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Money Talks, Gareth Naughton - A gold mine lying in your jewellery box
April 12th 2009
Recycling old gold jewellery is one way to raise cash if you're hard-up
Very few people have escaped Brian Lenihan's emergency budget unscathed. With increases in income levies, the withdrawal of mortgage interest relief for long-term homeowners and the prospect of taxing or means-testing child benefit next year, wallets are going to be much lighter.
Many of us will be looking for extra sources of income to help retain the high standard of living we enjoyed in the last decade. The banks are not lending any more and asking for a pay rise will probably achieve nothing more than giving the boss a good laugh, so it's time to start looking at some creative solutions to cash flow problems.
Galway company Glasson Recycling has come up with an innovative solution for people who have unwanted jewellery lying around. Through the recently launched website ForgottenGold.com, the company takes your gold jewellery and melts it down to create gold bars to be sold on the commodities market in London. Customers send their jewellery freepost using a secure envelope to the company's base where its recycled value is determined. The company will then make you an offer for the jewellery and if you are happy with that, a cheque is immediately issued. If you are unhappy with the valuation, the jewellery is returned free of charge. Glasson Recycling makes its money by purifying the gold to increase its value, so the better the quality, the higher the payout, says CEO Niall Marren.
"Most of the market value of the gold goes to that person, no matter how small, and then, obviously, the value of the gold increases with the processing… It is giving people the opportunity to release value on stuff that they don't place a lot of value in. It is jewellery that is just sitting there and we are providing people with a very convenient mechanism for releasing the value at a time when everybody needs some extra euros," he says.
The practice is already widespread in the US, and with an estimated €58m in gold jewellery imported into Ireland every year, the potential market for gold recycling is huge. The average payout has so far been around €207. However, Marren says larger sums have been paid out and this will happen more often as people come to know the service. There are security checks to ensure that the service is not abused by thieves hoping to launder stolen goods.
"If we find that we have any suspicious transactions, we will immediately notify the gardaí. There are probably easier ways to offload stolen items," he says.
The Celtic Tiger was defined by our excessive accumulation of unnecessary things, so where better to turn now that things are getting tight? If you are looking for a source of extra income, an audit of your possessions is certainly a good place to start. Perhaps you don't have gold jewellery to recycle but you may very well have something that can be sold online or via the classifieds.
First port of call for many will be online auction site Ebay. Bear in mind that you will incur fees for placing an advertisement on the site and pay a percentage – usually 10% – of your item's final value. You should also factor in whatever postage and packaging is involved when deciding a price. It's no use selling a Sky decoder for €50 to someone in the Outer Hebrides when it is going to cost you as much to get it there.
Buy and Sell remains a popular option for sellers looking for a print and online presence and private sellers can advertise free of charge. Other fee-free options include listings websites like www.gumtree.ie or www.add.ie. If you want to practise your selling skills, set up stall at your nearest car boot sale.
If you don't want to part with your possessions but are in need of some immediate cash, you could consider pawning them. A pawnbroker offers you a short-term loan secured on an item of value in return for a sum of money which is usually a small portion of its worth. You then have just over four months to repay the cash, plus 2% interest. It is possible to renew the agreement at the end of that period but if you fail to pay off the debt, the pawnbroker can then send the item to auction.
Pawnbrokers may inspire Dickensian images but these days it is mainly relatively well-off people who go to pawnbrokers because only items with real value are accepted. Famously, Vanity Fair photographer Annie Liebovitz recently pawned her entire life's work for an estimated $25m to meet inheritance taxes.
Pat Kearns of Kearns Pawnbrokers in Smithfield, Dublin, says the recession has led to a slight increase in clients. These days business is mainly confined to gold jewellery and the occasional musical instrument.
"We used to do stereos and so on but people can go to Lidl or Aldi and buy those for takeaway prices. When the battery goes, you just dump it and get a new one, they are that cheap. The items have to be of value…The vast majority of stuff is redeemed. It could be next day or within a fortnight, it depends on what the person needs the cash for; they may need it on a particular day. The rest goes to auction," he says.
Finally, for anyone tempted by advertisements that promise you can make a fortune while working from home, be extremely careful – they are usually a recipe for disaster. Recessions leave many people feeling desperate and there are plenty of fraudsters out there who are willing to exploit that.
The National Consumer Agency is increasingly worried that many people will fall victim to get-rich-quick schemes being vigorously advertised online and in newspapers. Chief executive Ann Fitzgerald recently warned people to exercise common sense when it comes to work-from-home scams.
"Scam artists are ruthless and see the recession as a way to capitalise on people in a vulnerable position. They spot the trends early, making their scams seem as authentic as possible, and in doing so exploit others recklessly," she says.
If a job seems too good to be true, it more than likely is. Research any work-from-home offer and do not get involved unless you are certain everything is above board. If a scam artist pressurises you into getting involved, just ignore them and they will probably give up. Never give out your personal or banking details to someone you do not trust and never pay money upfront in return for work.
For more tips on recognising and avoiding work-for-home scams, visit www.consumerconnect.ie.
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