How much can you get for your gold jewelry?

You may have heard of cash-for-gold businesses — turn your gold into cash.  The procedure for getting cash for your gold at these kinds of places goes like this:

• Request an envelope.
• Drop your gold jewelry in the envelope and mail it to them.
• They send you a check.

Easy peasy, right? It is. The catch is that some of these places really give you almost nothing compared to what your gold jewelry is worth.  Of ten sites listed on one comparison site, the top one paid almost eight times the bottom one for the same gold necklace.  The top site, ExpressGoldCash.com, currently pays $26.43 for 14kt gold, per pennyweight.  (This is the payout for the lowest quantity tier, which is zero to five ounces.  If you send in more than that, they pay more per DWT.)

The real question is this, though:  How does it compare to gold spot price?  One pennyweight of 14kt gold is about 0.02917 troy ounces, so ExpressGoldCash is paying out just north of $900 per troy ounce.  Spot price is $1,626 per ounce, so they're paying out more than half of spot for the gold.

All in all, that's pretty darn good, considering what they have to do to recoup their purchase.  They have to handle the business costs of shipping the goods, paying you, and insuring your jewelry in transit.  Then they have to test your item to see that the purity is as advertised.  Then they have to melt the stuff and get it into a form that can be sold (usually a three-nines bar).

Here's another reason I know it's a good price.  They advertise what they pay prominently on their site.  They know they pay out a lot for the gold, so it's a selling point.  As I went down the list on the comparison site I visited, the top three listed their current payouts.  (On the third one a little more digging was necessary to get the price, but it was there.)  The other sites did not advertise their prices.  The sites that pay out less don't want you to know how little they pay out until they have your items in hand.

So the takeaway is if you're going to use a cash for gold place on the web, then make sure at least that they advertise what they will pay you right on the site.  You shouldn't be finding out at the time you get your check.