Postal gold-buying services
There has been much wittering today about the 'poor value' given by the postal gold-buying services that have sprang up recently, such as "Cash4Gold", famously advertised by DJ Goldie.
When I saw the headline "Cash for gold firms advertising on TV offer 'shockingly bad value'" I expected to read about the differential between the price per ounce paid by these services and the 'spot price'; the price of gold on the open market. I was very wrong.
Consumer magazine 'Which' bought various items of 'gold' jewelry brand new, and then got prices from the postal gold buyers for said items. Lo and behold they were offered considerably less than they had paid for the jewelry.
WHAT DID THEY FRIGGING EXPECT??????
I have a thought experiment for you: Go and buy a brand new car (for say, £15,000) and see how much a scrapyard offers you for the steel in the car. It'll be about £200. Do the same with any metal product you can imagine and the result would be the same. When you buy any manufactured good brand new, you are paying for the effort of making the thing, the perceived value to you, and for the raw materials. You cannot reasonably expect (unless you're a complete fucking moron) to get as much money for the raw materials as for a finished product.
Jewelry is massively overpriced anyway, the prices are based almost entirely on "OOH SHINY!" and have little to do with the cost of the materials or workmanship. That's why Argos charges £30-or so for a thin crappy pair of 9ct earrings. 9ct 'gold' is hardly gold anyway, it's mostly whatever cheap metal was lying around at the factory with a bit of gold melted in to make it look a bit 'golden'. 9ct 'gold' is only 37.5% actual GOLD.
"One of the poorest deals from CashMyGold was at just under £10 for a £215 9ct gold bangle"
No shit.
This is more a case of "gold bangle massively overpriced and contains little gold" than "CashMyGold ripping people off"
Of course from either article it's impossible to say whether these services actually ARE ripping people off, since they give no indication of how much any of them are paying per unit weight of pure gold. Without that figure the whole thing is meaningless.
All I can say is if a company with a decidedly niche market (like gold buying, as opposed to say washing powder or cars) can afford to advertise on TV, they are unlikely to offer superb value.
Links:
http://www.telegraph.co.uk/finance/personalfinance/investing/gold/7036987/Cash-for-gold-firms-advertising-on-TV-offer-shockingly-bad-value.html
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article6996590.ece