From Jewelry to Jackpot

By Christopher D. Kirkpatrick, The Charlotte Observer, N.C.

Mar. 23–Next to a simply lettered placard that reads, “We Buy Gold,” precious metals dealer Chris Walters pulled apart a tangle of necklaces and bracelets as a customer awaited his verdict.

With gold reaching its highest nominal price ever this month — $920 an ounce Friday and over $1,000 earlier in the week — the thick mash of jewelry looked like a fortune.

As some consumers consider cashing in on the precious metal’s historic run-up by cleaning out their jewelry boxes, traders like Walters and other jewelers urge caution. Customers should shop around for the best prices for their old jewelry and look for the most reputable dealers in their neighborhood or on the Internet, they say.

Walters, his fingertips stained yellow, immediately spotted some gold-plated items misstamped 14K gold in the pile. He held up other pieces to inspect through his jeweler’s eye, like a monocle, as he separated the faux from the genuine.

“The good news is that some of it is gold,” he told 18-year-old John Elks, who was at Walters’ Diamond City Jewelry in Indian Trail on Friday.

Elks called his mother and she approved the deal for $95 for a few items that were actually gold. He said his mom was clearing out jewelry she doesn’t wear anymore.

With the price run-up, Charlotte area jewelry stores are seeing more customers inquiring about cashing in broken earrings, unworn gold chains and other gold pieces for cash.Interest in selling of gold mirrors talk of recession, says Dan Miller, owner of Queen City Jewelers uptown. He’s noticed an increase for the past five or six months, and his business has been steady lately.

“It’s what I call scrappy type-material: broken chains, rings they don’t want anymore,” Miller said. “People are taking the money to pay bills. Usually, they’re having a hard time coming up with money.”

Buddy Simon, owner of Karat Patch Jewelry on Providence Road in Charlotte, said his shop only takes gold as trade-ins when customers buy other items, he said. Some are surprised by how much they can get, including one customer he recently gave $1,800 credit for a piece of gold jewelry she didn’t like or wear.

Tim Griffin, 42, of Fort Mill, stopped by Perry’s Fine, Antique & Estate Jewelry at SouthPark last week, to sell a class ring and necklaces. Some 20 minutes later, he left with $180. He said he hadn’t thought about what he’d do with his windfall. “I’ll probably get something for my wife.”

While the allure of making a quick buck brings folks in, owner Ernest Perry says there’s also a larger cultural issue at play. “Everybody’s got stuff to get rid of,” he said. “Most are saying they haven’t worn this stuff for years, and they’re tickled to death to get the check.”

Charlotteans Johnny Sturdivant, 53, and Lem Long, Jr., 86, brought watches and chains to Perry’s on Monday. Plans for their potential windfall? “What do you do with money?” Long asked. “Some people say it’s made to spend, I say it’s made to save.”

Walters, whose family owned The Gold Mine in Charlotte from 1979 to 2000, said he pays customers about 90 percent of the market value of gold.

He paid about $4,500 for gold jewelry from 14 customers on Friday, including Elks. A sign on his counter tells customers to sell their old jewelry now, while prices are still high.

“I think in the short term, the next two to four weeks, it’ll be fine,” he said. “I don’t see it going away over night.”

Travis Kukovich, a designer goldsmith who owns William Travis Jewelry in Chapel Hill, said customers need to shop around for the best price: “You have to call two or three places. It’s the same exact thing you would do if you were going to remodel your kitchen.”

Consumers also need to remember that jewelry with moving parts, like a chain or earrings, has more impurities and is worth less than a ring of the same weight, he said. “All gold is not equal.”

Those broken earrings, chains and rings have to be resold to refiners, who take their cut and push down the return for consumers. Refiners melt down gold jewelry into pure gold to be traded.

But consumers can go directly to the refiners, who charge local traders and jewelry stores about 3 percent, plus appraisal fees. Some refiners cater mainly to jewelry stores and gold traders, others, such as USGoldBuyers.com, advertise on the Internet and market directly to the public.

USGoldBuyers.com pays 96 percent of the current day’s market price. The company can give a quote over the phone based on the weight of the piece and its gold content, sometimes stamped on the piece. The company pays for overnight shipping and then once the value is confirmed sends a check or wires money.

“Think of us as the graveyard for jewelry,” said Jose Caba, a customer service representative with the company in New York City’s diamond district.

The company had to stop accepting packages last week because of a backlog due to recent publicity after it was mentioned in the Wall Street Journal, said customer service manager Steven Sanders. He said packages increased to 1,500 per day from about 500.

He said consumers should check first with a local jewelry store to see if their piece is worth more as a piece of jewelry because of its design or historical value than as a melted down piece of metal. He said consumers should always check with the Better Business Bureau about a gold dealer’s reputation.

New York City’s BBB Web site listed five complaints against USGoldBuyers.com in the last three years — all of which had been resolved.

Staff writer Rachel Sutherland and Researcher Maria Wygand contributed.

‘IT’S ALL ABOUT REPUTATION’: Sheldon Goldner, president and owner of Illinois-based Precious Metal Refining Services Inc., said there isn’t a central list of reputable gold dealers. “It’s all about reputation.”But if a buyer claims to always pay a certain percentage more than the competition, then be wary, he said. “There are a lot of thieves out there.”

You can check businesses’ reputations via the Better Business Bureau, which maintains a national Web site at bbb.org.

—–

To see more of The Charlotte Observer, or to subscribe to the newspaper, go to http://www.charlotte.com.

Copyright (c) 2008, The Charlotte Observer, N.C.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.