Cash4Gold (sometimes stylized in advertising as Cash4Gold.com) serves as a mail-in refinery that buys gold, silver and platinum primarily from jewelry.
Cash4Gold.com's original ownership team was beset by Better Business Bureau complaints and filed for bankruptcy after overspending on large advertising efforts including a commercial which aired during the Super Bowl. In 2012 the assets of the company were purchased by Direct Holdings Global. The company changed its name in an effort to improve the Better Business Bureau rating; complaints, however, continue about their questionable business practices.
Video Cash4Gold
Process
Consumers request a pre-paid envelope known as a "Refiner's Pack" online or by phone. Customers place their gold materials / precious metals in the pack and ship it to the Cash4Gold refinery in Florida. A Cash4Gold employee weighs the items, photographs them and assesses the items using such tools as acids, X-rays and electronic testing devices. They then make the customer a financial offer for the submitted items, and forward a check for the determined value to the customer. Should the customer decline this offer, they have 10 days from the date on the check to ask for their jewelry to be returned.
Many people have complained about the fairness of this process and the valuations of the gold they mailed to the company. Every effort was made to ensure that all customers were fully aware of the valuation process, and had the opportunity to reject the financial offer within the stipulated timeframe.
Cash4Gold also purchases diamonds, but will not pay for additional gem stones and recommends they be removed from jewelry prior to sending the jewelry for evaluation.
Maps Cash4Gold
Security measures
To ensure customers are the legal owners of the jewelry that is sent in, Florida passed legislation aimed at regulating the online gold-buying industry. Cash4Gold worked with Florida legislators to draft the bill. This new law also requires the company to get a driver's license number and a sworn statement from customers stating that they own the items they are selling. Sellers must be at least 21 years old and the senders' addresses are verified.
CNN visited Cash4Gold headquarters in March 2010 to see the company's methods of collecting, processing and melting gold jewelry. In the visit, steps shown included customer background checks, a separation of the jewelry, then processing the items for evaluations before sending customers their checks and melting items into gold bars. In a follow up article written in 2012, CNN Money described some of the business practices that led to the company's bankruptcy that same year.
Company history
Founding
Green Bullion Financial Services LLC was formed in April 2007, and traded under the principle name of Cash4Gold (sometimes stylized in advertising as Cash4Gold.com), eventually being located at 2800 Gateway Drive, Pompano Beach, Florida 33069, and being derived from Albar Precious Metal Refining, created by former CEO Jeff Aronson. Due to the rapid growth of their trading and operations during the latter part of 2008 and into the first quarter of 2009, there was a need to address some specific operating issues. Future investors were concerned that the Company would struggle to process the forecasted volume of Refiners' Packs. So a consulting company (Synergetics Installations Worldwide Inc.), based in Portsmouth, New Hampshire, were invited to analyze and then upgrade the current operating processes, with a view to meeting customer service levels and processing significantly higher volumes. The first requirement was to relocate the entire business from relatively small premises to a medium-sized and secure interim site, pending the redevelopment of an existing commercial / industrial unit in the Pompano Beach area, which then became their headquarters in the US. Processing facilities and procedures were upgraded, as were the customer call centre operations and administrative functions. Once the customer service levels and performance of these processes had stabilized within the US operation, the Company launched the Cash4Gold proposition into the United Kingdom, then into other mainland European countries. David Knight, SVP for international marketing and expansion, joined the team in July 2009 from eBay. Shawn Kernes, a former Chief Technology Officer at StubHub, was the company's COO.
In 2006, Cash4Gold had sales of $40 million with 14 employees. By May 2009, the company employed about 300 people with nearly 800,000 customer transactions. As of 2010, the company has received more than 1,700 ounces (48 kg) of gold per day with 94% of respondents accepting its cash offer. The rapid growth of Cash4Gold was based on some clear beliefs: firstly, that the majority of potential customers would prefer to monetize their valuables through the annonymity of usng a Refiner's Pack, rather than visiting a local pawn shop: secondly, that the majority of those customers were prepared to accept a difference between the Cash4Gold valuation and their local pawn shop valuation for the benefit of foregoing a visit to their local pawn shop: and lastly, that the use of both mass and target marketing through all forms of media highlighted this opportunity for many people who were by then experiencing a downturn in both the North American and global economies.
Controversy
Under the leadership of Jeff Aronson, the company claimed to pay between 20-80% of the melt value of the items to the seller though independent reports suggest less than 20% of the value is the norm. The norm for the gold-buying industry is for the seller to be paid more than 90% of the value of the gold.
Channel 10 News in San Diego did an investigation where they sent in a ring containing over 2 grams of gold worth $17 in weight to three different sites. The payout from Cash4Gold was $7.91. Consumer Reports, using its "mystery shopper" team, sent 24 identical gold pendants and chains (purchased for $175 each) to Cash4Gold.com and its competitors. The determined melt value of the jewelry was calculated at around $70 each when gold was above $900 an ounce. In comparison with Pawn shop and Jewelry store quotes (which ranged from $25 to $50), Cash4Gold.com quoted between $7.60~$12.72 melt value for the jewelry. Similar low quotes were also given by Cash4Gold.com competitors GoldKit (around $7.81~$20.59) and GoldPaq (around $8.22~$13.11).
When Rob Cockerham, a blogger, detailed drastic changes in Cash4Gold's valuation of jewelry after a complaint is made about an initial undervaluing, a search engine optimization consultant offered "a few thousand dollars" for Rob to remove the criticism. Cash4Gold CEO Jeff Aronson stated they had nothing to do with the incident, though the consultant stated "everyone (at Cash4Gold) was well aware of what was going on." On Cash4Gold's blog, the company afterwards posted a "clarification statement" allegedly by the consultant contradicting that quote: "Cash4Gold was not aware of all of the tactics being using (sic) in my reputation management services."
After a whistleblower posted on ComplaintsBoard.com discussing the inner workings of Cash4Gold.com, The Consumerist and other blogs were hit with a defamation suit by Cash4Gold.com after running the postings. In September 2009, Cash4Gold.com dropped Consumerist from their lawsuit.
Bankruptcy and New Management
Cash4Gold filed for bankruptcy in July 2012 with its assets purchased by Direct Holdings Global for $440,000.
Direct Holdings Global instituted sweeping changes, including a new operations process and customer service center.
Advertising
Super Bowl XLIII advertisement
The Super Bowl XLIII advertisement featured Ed McMahon and MC Hammer, both of whom were well known for their financial troubles later on in their career. The 30-second advertisement was created and produced by Havas Edge (formerly known as Euro RSCG Edge) and directed by Super Bowl ad veteran Bryan Buckley and his Hungry Man Productions. Sources place the cost for the 30-second advertisement at $2.4-$3 million. Cash4Gold also played a 60-second ad in NBC's pre-game show, making it the first direct-response advertiser in that venue.
The spot received considerable news coverage and was seen by many commentators as a harbinger of the economic situation which was bottoming out in the United States at the time it aired. CNBC's Sports Biz blog touted the Cash4Gold spot as "the most relevant ad in this entire Super Bowl."
Commercial Sponsorships
In the past Cash4Gold.com has signed sponsorships with Milwaukee Bucks, a multi-car sponsorship with JD Motorsports of NASCAR, Jim Dunn Racing of NHRA, and MMA competitor Randy 'The Natural' Couture.
In addition to sponsorships of Randy Couture, Cash4Gold also sponsored his charity, the Xtreme Couture G.I. Foundation which honors veterans of the U.S. Armed Forces
Cash4Gold sponsored MMA "Train the Troops" events at Camp Pendleton, Marine Corps Air Station Miramar and Marine Corps Air Station Yuma. The event brought professional MMA fighters together with Marines to help them prepare for deployment. The three "Train The Troops" events were held at three Marine bases and included 12 pro fighters and trainers, as well as hundreds of Marines. There were six four-hour-long training sessions.
Cash4Gold signed a one-year deal with UCMMA for their 2010 events, which adds to their interest in Mixed Martial Arts and sponsorship deals with Cristiane Santos ("The Cyborg"), Brandon Vera, Tim Kennedy, Gray Maynard, Leonard Garcia, and Damacio Page. UCMMA is an MMA organization based in the UK and has a history of more than 40 high profile, successful events.
Equity partner MC Hammer and Cash4Gold teamed up to donate resources to "Feed the Children" to help with relief efforts following storms in the Philippines, American Samoa, Indonesia and Georgia in the U.S. They also handed out meals to families affected by the recession in the Stockton, California area.
In December 2009, MC Hammer and Cash4Gold helped "Feed the Children" launch Breakfast2Live - "a new campaign to persuade schools to put on some early morning munchies to raise cash for developing countries and support more school breakfast clubs".
For the 2009 holiday season, Cash4Gold and MC Hammer handed out toys at the Broward County, Florida Sheriff's Office's annual "Toys for Tots and Teens" event. MC Hammer and Cash4Gold also helped Essie "Big Mama" Reed for her annual toy give-away, presenting hundreds of pre-selected children from local nursery schools with presents and taking photographs. They were partnered with the Fort Lauderdale Police Department and Fort Lauderdale Parks & Recreation.
Related businesses
The Estate Buyer
Cash4Gold launched a new division in 2009 called "The Estate Buyer" which caters to individual selling high-end jewelry from brand-name manufacturers. Unlike Cash4Gold, "The Estate Buyer" does not base its offers on the melt value of gold in an item, but upon reselling the items.
Operations for The Estate Buyer were not continued after the 2012 bankruptcy.
OroPorDinero.com
Cash4Gold.com also offers a Spanish-language website called "OroPorDinero.com" which makes its services more accessible to Spanish speakers.
United Kingdom
Founded in 2009, Green Bullion Europe Ltd. launched their Cash4Gold services in July of that year in the United Kingdom, operating from a small office / processing site in Sheffield, The volume of Refiners' Packs received in the first few weeks were very low, but then rapidly grew as the Company moved to a new administrative and processing location at Catcliffe, near Sheffield. Within the next month, they received over 4,000 packets. More importantly, the new Company was cash-positive within 12 weeks of starting to trade, a remarkable commercial achievement for a 'start-up'. This new location became the hub for both the UK operation, and the company's expansion into Europe. In 2012, the company was cited by the Advertising Standards Authority for misleading advertisements.
Various UK media organisations have undertaken trials of Cash4Gold's UK service and found their valuation greatly below the independently assessed fair market value. For instance, in November 2009, the BBC's Newsbeat programme had gold valued by an independent gold bullion dealer in Mayfair, London, at around £300. Three jewellers in Hatton Garden then offered similar amounts for the same collection; Cash4Gold's valuation cheque was for £63, raised to £100 when the researcher called to get their gold back.
Parody
Cash4Gold has attracted parodies of their business and advertisement models. The Cats4Gold website parodies Cash4Gold by encouraging visitors to post their Gold in exchange for a cat or kitten (depending on the quantity of gold sent). South Park and That Mitchell and Webb Look have also parodied Cash4Gold and similar companies.
References
External links
- Cash4Gold.com Official Homepage
- Patriot Ledger Shop Around Before Cashing in Your Gold
Source of the article : Wikipedia
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