Gold merchants who buy jewellery through the post are to be investigated by the Office of Fair Trading (OFT) amid claims that they offer "shockingly" poor value for money.
With the gold price at a record high, a slew of television adverts has appeared in recent months encouraging recession-hit shoppers to convert necklaces and other items into cash.
In an undercover exercise, the consumer group Which? found merchants offered an average of 6 per cent of the retail price of jewellery.
Researchers bought a £115 bracelet, a £215 bangle and a £399 necklace from high-street jewellers such as H Samuel and Ernest Jones and posted them to merchants. For the three items costing £729, CashMyGold offered a total of £38.57, Postal Gold £43.90, and Cash4Gold £56.36.
A fourth operator, Money4Gold, bid £19.43 for the bracelet and bangle, but failed to quote for the £399 necklace, claiming it was "not gold". Which? could only retrieve it on payment of £10.95 for "shipping, handling and processing".
Pawnbrokers and independent jewellers offered a better deal, £138 and £182 respectively, about a quarter of the retail price.
Peter Vicary-Smith, the chief executive of Which?, said: "The poor value for money these TV gold-buyers are providing is simply shocking. The cash-for-gold market is unregulated, and this investigation has raised serious concerns about the fair treatment of consumers."
After the survey was published, the OFT said it was checking whether the terms and conditions of five unnamed companies complied with consumer law. In some cases, the watchdog feared the right to reject offers and have gold returned were not being honoured.
OFT spokeswoman Juliet Young 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." Concerned consumers may contact the OFT at oft.gov.uk/goldpost.
Gold merchants said prices paid for gold to be melted down would not match prices of new jewellery. Justin Prichard of CashMyGold said: "Retail gold can be sold at a marked-up price of up to 300 per cent."