With the New Year fast approaching you may be looking for quick ways to make some extra cash. One way that has become popular in the past is by hosting gold parties. Gold parties have been around since about 2008. Just like the old school Tupperware parties of the past, friends and acquaintances gather to share food, drinks and chit chat, in addition to selling their gold valuables. Everyone is supposed to walk away with a profit, but unfortunately this isn’t always the case. Most guests at gold parties are being lowballed, and they don’t even realize it! Companies who host gold parties offer horribly low prices to their unsuspecting guests and leave with an enormous profit. While these parties are advertised as “fun,” the only ones who are really having a good time are the hosts and the buyer. If you’re thinking about attending a gold party, beware of the different ways you can potentially be ripped off.

Lowballing is the name of the game:

What’s the main factor that attracts people to attend gold parties? Money. The thought of receiving cash on the spot for gold valuables is what lures most people to these kinds of events. But this also opens up the perfect opportunity for a gold buyer to scam you out of your valuables. They realize the idea of immediate cash is at the forefront of your mind so you’re most likely not thinking about the kind of deal you’re getting, especially after everyone has had a few drinks. Don’t get your hopes up for making a lot of money- you’ll typically only receive about 50% or less of what your gold is actually worth.

Lack of knowledge means more money for the buyer:

Most gold sold at gold parties are old family heirlooms or scrap gold collected over the years. When this is the case you typically don’t know the karat of your gold. But this creates quite a big problem when selling your gold valuables. If you don’t know the karat of your gold you can easily be offered a deal that is nowhere near the actual price of your items. One trick gold buyers attempt is to group together gold pieces of different karat and offer you a price based on the lowest karat. If you’re selling 24-karat gold and are offered a price for 10-karat gold, you will be walking away with a huge loss.

Hosting equals more money:

While you may leave a gold party with cash in hand, the host has definitely made more than you. As a guest, you’re most likely giving up your gold for far less than what it’s worth. Meanwhile, the host is making a pretty penny off of everyone who sells their gold. The host makes a commission for convincing guests to sell, which typically amounts to 10% of the total gold purchased. Pay attention to whether or not they’re selling gold too- if not, they may just be in it for the money they make off you.

Heartstrings are pulled:

Oftentimes, gold parties are held as charity events. While this may sound like a fantastic idea, it may not be all that it seems. Some of the money from the gold party may absolutely be going towards a charity, and most organizers have the best of intentions. But if the gold is underpaid for, the charity won’t be receiving the amount of money it should be. And what’s to stop the buyer from pocketing some of that money for his or her self? Just beware of the fact that some buyers may be taking advantage of your good intentions as a way to make you knowingly accept below-market values for your gold. Better to sell your gold for top dollar and then make a donation to the charity yourself! The charity gets 100% of your donation and you get the tax write-off.

Make sure you get the most from your unwanted gold

Before attending a gold party it is always best to do your research. Is the company a reputable gold buyer? Is the host someone you really trust? It is just too easy to be ripped off at gold parties, so you want to be sure you’re comfortable selling to whoever is buying. Check out the buyer first to make sure they’re licensed. Read reviews from their past customers to get a feel for the way they handle business. It’s also important for you to at least have an idea of how much your gold is worth before attending the party. Knowing the karat of your gold beforehand is a great way to assure you won’t be convinced otherwise.

A safer alternative to gold parties

The best way to sell your gold, especially if you don’t want to take the risk of being lowballed at a gold party, is to sell to a reputable buyer, like Leo Hamel Jewelry & Gold Buyers. We buy gold jewelry of any karat, including rings, bracelets, earrings, chains, pendants, pins, watches, even broken or damaged pieces and single earrings. Additionally, we also buy gold coins, bullion, gold scraps, fillings, and industrial scrap. We examine your gold items right in front of you so you can trust you’re receiving a fair deal. Our buying offices are safe, secure, and private, with professional gemologists on hand to assist you. Stop by one of our San Diego buying offices to see just how much you can really get for your gold. No appointment is necessary!