Cash4Gold.com, the 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. The Florida company ponied up enough bullion Sunday 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 shortchanged them.
In one, New York resident Frank Poindexter complained to the attorney general 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 that he believed were worth $300. Unsatisfied, Valley 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 stood by its satisfaction guarantee. He also said the company’s website made it clear that trading in jewelry to have it melted down was “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 spinoff 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 protection in 1996, and last summer McMahon narrowly missed losing his Beverly Hills estate to foreclosure.
“Heeeeere’s money!” McMahon intones, in a less-than-enthusiastic reference to his “Tonight Show” heyday. He and Hammer then heft a series of “gold” objects they’ve decided to unload. For Hammer, it’s his gold records and a medallion embossed with his own face; for McMahon, now 85, it’s a “golden hip replacement” and a solid gold toilet.
Cash4gold said traffic to its website 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 some from 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 website 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, an amount 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 bureau’s website 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, the CEO, said Cash4Gold provided 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 pawnshops and jewelers,” and that was what might account for some of the grumbling.
Cash4Gold is not evaluating jewelry for its craftsmanship or resale value. Its website says the company pays “based solely on the weight and karat grade” of the items.
“If you have the ugliest piece of gold or the most beautiful piece of gold, to me it’s the same thing,” Aronson said.
He also said the company stood by its satisfaction guarantee, which promises to return items to customers who don’t like the price they’re offered.
“If they’re not happy, let them have it back,” Aronson said. “The problem is people get upset. They think it should be worth more, and it’s not, and they get angry.”
Aronson defended his company’s track record, saying that 269 Better Business Bureau complaints in the last three years out of 700,000 customer transactions was commendable. “Tell me one company in the world that wouldn’t die for that ratio,” he said.
But Southwest Airlines Co., which serves 100 million passengers a year, had only 212 complaints in the same time period, according to the Better Business Bureau database.
Cash4Gold has tried on multiple occasions to pluck thorns from its side by pressuring bloggers who criticize its service.
Joe Laratro, a Florida-based Web consultant, wrote on his personal blog last week that he’d been employed by Cash4Gold for 11 months to run what he called “a Reputation Management campaign.” In one instance, he 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 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.