Cash4Gold.com jewelry exchange stands by its guarantee

Published 8:18 pm Friday, February 6, 2009

Cash4Gold.com, the metal refinery that offers fast money to those who mail in gold jewelry, has hit on a formula that would make ancient alchemists weep: It’s found a way to turn desperation into gold.

And in this economy, that’s a growth business.

The Florida company ponied up enough bullion to buy 30 seconds of famously expensive Super Bowl airtime, capping an ascent from the basement of late-night “as seen on TV” marketing.

But Cash4Gold’s jewelry exchange doesn’t always translate into big bucks for its customers, who have lodged hundreds of complaints with the Better Business Bureau and the Florida Attorney General’s office, saying the company short-changed them.

In one, New York resident Frank Poindexter complained that “he mailed in $150-$200 worth of gold,” but “all he got back was a check for 15 cents.”

Thomas Valle of Colorado said Cash4Gold sent him $16.61 for gold and diamonds he believed were worth $300. Unsatisfied, Valle requested the prompt return of his jewelry, as per Cash4Gold’s terms.

“They have not done that, and it has been a month,” he reported.

Cash4Gold Chief Executive Jeff Aronson said that those two complaints had been resolved and that the company stands by its satisfaction guarantee.

He also said the company’s Web site makes clear that trading in jewelry to have it melted down is “not always the right way for somebody to monetize.”

The airwaves and Internet are filling up with quick-money schemes, not just Cash4Gold and its competitors — Dollars4Gold, GoldKit and GoldPaq — but simple ways to make thousands a week at home, or wring a profit from the depleted housing market.

But it’s Cash4Gold, a 350-employee spin-off of Chicago-based Albar Precious Metal Refining, that has been able to buy its way into the cultural mainstream.

Its Super Bowl commercial featured Ed McMahon and MC Hammer, faded celebrities known for their financial woes — Hammer, once a chart-topping rap artist, filed for bankruptcy in 1996; and last summer McMahon narrowly missed losing his Beverly Hills, Calif., estate to foreclosure.

Cash4gold said traffic to its Web site multiplied by a factor of 10 in the wake of the ad. But beneath the shiny veneer lies a dull reality: Cash4Gold is essentially a buyer of scrap metal. And scrap doesn’t fetch much on the open market.

The Florida attorney general’s office says it is examining nearly 60 complaints about Cash4Gold, including people who were disappointed by the amount of money they received in exchange for their jewelry.

Cash4Gold’s literature says its appraisal quotes are “based upon the current price of gold.” But the exact price it offers on a given day isn’t revealed in its literature, on its Web site or by its customer-service representatives.

An investigation conducted by the CBS program “Inside Edition” sent the company 23 pieces of gold that a jewelry expert had valued at close to $1,000. Cash4Gold sent a check for $209.81, a quote at which the expert scoffed.

The Better Business Bureau has processed 269 complaints nationwide about Cash4Gold in the last 36 months. The pattern of complaints, the BBB Web site says, is similar to what the Florida Attorney General’s office describes: Consumers allege that “the company is not offering a fair value for the jewelry,” and that they’ve had a hard time getting their materials returned.

Aronson said Cash4Gold provides a quick way for its customers to get some value from their jewelry. But, he said, “there are ways for them to make more money sometimes by reselling to pawn shops and jewelers,” and that’s what may account for some of the grumbling.