7 Tips to Avoiding Sketchy Gold Sellers
Gold appeals to people who like the safety and solidity of choosing an investment that’s had value from the earliest days of human civilization. There are plenty of reasons to view gold as a safe investment, but investing in gold only pays off if you know how to find legitimate gold sellers.
Gold Scams Are Common
Unfortunately, some of the businesses selling gold aren’t reputable and the number of scammers trying to take advantage of gold investors tends to go up with the gold spot price. Your attempt to make a safe investment in gold could end up making you the target of a scam that makes your investment worthless, unless you’re careful.
One report found that over 10,000 people in the United States have been the victims of precious metal cons. Sometimes it’s simply a matter of gold sellers saying the coins they’re selling are worth far more than they are; sometimes the “gold” that investors buy either doesn’t exist at all,or isn’t real gold.
Whatever the particular con, the end result is people losing hundreds or thousands of dollars – or more. You don’t have to avoid buying gold to steer clear of these scams. By following a few simple steps, you can ensure that every gold investment you make is safe and legitimate.
7 Steps to Make Sure Your Seller Can Be Trusted
If you read up on the common gold scams, one clear trend you’ll notice is that most of them could have been avoided if the victims had done a little bit of due diligence before handing their money over.
1. Wait to Commit
No matter how good a deal sounds at first, it’s ok to hold off on making a decision right at that moment. Gold salespeople from legitimate companies are there to help you understand the deals available and make the best choice for you, but some gold scammers use cold calling because convincing someone to make a split decision reduces the likelihood of their victims doing the basic research that would show the caller to be a sham.
If you’re encountering a gold seller for the first time on a phone call, instead of committing to a purchase right away, tell them you’d like to think about it first. If they’re from a legitimate company, the deals will still be there tomorrow. You can always take down their number and call back after you’ve confirmed that they’re calling from a business that’s trustworthy.
2. Google Them
This simple step can help you quickly and easily rule out a lot of illegitimate businesses. If a person or business has been scamming other people, someone’s probably complained about them online. If they’ve been doing it for a while, you may find news stories about lawsuits.
Those are the easiest scammers to identify, but what if you don’t find any information on the company? Some scammers regularly change their business name to avoid being associated with bad Google results. If the gold company you’re considering doesn’t have a website or a web presence at all, then that’s another bad sign. You’re better off finding a seller that’s more established.
3. Check Their Better Business Bureau Listing
When people have been scammed, one of the places they commonly lodge a complaint is with the BBB. That makes the BBB website a good place to turn to get an idea of the reputation of a business.
There are four things you want to check on when you search for a business on the BBB website:
Do they have a listing?This is a better indicator than a Google search to determine if a business is established. It’s easy enough to throw together a website, so while a lack of a web presence is a red flag, the existence of one isn’t a guarantee that the company is reputable. A BBB listing goes a little further to confirm they’re the real deal.
What is their rating?If a company has received a lot of complaints, that will show in their rating. A company with a rating of a B or higher is probably reasonably trustworthy; an A or higher means you’re in good hands. Anything lower than that though, and you’re getting into risky territory.
How long they’ve been in business?Every company has to start somewhere, so a business that’s only been around a year or two isn’t necessarily untrustworthy. But when a business has been around for ten years or more that tells you they take their business seriously and have put in the work to build a strong reputation and develop loyal customers.
What do the reviews say?Many businesses will have reviews from customers right in their BBB listing. You can see the distribution of positive reviews versus negative ones and read over them to see exactly what the unhappy customers are complaining about.
4. Do Some Basic Research
Overcharging isn’t quite on the level of deception that selling counterfeit gold or certificates for gold that doesn’t exist are, but it’s still a practice that will definitely make you feel duped if you learn your gold is worth less than a salesperson said it was. For that reason, instead of outright trusting anything a seller says to you, take a few minutes to do your own research.
If you’re buying gold bullion, check the gold spot price. If you’re considering certified gold coins, do some research on the coins themselves. It’s common for gold sellers to include some kind of fees or markup for what they’re selling (they are a business, after all), but you’ll be less likely to learn after the fact that you bought gold at an extreme markup if you do a little bit basic research first.
5. If They’re Selling Coins, Research the Specific Coins They’re Selling
Numismatics, or buying collectible coins, is a different sort of investment than buying gold bullion. Certified gold coins are frequently a good investment, but since their value is specific to the particular coin rather than the spot price, it can be beneficial to do some extra research to make sure you know what you’re buying.
Most of the certified gold coins that sellers offer have a history that you can learn about with a little bit of online research. Legitimate gold sellers sometimes make educational materials available that help fill you on the particular history and value of specific coins. Look into how rare the coins are, how their value has changed over time, and what makes them special in the eyes of collectors.
If you’ve done your research on the specific coins, you’ll be in a strong position to buy without being duped.
6. Make Sure You Get Your Gold in Hand
Any gold you buy that someone else hangs onto is never 100% yours. A certificate saying you own gold is just a piece of paper that depends on a stranger’s promise to be worth anything. Truly owning gold requires having access to it.
A number of gold scams work by promising people shares in gold they can’t actually get their hands on. If you insist on having your gold delivered directly to you, it quickly reduces your level of risk. Of course, you also need to have a plan on storing it safely once you receive it.
Keep in Mind: As long as gold scammers exist, physical gold will be the safer option to go with than gold certificates or shares.
7. Ask Their Policy on Buying the Gold Back
Investing in gold isn’t a one-step process. At some point down the line, you’ll want to cash in on your investment. When that day comes, someone will have to buy your gold in order for the investment to be worth anything.
Legitimate gold dealers know every piece of gold they sell is valuable and won’t shy away from the idea of buying the gold back down the line. Ask your seller what kind of policy they have for buying gold back. If their answer doesn’t instill you with confidence, then you should consider other options.
The feeling of being duped is terrible, and it’s made that much worse if you were depending on your investment for retirement or helping to pay for your kids’ college. You’re careful with your money in so many other areas of life, make sure you bring the same level of care to how you invest in gold. Reputable gold sellers do exist and, in the right hands, investing in gold can be as safe and stable as you hoped it would be.
To learn more about investing in gold with the U.S. Gold Bureau, which offers a 100% authenticity guarantee on all purchases, request a free investors guide.