Be Aware of Buying Gold at Pawn Shops
When you go to a pawn shop, you don't always know the quality you're going to receive on the products you find. Very rarely are quality-assurance checks placed on products that are brought in, and that includes Precious Metals like Gold. It is popular to buy Gold at pawn shops, but as a shopper you must use discernment to determine the authenticity and quality of the Gold piece.
Pawn shops play an interesting role in terms of retail. Sometimes people need to pull out a fast loan on an item in a cash emergency, and others go to find expensive items at low prices. In regards to Gold, it is one of the biggest money makers at pawn shops and it is important to find out whether the rock bottom prices, and the product, are legitimate. Quality Precious Metals like American Eagles or Gold Buffalos are hard to come by in pawn shops but they can exist.
Five Reasons You Should Be Aware of When Buying Gold at Pawn Shops:
Gold is the most counterfeited Precious Metal on the market today. Some pawn shop owners count on the average buyer not knowing how to spot fake Precious Metals such as Gold or Silver. Fake Gold is a common occurrence at pawn shops, but that is not to say all pawn shops take part. Some pawn shop owners and employees can spot real Gold coins and real Gold bars, in turn selling them at a reasonable cost. It is important nevertheless to be wary of fake Gold at a pawn shop.
Another problem outside of fake Gold is low quality Gold. Many factors contribute to lowering the value of Gold such as abnormal wear, excessive scratches and dents, and fading of the finish, to name a few. There are tricks to fabricate the look of Gold to its once-pristine condition. Giving the Gold a luster using cotton swabs and some polish is enough to mask the look to an untrained eye.
Cost inflation is common when buying Gold at a pawn shop. Whether or not a pawn shop owner understands the price point of Gold, the price is often higher than if you buy from an authorized retailer. The goal of any pawn shop is to make a profit and that sometimes means largely inflating the price on Precious Metals.
The origin of the Gold could be put into question. Often, the question of where the Gold originally came from cannot be answered. This puts into question the moral and ethical standards of the seller, not the pawn shop. The Gold could be stolen. Knowing where the Gold came from is every bit as important not just from a price standpoint, but from a legal standpoint. Pawn shop owners in general have a difficult time in tracking the authenticity of a seller's story and how they came across the Precious Metal.
The pawn shop could be misrepresenting a product. It is unlikely a pawn shop will have a rare Gold coin like a Pre-33 Saint-Gaudens Gold Double Eagle, but even if they did, they will try to up-sell the product to develop more interest as a way to drive up the cost. This is a tactic when it comes to more common Gold products.
While not all pawn shops sell you Gold or Silver that is low in quality, or inflate the cost of Gold and Silver, there are certainly pawn shops that do. Real Gold coins and real Gold bars do exist at pawn shops at high quality, but it is important to know what to look for in regards to authenticity, price points and value, and the product itself. The safest way to buy Gold is to buy Gold from a trusted buyer and retailer.
Buy Real Gold Coins and Real Gold Bars from a Trusted Retailer
At APMEX, all Precious Metals items are inspected for quality. The detailed assurance check ensures the buyer is getting the highest quality product at competitive prices. Our in-house experts know what to look for when it comes to fake Gold and Silver items. If we test an item and find it to be fake, or falsely advertised regarding weight or purity, we will not sell it. These steps help APMEX remain a highly trusted source in Precious Metals.
See how Gold, an ancient storehouse of wealth, plays a vital role in modern investment portfolios. Watch Video
Written to acquaint you with Precious Metals investing and all the ways APMEX helps you succeed. Read more