The 1980s called; they want your gold chains back.
Thanks to the growing popularity of gold parties, it’s easier than ever to cull those disco casualties from your jewelry box, sell them for cash and party like it’s 1989.
Modeled after the Tupperware parties of old, gold parties started to crop up in living rooms in early 2008 when gold prices spiked at more than $1,000 an ounce. Suddenly, scrap gold buyers were thick as Mr. T’s man-chains, testing and buying the precious metal at home parties and hotel suites.
Once the recession hit, a gold buyer became the must-have party accessory to primarily all-female gatherings around the country and across the economic spectrum.
One year ago, Matthew Zvacek, a former fitness club manager, started Gold Buyers of America of Delray Beach, Fla., as a two-man operation with his jeweler partner Steven Livshin after the two hosted a couple informal parties for family and friends in South Florida.
Today, Gold Buyers of America is a $24 million company with 250 buyers that averages 100 parties a week nationwide. They melt down the scrap gold they buy, including the booty from other gold party companies, and resell it on the New York Mercantile Exchange and to jewelry manufacturers.
“We started out buying maybe 50 ounces of gold a week,” Zvacek says. “Today, we buy about 500 ounces to 600 ounces a week, roughly the equivalent of 5,000 wedding bands.”
Sell your gold in a friend’s living room
Theirs is one of a growing number of gold party companies, including Red Swan, Golden Girls, the Gold Refinery, MyGoldParty and the Gold Exchange.
It’s not hard to appreciate the sparkle of gold parties. Where would you rather sell your unwanted necklaces, earrings, watches and bracelets — in a caged-in pawnshop on the wrong side of town or in your best friend’s living room sharing a glass of Chardonnay with friends?
But authorities suggest you do your homework on the gold party company before liquidating your unwanted gold, as there are plenty of scam artists riding the gilded coattails of this fashion trend.
Here’s how gold parties typically work: A group of women will organize a party with a gold buyer from one of the many gold party companies. During the party, those with jewelry to sell meet individually with the buyer, who appraises the value of their unwanted jewelry and makes them an offer for it. Gemstones and nongold attachments are usually removed by the buyer and returned to the customer.
After the party, the hostess receives a commission, typically 10 percent to 12 percent of what the buyer purchased that evening.
“Basically, we pay for happy hour at your house,” says Zvacek.
Because the host and gold buyer take a cut, partygoers never receive 100 percent of the salvage value of their gold.
“We give 70 percent, and sometimes 80 percent, of what is considered scrap value,” Zvacek says.
And forget “Antiques Roadshow.” If you have sentimental attachment to your bling, this is not the place to sell it.
“We don’t buy for resale value; all we want is the gold content,” Zvacek says. “People don’t understand that the retail mark-up in jewelry is 300 percent. We don’t pressure anybody. If they don’t want to sell, we totally understand.”
To avoid being conned or shortchanged by shady dealers, check out the safe gold-selling tips from the Better Business Bureau.
Magee Jaski, a stay-at-home mom in Cary, N.C., struck gold at her first gold party, arranged through the Golden Girls, a Fort Myers, Fla.-based company.
“A mom at my preschool had sent home a gold party flier with everybody. The party was in the morning when all of our kids were in preschool together,” she says.
Jaski brought with her a handful of rings, earrings and broken chains. Was she surprised at what she was offered?
“I was way surprised,” she says. “I made $520 at that party for about a half-full snack baggy of stuff. I would have been thrilled to get $100.”
Impressed, Jaski and a friend hosted their own gold parties — Jaski’s in the morning for stay-at-home moms, her friend’s in the evening for their friends who work. Jaski earned $150 for her trouble.
“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?
- 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.
Jay MacDonald is a contributing editor based in Texas.