By Rick Dandes
The Daily Item
LEWISBURG -- During tough economic times, some Valley residents are selling whatever valuable gold jewelry items they own just to pay their bills, meet basic needs or pay for emergency needs, said a Lewisburg cash-for-gold buyer.
And with the price of gold at $1,600 an ounce, who can blame them?
Still, it's at these times that some organizations take advantage of people who are desperate to obtain cash and buy precious metals for less than 10 percent of what they are worth.
"We call these national companies hotel traveling shows," said David J. Siebert Jr., a Lewisburg-based appraiser and gold buyer with more than 50 years of experience. "They book space, come into town, advertise a lot and attract motivated sellers. People are getting ripped off, and that's not right."
Nils Hendricksen, a spokesman for the state attorney general's office, agrees. Although the state does not keep a "watch" list of "shady" organizations," he said, "Before going to one of these shows, you should certainly check with your county district attorney or county sheriff's office to see if they have registered and are legitimate. Pennsylvania law says that when a gold-dealer show comes into town, they must register by county in order to operate."
In November, a Florida-based precious metals dealer was charged with several state violations, including failing to keep proper records of transactions, at a gold and silver buyback event at a Snyder County motel. The dealer was an employee of Blackthorn Estate Buyers, of Boca Raton, Fla., and the violations included the absence of visible licenses, weights, permits, identification, sales receipts and current prices -- all required by Pennsylvania's Precious Metals Law, which is designed to protect people who are considering selling gold, silver or platinum.
The requirements also allow police to track the resale of stolen items.
Snyder County District Attorney Michael Piecuch, who investigated the case, and the police officer involved in the Blackthorn investigation -- who asked to remain anonymous -- said probes into other companies are ongoing and they could not comment at this time.
The officer did not want his name published because he often works the shows undercover, and "dealers will 'Google' your name to try and find a photo of you online." He would not say if he had a working list of operators that he watches for.
Two weeks ago, a hotel gold-buying show suddenly was canceled when local dealers brought up questions about the company's legitimacy. It is not known why the company, J.R. Roadshow, also based in south Florida, pulled out of its four-day commitment at the Comfort Suites, Lewisburg.
Attempts to locate the company on the Internet or in the phone book were unsuccessful.
Piecuch said Friday that his office also is investigating J.R. Roadshow, but said he could not comment further.
Meanwhile, he pointed out that there are strict regulations in Pennsylvania if you are a gold buyer, "and Blackthorn did not comply with several of the regulations."
Those regulations include several consumer protection laws.
What they don't say
"One thing most of these traveling gold-buyback shows don't display are the minimum buy prices a dealer will pay for the smallest amount of gold that you bring in," Siebert said. "These companies, even the big ones, don't display their minimum prices. They will throw things on a scale and tell you how much they'll pay for your gold without telling you how much it weighs. They're taking advantage of people. I'm not saying all of these companies do that, but remember, they have to pay for the hotel room, food, travel and make a profit, all at the same time."
Siebert is fed up with companies that rip off people, senior citizens in particular. "I fight hard for seniors. I don't want to see them taken advantage of by these hotel companies. And I'm not trying to squelch competition. I'll challenge any hotel show dealer on prices, and I'll always beat them."
He often goes to these big shows to test the competition. "I once brought about $30,000 in gold coins to a show to see how much they'd give me for it. And they offered me $1,500. When I tried to explain to them that these were rare coins, they stopped me from talking and said, 'Sir, we are the experts at this.' I said these coins were in mint condition, and they insisted I didn't know what I was talking about."
15% to 20% of value
It's true that the hotel shows are out to make big profits, agreed Barry Knauer, owner of Antiques at 221, Market Street, Lewisburg. "A friend of mine, who is a jeweler, tried to sell $100 in gold jewelry to one of those national buyers. They offered $32."
Knauer and Siebert both suggest buying local and getting a second opinion when you want to sell.
"I tell sellers don't take the first offer," Knauer said. "Shop it around. People will come into my store with jewelry, I make them an offer and they are shocked because compared to what they are offered at the hotel shows, it's quite higher. It's a shame people are being taken, ripped off."
Traveling shows pay roughly 15 percent to 20 percent of value, Knauer said, "And that's really low. What you find when you sell locally is we generally pay higher rates. If you come in with a little gold chain, I might pay 60 percent. But if you come in with a pile of gold, I'll pay up to 80 percent because there is more profit for me."
In a small town, dealers can't afford to take advantage of area residents. Word gets around fast, and a business wouldn't last long if it got a bad reputation.
"Look, we turn down stuff here," Siebert said. "If someone comes in our door and somehow what is offered doesn't fit them, or if you asked them where they got the piece and they can't tell you, I'll turn it down. I'll say I'm not interested."
Karen Baker, owner of Wolf's Jewelry, also on Market Street, Lewisburg, said she "stays away from buying gold. Period. We probably get at least one or two people every day coming into our store with scrap gold asking if we buy gold. With the down economy, we've heard that there are a lot of robberies. Some people come in, and they can't document where they got their gold, so you don't know what you are getting. I mean, for us, right now, gold buying is not something we want to do."
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