Monday, 14 February 2011

How can a gold dealer raise its offer by 50%?

The Office of Fair Trading is clamping down on companies which offer cash for your gold. Here's an example.

Mark Turner was tempted by an advert from Postal Gold, in which the firm promised to send him money in exchange for his unwanted gold jewellery.

To check the prices he had been given, we took him to a London jeweller who looked back at gold values when Mark struck his deal more than a year ago.

His haul added up to 32g, for which he was offered £106. The jeweller said he would have paid £224.

In fact, Mark hadn't been satisfied with the initial quote. He complained and Postal Gold reacted by upping its offer to £160.

"It was astounding," he said. If they could increase the price by so much, what were they doing with the first quote?

His girlfriend's spare gold weighed in at 36g, for which they were offered £71. Our jeweller said his price would have been £252.

A year ago, when he phoned to ask for more, the price rose to £109, another 50% jump. Postal Gold told him they had "reduced their fee" to improve the prices.

Mark Turner's opinion now is that a fee of that size is "unacceptable". But all those months ago, he needed the money so he agreed to sell.

He rues the day.

"Be incredibly careful," he warns. And, if possible, get a second opinion.

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