This is one of the busiest times of the year for jewelers, pawn shops, and gold buyers and sellers. An article on the Nasdaq website, reports that for most retailers, the 2018 holiday shopping season will present their biggest opportunity of the year to engage with customers. It will also represent the bulk of their annual sales, with brick-and-mortar sales predicted to grow 1.4 percent.
That means stores will be crowded. And when stores are crowded, workers get distracted, which could result in some of your profit running out the door. Here are some articles we’ve written in the past that might help small business owners be more aware of scams.
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.
A pawn shop owner described how a customer came into the store with two sets of “gold” bead necklaces she wanted to sell. The customer told the owner that they were a gift from her grandmother for her brother’s wedding. Both she and her sister were given the necklaces to wear at the wedding, so she no longer needed them.The beads looked real, but of course the owner wanted to verify the gold first. Acid and magnets fooled the owner. An XRF analyzer would have been a better choice to verify the metal.
If someone comes into your cash-for-gold shop looking to sell black gold, be aware. There’s no such thing. There is plenty of jewelry on the market that looks like it is made from black gold, and plenty of sellers on the internet advertising their black gold pieces, but black gold is not a natural metal. There is gold that has been blackened by various methods, however.
One pawnbroker warned that he “got burned” on two fake silver coins, which amounted to a loss of $4,000. A skilled and experienced pawnbroker, he was still fooled because “All looked good, they had sealed Professional Coin Grading Services (PCGS) holders as well as holograms, they weighed properly, and their numbers matched the PCGS website. Even scanning the bar code gave the correct number.” Since PCGS is reputable in third-party certification, he sent the first coin to them for regrading after it defaulted. After analyzing the coin, the pawnbroker was informed that not only was the coin a counterfeit, but the holder was fake as well. He took the second coin to a refiner who used an X-ray fluorescence (XRF) analyzer on it while it was still in the holder. What did the refiner find? Lead and nickel, but NO SILVER.
Is it White Gold or Platinum? Can your workers tell the difference? Gold and platinum are both dense, malleable, ductile precious metals used in jewelry. Platinum is more dense than gold, and by law jewelry that is labeled “platinum” must be at least 95% pure platinum, so a platinum ring will weigh, and therefore cost, more that a gold ring of the same size. (14k gold is only 58.5% gold and 18k gold is 75% gold). Platinum is stronger and more durable than gold. However, a distinct advantage of platinum is that it’s hypoallergenic, whereas some people will have an allergic reaction to white gold due to the nickel alloy it contains. Palladium, one of the Platinum Group Metals, may be an even better choice than platinum because it has similar characteristics as platinum at a lesser price.
Several California pawn shops reported that customers were bringing in Krugerrands that were of decent quality, several being in plastic holders, but which were suspect. If these shop owners weren’t diligent in their testing they could have lost thousands of dollars. One shop owner was suspicious because the coloring wasn’t quite right; another said that the measurements were correct, but the details were not. One shop owner reported that the customer backed off the sale when the owner wanted to open the plastic case to analyze it more thoroughly. One person brought in several Krugerrands, some of which were real while others were not. If the pawnbroker didn’t analyze each of them, he could have lost half the money he would have paid for them. Learn about other tests that are more reliable than one’s hearing and eyesight.
Editor’s Note: Take a look at our INFOGRAPHIC: 8 Reasons Jewelers Should NOT Use Acid to Test Jewelry