are nearly as convenient but don’t cost you an arm and a leg.

    The difference is that the scam companies have the resources to make sure you know what they offer while the companies that offer something substantive don’t have the resources (because they aren’t screwing their customers).

    The most amusing part is then there are other companies like Goldline, who hype up the recession and trick people into thinking that they need gold incase our economy goes in the shitter. And lucky for us, they are ready to give that gold that you need to invest in! How kind of them to just give us this hand out when they could just hoard it themselves since gold will just keep going up, up up.

  3. Big Spender

    These places have an easy time ripping people off because it’s nearly impossible for a layperson to know how much a particular piece of gold or jewelry is worth. Just like people need to realize that Vegas hotels aren’t built on people walking out with winnings, these sites pay for super bowl commercials and MC Hammer endorsements with ill-gotten gains.

  4. I often wonder why Cash4Gold pays so little for gold when they could really do themselves a service and widen their customer base by widening their wallets a bit. The idea behind their business seems pretty solid, the costs of running it should be fairly low… why can’t they pony up a little more dough and give a fair price for everyone’s gold so most customers actually leave happy?

    Perhaps the gold margins are that high simply to pay for their ridiculous advertising budget?

  5. Oscar At Real Life Money Management

    I was listening to a local Radio Talk Show the other day and they had a guy from a Pawn Shop on as a guest. The subject of these cash for gold commercials you see on TV came up. He and the radio station did an experiment and sent a small sampling of gold to one of these companies. The money they were given was far less than what he was paying people for gold. I can’t remember how much less but it was pretty significant.

  6. I am so glad you are taking on this industry in your post. This is another example of what happens when people are desperately trying to stay above water, inevitably someone will come up with a scheme to help them “get rich quick” by selling their scrap gold. I had also heard the payout from these companies is very little. But really you can sell anything if you have a good marketing plan.

  7. Great comments all. Your right Steve about people staying above water. The’re just trying there best and people are not giving them value they deserve. There are some good questions that you can ask(or research) potential gold buyers before you decide to use them. Here is a couple.

    1. What is their physical address? This my sound insignificant, but if you send your gold to a PO box and you have a disagreement, it may be hard to follow up. There is something about a business having a “physical” location.

    2. What’s Their Security Policy to Protect Your Valuables While it’s at Their Facility/Warehouse? Just because there is insurance on the package that arrives, once it is signed off the insurance ends. So it is important to know what procedures they have in place within the company to insure that your gold does not get lost, mixed up, or even stolen.

  8. Although, as you said, the company is not a scam, I really find it hard to believe that it is still staying in business considering how low they appraise the gold from their customers. And thanks to bloggers like you, the warning is now spreading for netizens to be aware.

  9. This article furthers the testimate of just how many horror stories I’ve personally heard regarding “would-be” victims getting only 10-20% of the true value for their gold! As a Public Relations Director at USGB, Inc. in New York, I am appalled & shocked by our competitors. Although business is indeed business, our company prides itself in offering the highest payouts in the precious metals buying industry….providing atleast 90-96-98% of the current spot price for gold. I am not here to advertise & market our company, I am hoping to warn consumers to please be careful of cable TV & online scams, always do your research on a company before conducting business with them.

    Kevin Morris
    USGB, Inc.
    Public Relations Director

  10. The issue is that many of these cash for gold companies spend a lot of money on advertisements, pay per clicks, etc. Which means more hands in the pot, leading to less money being given to the customer.

  11. I would strongly suggest checking out Captain Cash For Gold before selling gold or silver to ANYONE. I did a great deal of research, online and offline, and learned a lot about this business. I checked pawn shops, jewelers, “gold parties”, hotel “buying events as well as the online buyers. I found that the Captain Cash For Gold paid more than anyone else I could find. I liked the fact that they post the prices they pay per gram (beware of the places that quote in pennyweight/DWT) on a live price chart at I also checked out their Better Business Bureau report and found they have never had a single complaint as opposed to HUNDREDS of complaints some other companies have! I recommend them 100%

  12. Interesting article. Most places are as described but some offers fair prices for your gold. Sure, they are only after the gold content but to sell on eBay sometimes can take months.

    I would say, if you have time on your hands, try to use eBay but if you are after some fast cash, do a little research and try to find out which place pays you the highest prices.

  13. I agree with Rich. Gold selling places are popping up everywhere. i just recently sold some gold and now that I think of it I am wondering why I didn’t just hold on to it. The gold prices seem to be going up. o wouldn’t it be smart to hang on to what you have as an investment?

Leave a Reply