smart spending

Bring your bling to a gold party

"Our Golden Girls buyer was very professional," she says. "I would recommend them to anybody."

But not everyone is delighted with the gold party fad. Jeweler Gary Dillon of Westland, Mich., has been waging war against them for more than a year.

"Technically, they're illegal," he says. "If you read the U.S. precious metals laws, they state that if you buy something it has to stay on premises for nine days, and on the 10th day it's yours. How can you have a gold party at a hotel or somebody's house and then take the merchandise off the property?"

By law, jewelry stores and pawnshops must document and hold merchandise they sell in the event it was stolen. If they fail to do so, they could be fined as much as $10,000 and even jailed, Dillon says.

Can you imagine a gold party where you're required to present an ID or be fingerprinted? What a buzz kill!

Dillon says there is a word for what's they're doing, and it's not party. "It's called fencing," he says.

"They blow into town, they milk the gold out and they leave," Dillon says. "A place like ours, we've been here for years and we need (to buy gold) to survive right now. If you sell to a gold party, all you're doing is hurting your own community."

Perhaps to offset such accusations, many gold party companies also offer special fundraiser services in which a portion of their proceeds goes to the charity of choice of the hostess or group.

"Because of the economy, everybody is a little shy with fundraisers right now," says Zvacek. "With our fundraisers, nobody gives money. They bring their jewelry, we give them money, and at the end of the event, we give 15 percent of what we bought back to the fundraiser. It's very, very beneficial."

The gold parties also provide something else in demand these days: jobs. Gold Buyers alone has hired 250 people.

"We've struck gold, but we don't let it go to our heads," Zvacek says. "We're trying to give back. If we can create 50,000 jobs back into the economy, I'm extremely happy."

Invited to a gold party?

Here's how to make sure you get the most from your unwanted bling:
  • Check online at www.goldprice.org or call a local jeweler to verify the current price of gold before you sell.
  • Have your jewelry appraised by a licensed jeweler first. Their appraisal, which takes into account workmanship, artistic value and embedded gems, may help you decide if you want to sell the piece for its scrap value at a gold party.
  • Know your karats. A jeweler can also tell you the karats of your jewelry. One karat equals 1/24th of pure gold by weight. Gold jewelry typically runs between 14 karats and 24 karats, or solid gold. Anything less than 10 karats cannot legally be labeled gold jewelry.
  • Know your measurements. Gold party buyers offer scrap value based solely on the weight of your gold, measured in Troy ounces. Some buyers use grams and some use pennyweights to measure a Troy ounce. Be sure the buyer does not weigh your gold by pennyweight and pay you in grams.
  • Check out the buyer. Are there any complaints against the buyer with the Better Business Bureau? Is the buyer licensed to buy gold in your city and state? Is the party you'll be attending registered with local authorities if required by law? Does the buyer maintain the transaction records required under precious metals laws?
  • Don't let jewelry of different karat values be weighed together. Some dealers will attempt to do so and base their offer on the lowest karat value. To avoid this, separate your jewelry by karat value before the party.
Source: Better Business Bureau, Eastern Michigan

Jay MacDonald is a contributing editor based in Texas.

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