Special Report: All that glitters
Published Thursday, March 3, 2011 2:14PM EST
At the turn of the century gold was worth a fraction of what it is today, and showed no signs of changing. After more than a decade of hovering around US$400 per ounce, it hit its modern-time lowest value of US$251.70 in August 1999, and stayed below US$400 per ounce well into 2004 as the United Kingdom sold off half of its gold reserves.
Then the gold rush hit.
Since then its value has gone up to never-before-seen levels, with gold nudging US$1000 per ounce in 2008 and blasting through that price point in 2009.
Records for gold prices are seemingly being set every few weeks, and with the current price well over US$1400, many people are rummaging through their jewelry boxes to find broken or unstylish items to sell as scrap.
But when it comes to finding a purchaser, it's buyer beware.
Dollars 4 Gold accepts jewelry coast-to-coast
Jewelers have always been willing to buy gold retail, but with gold hitting seemingly incredible prices a host of internet-based companies have set up shop, offering to buy gold from coast to coast.
On their website, Dollars 4 Gold says it has more than 200,000 satisfied customers.
Amanda O'Byrne is not one of them.
"It's appealing. They say that they have the highest payout and if you're not satisfied, well then they send the gold back no questions asked," said O'Byrne.
That wasn't her experience.
"I sent a diamond engagement ring, a band, a few silver items, an earring," said the Chateauguay woman, with the expectation of getting several hundred dollars in return.
She was offered $21.
"I said I want [my jewelry] back right away," said O'Byrne, at which point she was put on hold, and then offered $68.
Still not satisfied she demanded her jewelry back, but despite the company's guarantee that could not happen.
"We were really upset, upset that they had melted it without our permission," said O'Byrne.
Dollars 4 Gold admitted it made a mistake in O'Byrne's case, and offered her $500 in compensation.
Know value of what you're selling
Gemologists, jewellers, and consumer advocates say that as in all things, it makes sense to do research before attempting to sell gold.
Phyllis Richard is the executive director of Jewellers Vigilance Canada, a watchdog over the industry.
She says before putting gold rings in the mail, people need to do their homework.
"Make sure, if it's an internet company for example, that you call them. Find out if there's a real person there. Ask them questions, ask about their process," said Richard.
Most importantly, sellers should know the market, and know what their items are worth so they can negotiate.
"What you want to do is find out what is the price per gram that these companies are prepared to give you." said Richard.
With the price of gold continuing to rise, and speculation that the amount of gold being mined will fall in the future, knowing how to negotiate could become a very important skill.
Pierre Soucy of Bijouterie Robert Richer says many people get upset because they don't make a distinction between what they paid for an item and what they are offered when they sell it as scrap.
"There's a cost of recycling the gold and extracting the pure gold out of it and that's really what people are getting back is the pure gold value," said Soucy.
Another common cause for complaint is that many people fail to recognize that a ring made from 10 karat gold actually contains less than 50 percent of the precious metal.
Consumer advocate Elise Theriault says that internet companies are not, for the most part, interested in precious or semi-precious stones like topaz or emeralds.
"Consumers must be aware that Dollars 4 Gold is buying gold and sometimes diamonds but not the other gems," said Theriault. "You have to take them off by yourself before sending the gold or else you lose them."
Dollars 4 Gold confirmed that is exactly their policy, and they do not pay for any artistic work that went into making jewelry.
The company also says its claim to pay the highest price relates to only to national competitors, and not individual jewellers or pawn shops.
It also said it has made operational changes, including having its call centre in-house, in order to improve customer service.
CTV Montreal also tried out Dollars 4 Gold's guaranteed offer. To see how it went, watch the video to the right.