Former Gold Buyers Say They Were Pushed To Lie To Customers

Sick of burning desperate customers by paying bottom-dollar for gold — and tired of being burned by an employer who allegedly let them write checks the company knew would bounce — a pair of former buyers for one of the country’s largest gold-buying operations are pulling back the curtain on the tactics they were told to use when dealing with customers.

One former buyer tells CBS San Francisco that employees would just flat-out lie about the quality of a customer’s gold to get it for the lowest price.

“I think a lot of managers did think it was ok to lie,” she tells the reporter.

She says a lot of the pressure came from the company’s CEO who would watch employees via remote cameras or send in secret shoppers to test them.

“You just never knew when they would be watching you through your computer,” she recalls. “And [the CEO], he would just snap and go off on people.”

She says employees were told to offer less than 10% of the actual value for customer’s gold and received bonuses based on how little they paid for the gold. CBS has confirmed this with a company buying guide.

Another former buyer talks about the practice of lot buying, where employees offer a lump sum for a group of items. Doing so gives the appearance that there are no individual items of high value in the lot.

He also says that once buyers’ checks started bouncing, the company ordered buyers to start sending all the purchased gold back to company HQ, even though California law requires that any gold bought at a roadshow be kept in the county where it was purchased for 30 days.

“I called my District Manager and said ‘So they’re asking me to break the law in California to ship this stuff out of state before the 30 day hold is up?’” he recalls. “And he goes, ‘Well when you put it that way then yes.’”

Several CBS affiliates around the country recently took part in a concerted investigation into these traveling gold buyers. The station in Dallas caught buyers on camera claiming that the gold they were looking at was 14 karat, when the station had already confirmed independently that it was 18 karat.

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  1. Blueskylaw says:

    Sick of burning desperate customers by paying bottom-dollar for gold — and tired of being burned by an employer who allegedly let them write checks the company knew would bounce — a pair of former buyers for one of the country’s largest gold-buying operations have now decided to open up their own gold buying operation where they will offer to pay the most money for your OLD and BROKEN gold and jewelry, or you get your money back (assuming you were stupid enough in the first place to ship your gold and diamonds to someone you didn’t know for a price to be determined by them at a later date).

  2. Bsamm09 says:

    “She says employees were told to offer less than 10% of the actual value for customer’s gold and received bonuses based on how little they paid for the gold. CBS has confirmed this with a company buying guide.”

    That makes sense and I don’t see what the problem is. I thought it would be less than 90% of actual value. They are basically buying wholesale if I’m not mistaken. If they were just buying at spot why would they need to buy from people off the street?

    It’s pretty easy to find the actual value. It is the spot price for 24k. Spot x (18/24) for 18k and Spot x (10/24) for 10k gold.

    • Bsamm09 says:

      I didn’t read the whole article so I assume this is like a pawn shop or something similar.

      • sagodjur says:

        Reading the whole article before commenting is always a good idea if you want to avoid getting multiple comments pointing out that you don’t seem to know what you’re talking about.

        Or else, at least preface your comment with, “I didn’t read the article, but…”

    • kosmo @ The Soap Boxers says:

      I’m curious if you read “10% of the actual value” as “10% OFF the actual value”, based on your 90% comment?

    • LuzioFantazmic says:

      Less than 10% the value of something equates to an item valued at $100 getting an offer to buy at less than $10.

      That’s not wholesale.

    • Happy Tinfoil Cat says:

      In Hong Kong, gold jewelry is bought and sold by weight; the vast majority is 24 karat. Wholesale is maybe 3% less than retail. Of course, workmanship tends to suffer.

    • GoldVRod says:

      “less than 10% of the actual value”… “I don’t see what the problem is. I thought it would be less than 90% of actual value.”

      “Less than 10%” is nine time LESS than “less than 90%”. Just a heads up.

    • Bsamm09 says:

      Thank you everyone for clarifying. I was reading that as offer them 10% less than actual value. ($90 for $100)

      Yea this is a ripoff. Screw this place.

  3. FatLynn says:

    If you do want to sell gold, try to find a local jeweler who has a reputation to protect. They will take a cut, but most will be upfront about what you have, what you can get for it, etc.

    • RandomLetters says:

      Take it to several local jewelers. I had some gold jewelry I was selling and of the three places I visted two were in the ball park at around $700 but one of them offered just $300.

  4. emptydarkone says:

    Sounds exactly like a company called Treasure Hunters Roadshow, or THR and associates for short. The owner has been in the news as of late due to a couple failed business ventures, a divorce, and unpaid taxes. Not to mention a past history of bounced checks. Sad to say that I did work for the jackass of the aforementioned company before he ‘hit it big’. Back then ‘he’ was selling antique toys on eBay, and fleeced untold numbers of people and shipping companies.

    • Raekwon says:

      It is THR in the video.

    • emptydarkone says:

      Guess I should have watched the video first. I guess since Springfield Illinois was not mentioned in the written story above, I didn’t think it could be about Parsons. He operates the same as he has in the past. He won’t appear on camera or grant interviews unless it will show him in a good light, otherwise there is always someone else talking for him. Now he has a ‘Buy Sell Trade’ store here in town. I went in once and as soon as I saw his name on the price tags, I walked right out. Everything was overpriced anyway.

      • RvLeshrac says:

        What does his personal life have to do with any of the rest of the things you mentioned? Unless they’re breaking the law somehow, someone’s marital status is completely irrelevant.

  5. reybo says:

    This may as well be history or fiction, for all it’s worth. Protecting the company by hiding the name aids and abets the criminal activity. One reason the good guys like Consumerist always lose to the bad guys is courage. Bad guys have it; good guys wimp out.

  6. redskull says:

    There are at least 6 of these stores in my city, and it’s not all that big. Ripoff or not, I don’t see how they can have enough business to survive. Are there really that many people selling gold? Who has that much gold sitting around their house?

    • LMA says:

      Yeah, I’m always amazed by this too. Because let’s face it, if you were lucky enough to be born into a family that owned a lot of precious metal and gem jewelry, odds are you’d also have inherited enough other kinds of wealth that you wouldn’t be poor enough to need to gather up grandma’s rings and necklaces to melt down for the electric bill.

  7. Gman says:

    I feel bad for the victims of these rip-off gold buyers. This is definitely one of those industries where strict and harsh regulation is necessary.

  8. yossi says:

    I love how they trick ignorant people by saying “we even buy your useless, broken jewelry” – right because broken gold is worth less than unbroken gold..

  9. raydee wandered off on a tangent and got lost says:

    Too many bones? Not enough cash? Call CASH BONE!

    I feel kind of bad for people who got taken in by these shady schemers, but only kind of. It seems that we’re, as a culture, going to need to start developing a backbone when it comes to dealing with high-pressure salesmen. Those who cannot will inevitiably get fleeced.

    • zibby says:

      That’s part of it; the other part is spending about 3 minutes on the internet to get a little informed before you deal with these clowns.

  10. Hartwig says:

    I thought everyone assumed these places were scams? During tough times the real assholes find ways to make money off those in need. Hopefully these same people will eventually get what is coming to them, a long prison term and a lawsuit which wipes them out.

    • raydee wandered off on a tangent and got lost says:

      While these organizations are obviously scams to those of us who have grown up immersed in the shady dealings of the internet, there are still many people who have not honed their BS-detectors on the steel of Nigerian Princes and Family Members for some reason suddenly stranded in London despite being in the same room.

      Older people have long been targeted by direct marketing schemesters, because they grew up in a more trusting time, are sometimes less mentally firm, and do not quite understand all of this newfangled technology business. Many of these gold-buying schemes focused heavily on people aged 50 or older because they’re both more likely to have valuable jewelry, and because they’ll be more easily taken-in by their scams.

      Yes, all of us know better. But does the average grandma?

  11. AllanG54 says:

    I just think it sucks that’s it getting harder and harder to find an honest business lately. And if anyone here watches Pawn Stars or Hardcore Pawn they know that Rick and Les are not the most altruistic people around always lowball the seller.

    • Thespian says:

      News flash: Pawn shops are not social workers. They are businesses, and like any business they are seeking profit. There’s nothing wrong with that.

    • CPC says:

      Did you see the recent Pawn Stars episode where a guy brought in 100 pounds of silver? Rick gave him a great deal: $111,000, or about 90% of melt value. He might lowball people for some things, but not precious metals.

    • johnyg30518 says:

      Try paying retail pricing for items that take more than a couple of weeks to sell and see how long you stay in business…

  12. Jawaka says:

    I don’t defend what these scam artists are doing but at the same time do people really think that all of these companies are legit? It seems like on every screet there’s a business advertising that they buy gold and pay the highest rates for it. Every commercial break there seems to be an ad for some pawn shop or gold buyer claiming to offer the highest prices for our gold. This tells me two things;

    1) They can’t ALL be offering the highest prices
    2) If everyone wants my gold then perhaps its worth something and I should hold onto it.

  13. HogwartsProfessor says:

    I’m kinda glad I don’t own anything with enough gold to even try to sell it. Seems like no matter where you go, you wouldn’t get anything near what the metal is worth.

  14. Kahlidan says:

    If you’re going to sell gold scrap, make sure to shop around because the % of melt value paid varies quite a bit. It’s best to avoid hotel buyers and pawn shops, and seek out estimates from coin stores instead, as they have a business rep to maintain. If a potential buyer is fair, you’ll receive around 70-80% of the melt value, and the business will get anywhere from 90-98% from whomever they’re wholesaling it to. The reason most people are ripped off is due to ignorance and haste-the buyers obviously want to make money, but there’s a difference between turning a modest profit and screwing someone over.

  15. Trojan69 says:

    I was watching one of the pawn shop shows as the guy working in the shop grudgingly offered $10 a gram for gold that sold at that time for $65/gr. He ever so reluctantly agreed to pay $12/gr.

    Outrageous.