Consuming Issues: Dodge the gold jewellery rip-off

One of James Bond's most memorable foes was the gold smuggler Goldfinger. As well as his garish habit of painting women in gold, he wanted to detonate a nuclear bomb at the US gold reserve to increase the value of his insufficiently precious bullion. Thankfully, the fictional force of the British state defeated him, but 007's real-life counterparts at the Financial Services Authority were less effective in thwarting other would-be masters of the universe, bankers. The banking-inspired recession and consequent stock market crash have done for the price of gold what Auric Goldfinger intended at Fort Knox.

At the turn of the century, when talk of a new economic paradigm propelled the dotcom boom to absurd heights, out-of-fashion gold sank to £160 an ounce. Now it is a feisty £675.

As a consequence, a new gold rush is under way, characterised not by pioneers wielding pick axes but by colourful entrepreneurs running adverts offering "cash" to members of the public for unwanted jewellery.

People have long wondered whether these firms represent good value. An inspired experiment by the ever dependable Which? suggests (stifle your credulity) that they are not.

Uncommonly flash Which? researchers splashed cash on bling, nine-carat gold bracelets, bangles and necklaces from high street jewellers, then sent them off, undercover so to speak, to postal services such as and

For a bracelet costing £115 on the high street, the merchants offered anything from £6 to £39. For the £399 necklace, they graciously upped their bids to between £22 and £119.

Amusingly, after failing to make contact, Money4Gold claimed the £399 bracelet was "not gold" and could only be returned with a "shipping, handling and processing fee" of £10.95. CashMyGold offered £6.43 for the £115 bracelet; £9.64 for the £215 bangle; and £22.50 for the £399 necklace. Postal Gold and Cash4Gold (be forewarned) made similarly low offers.

Jewellery bound for the smelter will never match its shop price, but the postal gold merchants offered an average of just 6 per cent. CashMyGold explained it advertised for old or broken jewellery, saying: "Gold retail prices and the prices obtained for smelted gold are not comparable. Retail gold can be sold at a marked up price of up to 300 per cent."

Which? found better but still not great value elsewhere: pawnbrokers and independent jewellers offered £80 and £102 for the £399 necklace.

After publication of the survey this week, the Office of Fair Trading – an occasional Hercule Poirot but, in this case, an Inspector Clouseau – announced it would look into postal gold firms. Juliet Young, a director in the OFT's consumer market group, said: "Buying gold using the postal service is a relatively new business model, and while innovation often brings benefits for consumers, we want to check that the market and businesses are developing in a way that treats customers fairly."

If only the OFT could mount a belated inquiry into the greatest gold heist of them all, carried out by Gordon Brown when Chancellor of the Exchequer. Between 1999 and 2002, he sold off half the UK's reserves, 395million tonnes of bullion, with the price at a 20-year low. At today's prices, taxpayers would make an extra £5bn: £96 for every adult in Britain.

Heroes & Villains

Hero: Peter Mandelson

In my column of 8 August, I vilified the Business Secretary for failing to welcome the Competition Commission's recommendation for a supermarket ombudsman to aid grocery suppliers. "Why do the words 'kicked into' and 'long grass' come to mind?" I wrote about his non-committal response. Earlier this month – five months later – the Department of Business announced it did want an ombudsman, but wasn't sure who should fill the post or what its powers would be, and announced a three-month consultation beginning on 4 February. Baron Mandelson, aka President of the Board of Trade, is due to make a decision in the, er, summer. I would like to apologise to him for any suggestion he was dragging his feet on the issue.

Villain: British Gas

January and still no sign of a cut in energy prices. Could it be suppliers are waiting until peak demand is over before reducing prices in the not-so-chilly spring? As Britain's biggest energy supplier, British Gas says it bought gas on long-term contracts more than a year ago and so cannot cut bills yet. Any of the Big Six could be in this slot this week. But, as British Gas will no doubt be telling customers facing disconnection, it's a hard world.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
A 'Sir Alex Feguson' tattoo

Arts and Entertainment
Liam Neeson said he wouldn't

Liam Neeson's Downton dreams

voicesApple continually kill off smaller app developers, and that's no good for anyone
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear

Thriller is set in the secret world of British espionage

Life and Style

ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
travelWhy Japan's love hotels are thriving through an economic downturn
Life and Style

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Joel jumps over the board...and into a giant hole
footballFrom joy to despair in a matter of seconds
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me

Actress to appear in second series of the hugely popular crime drama

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Audit Manager Central Functions

    To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

    Credit Risk Audit Manager

    Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week