Gold buyers see more people cashing in jewelry, coins
| Thursday, May 13 2010 11:43 AM
Last Updated Thursday, May 13 2010 11:44 AM
Use these resources to investigate individuals and businesses soliciting gold:
* Bakersfield Police Department (661) 326-1427.
* Kern County Sheriff's Department (661) 391-7690.
* Better Business Bureau (661) 322-2074
* The California State Board of Equalization can verify whether a company holds a valid seller's permit. The seller should be able to provide you with a permit number that you can verify online here: https://efile.boe.ca.gov/boewebservices/verification.jsp?action=SALES or call (800) 400-7115.
* The Kern County Department of Agriculture and Measurement Standards is charged with making sure scales used to weigh gold are accurate. An approved scale will bear the department's seal.
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Love gone bad! Jeweler Raul Zavala checks the grade of gold on this heart shaped pendant that was being sold for cash by a young man after he and his girlfriend broke up.
On the scale, this hodgepodge of gold jewelry weighed in at a hefty 49.6 grams, giving its seller a nice little cash windfall.
Not everything sells. The owner of this bracelet decided not to cash in when she thought it should be worth more.
Father of four Javier Villa has found sporadic agricultural work since he was laid off from his construction job two years ago, but it's not enough to live on.
So on Tuesday, Villa took a 14-gram gold chain to a local jewelry store and sold it for $201.
"The economy is really down," he said, but he could get enough from his gold to pay the light bill.
The weak dollar and concerns about the worldwide economic downturn have sent gold prices soaring. At the same time, Kern County's 18.3 percent unemployment has a lot of desperate people trying to sell out-of-style jewelry or childhood coin collections.
Raul Zavala, owner of Original Designs custom jewelry store, said he's seeing a lot more sellers, especially toward the end of the month, when rent is due.
"Every time, they tell me they're selling their gold because they're struggling to pay the bills," he said.
You can even sell broken pieces just about anywhere these days. Gold traded for June delivery rose $22.80, or 1.9 percent to a record high $1,243.10 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.
But beware. Alongside legitimate gold buyers who will pay you a fair price and screen out stolen property are people who will grossly underpay you, or won't pay you at all. Some issue bum checks, then vanish without a trace.
Unscrupulous dealers are popping up all over the place, said Russ Heimerich, spokesman for the California Department of Consumer Affairs.
"If they don't have a physical address or a permanent location nearby, generally I'd stay away from them," Heimerich said. "You can probably get a better price at a pawn shop or jewelry store, anyway."
William Gavin, manager of Gold Buyers of Bakersfield, said it's hard to compete with fly-by-night companies that don't pay for licenses, permits or insurance and use bait and switch tactics.
"They advertise that they'll pay $1,000 for a necklace and people show up and get $50 for it," he said. "They fall for it even though they should know better. They didn't even pay $1,000 for it when it was new."
In an environment in which gold buyers are setting up weekend booths in motel lobbies, or holding gold buying parties in private homes, or inviting consumers to send in gold by mail, it can be hard to determine who is legitimate.
There's no central location for checking buyers out because regulators are split between multiple agencies.
Local companies buying gold from the public are supposed to obtain a state license from either the Bakersfield Police Department or the Kern County Sheriff's Department, depending on the location of the business. Law enforcement agencies issue the license on behalf of the California Department of Justice.
"The license should be posted somewhere, but if it's not, you should ask to see it," said Bakersfield Police Detective Jim White "If they don't have a license, then they've already demonstrated they're willing to break the law, so chances are they don't treat their customers very well."
Gold is valued based on its weight, and the Kern County Department of Agriculture and Measurement Standards is charged with making sure scales used to weigh it are accurate. An approved scale will bear the same blue seal you see on gas pumps.
By law, even out-of-state companies setting up temporary storefronts in town must have their scales approved by the county in which they are operating.
About 20 percent of scales the county evaluates turn out to be too insensitive to accurately weigh smaller pieces such as earrings and rings, said Craig Hudson, supervisor of the county's Division of Weights and Measures.
Make sure the weight the scale registers is visible, Hudson added.
"Don't take anybody's word for it what your gold weighs," he said. "If you can't see the readout from where you're standing, ask them to turn the scale around where you can see it."
Locally-based companies that buy gold should have a pawn broker or second-hand dealer business license from either the city or the county.
If the merchant is both buying and selling gold, they also will need a seller's permit from the California State Board of Equalization.
As with any business transaction, consumers should do their homework, said Senior Deputy Michael Whorf of the Kern County Sheriff's Department.
"Be aware of who you're dealing with and make sure it's someone reputable," he said. "And comparison shop. Just like you'd shop around to buy gold, shop around to sell it to make sure you're getting a good price."
