Beware of The Gold Necklace Switch Scam

Last fall, we wrote an article about how Fake Gold Bead Necklaces Were Fooling Shop Owners. A pawn shop owner described how a customer came into the store with two sets of “gold” bead necklaces she wanted to sell.  The beads looked real, but of course the owner wanted to verify the gold first.  He used rare-earth magnets and the acid test, and the beads passed.  But the owner later discovered – after he bought the beads for almost $2,000 cash – that some of the beads were solid gold and some were just plated.  The counterfeiter took the chance that the pawn shop would not go to the trouble of using the harsh chemicals on every single bead in the strand, and in this case, the counterfeiter won. (By the way, here are 8 reasons that you should not use the acid test when testing gold.)

Now there is another potential problem with counterfeit gold necklaces, of which jewelers and pawn shop owners should be aware.  The “switcheroo.”  We’ve recently learned that one pawn shop owner had someone come into the shop and inquire about the value of his gold necklace.  The owner tested the real gold necklace, gave the customer a quote, then returned the necklace back, into the person’s right hand.  The customer chatted with the owner, shaking the thick gold necklace in his right hand while deciding what to do.  He then switched his phone from his left hand to his right.  He started shaking his left hand and told the owner he would take the deal, giving back the necklace with his left hand.  The owner didn’t realize the thief switched hands, nor that a fake gold necklace had been concealed in his left hand, so he bought the necklace. The cell phone placement and the shaking of the necklace were distractions and a way to hide the necklaces in each hand.

So, the thief received cash for the value of the real chain, and got to keep the real chain, but the owner got the worthless fake chain. It was only later that the switcheroo was discovered on the shop’s video. It was a scam and the owner was out a substantial amount of money.

Cash-for-gold operators need to be aware of this type of scam, and it has been advised by the tricked owner that gold and jewelry be retested every time the customer has had contact with the item.  That can get quite messy, of course, with the acid test.  However, if one utilizes x-ray fluorescence, testing can be done easily with no mess or multiplying the amount of harsh chemicals that need to be used every time a piece is valued. With an XRF precious metals analyzer that utilizes gold-plating technology, you can be absolutely sure of the value of the precious metals you buy and sell.  You can quickly identify counterfeit gold, distinguish between gold plating and solid gold and determine the accurate karat (K). The test can be done right on your countertop in front of the customer – before and after they hold the item.

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