Beneath Cash4Gold's shiny veneer, a dull reality
Cash4Gold.com, the Florida metal refinery that offers fast money to those who mail in baggies full of jewelry, has hit on a formula that would make 13th-century alchemists weep: It’s found a way to turn desperation into gold.
And in this economy, that’s a growth business. Last week, the 8-year-old 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.
A rising tide might lift all boats, but an ebbing tide draws buzzards. The airwaves and netways 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, which now boasts 350 employees, that has been able to buy its way into the cultural mainstream. In a bit of clever typecasting, its ad featured Ed McMahon and MC Hammer, faded celebrities known for their financial woes — Hammer, once a chart-topping rap artist, filed for bankruptcy protection in 1996, and last summer McMahon narrowly missed losing his Beverly Hills estate to foreclosure.
“Heeeeere’s money!” McMahon intones, rather less enthusiastically than he did in his heyday. He and Hammer then heft a series of “gold” objects they’ve decided to unload. For Hammer, it’s a medallion embossed with his own face and his gold records; for McMahon, now 85, it’s a “golden hip replacement” and a solid gold toilet.
Cash4gold said it saw traffic to its website multiply by a factor of 10 in the wake of the ad.
That the commercial focuses on gold and says little about cash is just how Cash4Gold likes it. The company’s advertising is loaded with gold bars, fistfuls of diamonds and piles of expensive-looking jewelry (even though, of course, it’s those things that the consumer is giving up. )
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.
Just so, Cash4Gold’s promise to pay “top dollar” doesn’t always translate into big bucks.
The Florida attorney general’s office is examining nearly 60 complaints about Cash4Gold, including people who “are sending in their jewelry and getting extremely small checks in return,” according to a representative.
One complaint filed with the Florida attorney general ...
... by a New York resident, Frank Poindexter, said that “he mailed in $150-$200 worth of gold,” but that “all he got back was a check for 15 cents.” A second, from Thomas Valle of Colorado, read, “I sen[t] my gold and diamonds worth $300 and they sent a check returned for $16.61.” Unsatisfied with the offer, he requested the prompt return of his jewelry, as per Cash4Gold’s terms. “They have not done that, and it has been a month.”
Cash4Gold’s literature says its appraisal quotes are “based upon the current price of gold.” But if you’re looking for something more specific — like the exact price it's offering on a given day — you won’t find it in the company's literature or on its website, nor is it available from customer service representatives.
An investigation conducted by CBS’ “Inside Edition” sent 23 pieces of gold to Cash4Gold after a jewelry expert put the price of the shipment at close to $1,000. Cash4Gold sent a check for $209.81, a quote at which the expert “laughed and said it was not a very good offer.”
The Better Business Bureau has processed 269 complaints nationwide about Cash4Gold in the previous 36 months. The pattern of complaints, the BBB website says, is similar to what the Florida attorney general’s office described: 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. Cash4Gold’s policy is that if you don’t like the offer you’re given, you have to ask for your stuff back within 10 days.
Jeff Aronson, CEO of Cash4Gold, defended the company on several grounds. First, he pointed out that melting down jewelry is “not always the right way for somebody to monetize,” and that his website makes this clear. Cash4Gold provides a quick way to get some value out of the items, he said. But “there are ways for them to make more money sometimes by reselling to pawnshops and jewelers.”
And that’s what may account for some of the grumbling, Aronson said. Cash4Gold is not evaluating jewelry for its craftsmanship or resale value. “If you have the ugliest piece of gold or the most beautiful piece of gold, to me it’s the same thing.”
On the matter of the BBB complaints, Aronson pointed out: “There were 260 complaints out of 700,000 [customer] transactions. Tell me one company in the world that wouldn’t die for that ratio.”
(After about three minutes of searching on the BBB’s web database, I found that Disneyland, which attracts more than 10 million visitors a year, had 30 complaints to Cash4Gold’s 269. Two minutes later I found Southwest Airlines had 212 complaints. And it serves more than 100 million passengers a year.)
Still, Cash4Gold lives largely on the Web, and has tried on multiple occasions to pluck online thorns from its side. In one attempt to manicure its image, the site hired a Florida-based web consultant named Joe Laratro. Laratro wrote last week that he’d been employed by Cash4Gold for 11 months to run what he called “a Reputation Management campaign.” In one instance, Laratro reached out to a website whose unflattering review appeared among the first few Google search results for “Cash4Gold.”
The owner of that site, Cockeyed.com, received an e-mail from Laratro in which he said that Cash4Gold “would really like to make it worth your while to take it down or make it more positive.”
“Is it worth a few thousand to take it down?” Laratro asked.
Instead of removing the post, Cockeyed owner Rob Cockerham posted Laratro’s e-mail online.
Cash4Gold has a penchant for name-dropping, too. Until last week, a big ad on its home page asked visitors, “Did Derek Jeter Sell his Gold Gloves to Cash4Gold?” When users clicked on the ad to find the answer, they were taken to an obscure site featuring a satirical story about Jeter’s decision to melt his precious trophies.
I called the Yankees anyway, just in case.
A spokesman answered, and I asked if Jeter had indeed decided to hawk the Gold Gloves.
“Are you serious?” came the reply.
-- David Sarno