“I really felt like I was suckered,” Zoanne Martz told ABC’s Nightline…
Ms. Martz bought gold coins from a TV ad. The price of gold doubled in the three years she owned them. When she recently lost her job, she wanted to cash them in… but to her shock, she found the coins were now worth less than she paid.
Joe Kismartin bought gold coins from the same company… with a similar result.
[ad#Google Adsense]”When Joe Kismartin took his coins to a local coin ship a few months [after buying],” Nightline reported, “he was told his $5,000 worth of gold coins were worth only about $2,900.”
I would never buy my gold from the guys who advertise on TV or radio.
The reasons are almost too numerous to list. But they come down to the typical sales practices of these outfits. Like car salesmen, gold salesmen have so many angles they can get you with if you don’t know any better (and most people don’t)…
Let’s say you call in to buy gold… meaning gold bullion. They’ll try to “upsell” you to something else. There’s no harm in that in principle. But in practice, it can be awful.
The salesmen will often immediately try to get you to buy higher-priced coins. They earn higher commissions on them. But these coins are often sold to unsuspecting customers at far higher prices than they’d get from more reputable dealers.
Or these salesmen may be lying to you about the current spot price of gold bullion. (You can get the true spot price of gold from www.kitco.com.)
They also might quote you a super-high premium over the melt value of the gold. A “fair” price for non-rare gold coins these days is 7% (or less) over their melt value. Stick to that. (You can do much better than that from my recommended dealers.)
They’ll trick you on the spot price, they’ll trick you on the amount of gold in the coin… they’ll trick you by shifting you over to European gold coins for a higher price. The tricks are endless.
Congressman Anthony Weiner has pursued one of these better-known TV gold companies. Here’s the ABC Nightline segment on it. And here’s a report Weiner published.
Please note, I don’t have an ax to grind with this company, and I have not verified Congressman Weiner’s report. But here’s a quote from it:
The office of Congressman Weiner compared 18 gold coins (9 numismatic [i.e. collectible] and 9 bullion) found on Goldline’s website with their melt value…
Those same 18 coins could be found much cheaper on similar precious coin sellers’ websites. The average Goldline markup in comparison to the best price we could locate on competitors’ websites was 47%, going as high as 101% on one of the coins they offered.
Numismatic coins continued to be a much worse deal, with an average markup of 84% on numismatic (collector) coins and 10% on bullion coins above prices found on competitors’ websites.
Of course, I can’t say from personal experience that this company or any other TV gold company does business badly or illegally. But what I can say is, I do know a different group of gold dealers who really treat customers right…
Thousands of my subscribers have bought gold and gold coins from my recommended dealers over many years. And I’ve rarely received a complaint. (These guys know that if complaints start rolling in, they’ll be removed from my list.) You should also know I don’t receive any compensation for mentioning them.
Personally, I buy coins from my Van Simmons, and have for many years. Unlike the TV gold companies, Van has no commissioned sales people… He has no sales people! It’s just Van and his assistants.
Van is a legend in the coin business. He’s been at it for decades. He helped pioneer ways for the little guy to not get cheated by dealers… He was one of the originators of PCGS – the Professional Coin Grading Service – where coins are graded and sealed in marked containers, so a dealer can’t tell you a coin is better than it really is.
Literally thousands of our readers have bought gold coins from each of these companies, with hardly a complaint.
While it may be true that all TV gold companies are not scam artists, the safest advice is: Don’t buy gold from TV ads.
When it’s time to buy gold, talk to a reputable dealer. The list above is a great starting point.
— Steve Sjuggerud
* Source: Daily Wealth