The chances are you've seen a variety of promoted cash for gold adverts on Google, Facebook and Instagram. These companies rely on their slick and persuasive marketing tactics to convince you to send your gold off. What you're unlikely to find in any of their content is any clear indication as to what rates they actually pay.
If you see a Facebook or Instagram advert, take a look at the comments—if they haven't been hidden, they can be very revealing. Time and time again, commenters ask the advertiser what rates they pay. Some ask for a specific price per gram for a certain gold purity, and other commenters ask what they pay for a specific item, like a gold Sovereign. At no point will the advertiser answer with a clear response on what they pay.
Why don't freepost cash for gold companies quote their rates?
The simple answer is if they did, you'd be less likely to use their service!
Being open with their rates would allow you to compare their prices and make an informed decision as to whether their deal is reasonable, or not. Unsurprisingly, their rates are often really poor - those adverts and freepost envelopes cost the company a lot and that money needs to be recovered. Our own investigation (conducted impartially by a third party) demonstrated these companies typically pay only 40% to 60% of the actual value of the gold. That's why they'll do everything in their arsenal to persuade you they're the best choice without giving any concrete facts to back up their claims.
The top answers given when you ask what rate they pay for gold
If you comment on an advert posted by a freepost gold buying company, here are the top three answers you're likely to receive:
1. We need to assess your items first to value them accurately
This is a convincing answer because it suggests your items will be expertly assessed and valued, not just on their gold content, but also as objects in their own right. In reality, you'll only likely be offered a low percentage of the melt value of your gold. In the worst cases, the offer will be as low as around 20% of the actual value.
2. Our rates depend on the quantity you send. We pay up to £37.52 / g for 9ct gold
Another convincing answer because the figure they quote is really high, often close to or matching the actual live market 'spot' price for that purity of gold. In reality, the devil, as is said, is in the detail. The key element in their phrase are the words 'up to'. Whilst they may pay 'up to' £37.52 / gram, it's far more likely you'll be offered significantly less - usually somewhere around half the amount. When challenged on the price offered, the typical reason given for the lower rate is that you, the customer, hasn't sent in sufficient gold to qualify for the top tier rate.
3. We've sent you a DM (direct message)
This is a great response because it demonstrates to everyone reading the comments that the company is responsive in their feedback whilst not publicly answering the question! The likely reply via DM will be one of the first two answers above.
4. No answer
Okay, so this article was about the top three answers, so this is the 'bonus' one! Time and time again, you'll see readers asking 'how much are you paying per gram for 9ct gold?' These questions will often go unanswered. Why? Because the advertiser knows a significant number of viewers will simply not bother to forensically trawl through the pages of comments, so a certain percentage of questions can be safely ignored with minimal negative impact.
Other tactics
If you visit some of these freepost cash4gold websites, you'll probably come across some other tactics to convince you they're the most trusted gold buyer in the market. Here are a couple to look out for:
Price match guarantees
There are many companies who 'guarantee' to pay the best prices for your unwanted gold, and we're more than happy to help you test out these bold statements! If you've already sent your gold away to one of these companies, don't accept their offer until you've had a comparative quote from us. At minimum, we can help you negotiate a better rate and we can help you become fully informed as to the real value of your gold.
We currently offer a price guarantee service for these companies:
Misleading gold prices
It's not uncommon to find a table of gold prices on freepost cash4gold sites, quoting rates for the common purities, like 9ct, 14ct, 18ct and 22ct. These are often the current 'spot' prices for the various gold purities.
What are spot prices?
The spot price is the rate that gold is currently trading at on the live bullion market.
The spot price is not the actual rate you will be offered.
Look carefully and you'll find in much smaller print a statement indicating the rates the company pays is based on a percentage of the spot rate. They won't however disclose what this percentage is.
Quoting the current spot prices isn't necessarily a bad or misleading tactic - we quote them at the top of our site! However, we're perfectly happy to publish the gold prices per gram we pay. Doing so allows you, the customer, to make an informed decision about the service we offer and the rates we genuinely pay.
We think this is the fair and ethical way to trade.
We hope this article has been informative. If you have any questions about selling gold, feel free to contact us or give us a call. We're happy to talk through our service and will give you clear answers to any questions you have.
