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Spring

The Gold Party Scams How They Do It…

THE GOLD PARTY SCAMS HOW THEY DO IT 4-29-2008

THE PURPOSE OF THIS LETTER IS TO EXPLAIN WITH NUMBERS HOW YOU CAN BE CHEATED AT THESE
GOLD PARTIES WHICH ARE GOING ON AT HOMES, RELIGIOUS PLACES, SCHOOLS.

FIRST LET’S AGREE ON ONE SIMPLE THING “ NO BODY DOES BUSINESS TO LOSE”.

I WILL START WITH SIMPLE NUMERICAL VALUES.

1- ONE TROY OUNCE = 31.103 GRAMS
2- 1 DWT = 1.5551 GRAMS ( THIS IS KNOWN ALSO AS PENNY WEIGHT )
3- PURE GOLD IS 24 KARAT OR 999.9 PURITY.
4- 21 KARAT GOLD IS 0.875 PURE OR 21/24= 0.875
5- 18 KARAT GOLD IS 0.750 PURE OR 18/24= 0.750
6- 14 KARAT GOLD IS 0.585 PURE OR 14/24= 0.585
7- 10 KARAT GOLD IS 0.417 PURE OR 10/24= 0.417

THE DAILY PRICE OF GOLD WE SEE ON THE NEWS EVERY DAY IS FOR ONE TROY OUNCE . IF YOU DIVIDE THAT PRICE BY 31.103 GRAMS YOU WILL FIND THE PRICE BY ONE GRAM OF 24 KT GOLD.

FOR EXAMPLE :TODAY’S PRICE $880 PER OUNCE DIVIDE BY 31.103, THIS GIVES 880/31.103=$28.29 A GRAM
FOR 21KT , THE PRICE IS $28.29X 0.875=$24.75 A GRAM.
FOR 18KT , THE PRICE IS $28.29X0.750 =$21.21 A GRAM
FOR 14KT , THE PRICE IS $28.29X.585 =$16.54 A GRAM
FOR 10KT , THE PRICE IS $28.29X.417 =$11.79 A GRAM

SOME OF THE GOLD COMES WITH CUBIC ZIRCON OR OTHER SYNTHETIC STONES, AND SOME ARE NOT
EXACTLY ACCURATE IN KARAT. AFTER MELTING WHAT WE BUY WE NORMALLY LOSE FEW GRAMS ,
AND 0.5 POINT IN KARAT WEIGHT.

WHEN WE SELL THE SCRAP GOLD , WE GET 93% OF THE DAILY PRICE OF GOLD AT THE TIME OF SALE,
SIMPLY BECAUSE THE REFINERY WANTS TO MAKE SOME PERCENTAGE .

NOW, WE WILL SHOW IN NUMBERS HOW PEOPLE GET CHEATED !!

IF WE TAKE ONE GRAM OF 21KT AND SELL IT AT TODAY’S PRICE…
$24.75 X93/100=$23.01 PER GRAM

TODAY WE PAY OUR CUSTOMERS $19.50 PER GRAM.

THE PROFIT PER GRAM IS : $23.01- $19.5=$3.51. WE HAVE TO PAY TAXES AT THE END OF THE YEAR ON ALL OF OUR PROFITS.

THE PROFIT PERCENTAGE PER GRAM=3.51/23.01=0.152 OR 15.2%

HERE IS THE SCAM………… IF THOSE PEOPLE SPONSORING THE PARTIES AND PAY WITH CASH, PAY
10% COMMISSION TO THE HOST AND 5% TO THE PERSON REFERRING THE HOST TO THESE PEOPLE, AND TO PAY THEIR EMPLOYEES WHOM ARE DOING THE ACTUAL BUYING THE NUMBERS WILL SHOW
A DEFINITE LOSS EVERY TIME EVERY PARTY, THIS IS IMPOSSIBLE………

IN ORDER TO MAKE A PROFIT THESE PEOPLE MUST CHEAT ON THE WEIGHT, THEY BUY YOUR GOLD BY DWT OR PENNY WEIGHT WHICH IS EQUAL TO 1.555 GRAMS, THEY PAY YOU FOR 1 GRAM (ONE GRAM),
THIS MEANS THEY CHEATED YOU OUT OF ALMOST 1/3 OF YOUR MONEY.

THE SECOND WAY IS TO CHEAT ON THE KARAT, BY TELLING YOU THAT YOUR GOLD IS LESS KARAT THEN IT ACTUALLY IS, SOME OF THE PEOPLE WHOM ALREADY WENT TO THESE PARTIES WILL HAVE TOLD US THAT THIS HAS BEEN DONE TO THEM INCLUDING MY OWN DAUGHTER.

THE THIRD WAY IS TO PUT ALL THE DIFFERENT KARATS TOGETHER ON THE SCALE AND PAY YOU FOR
LOWER KARAT PRICE.

THE FOURTH WAY IS TO OFFER YOU AN AMOUNT OF CASH FOR YOUR GOLD LOWER THEN ACTUAL VALUE AND SEE IF YOU WILL ACCEPT IT.

THE FIFTH WAY IS TO CONVINCE YOU THAT THE KARAT STAMPED ON YOU GOLD IS NOT CORRECT,
BECAUSE OTHER COUNTRIES MAY HAVE A STAMP ON THE YOUR GOLD THAT YOU DO NOT UNDERSTAND, HE CAN THEN TELL YOU THAT YOUR GOLD IS NOT THE KARAT YOU THOUGHT IT WAS.

ONE OF THESE GOLD COLLECTORS WHO IS CALLING HIMSELF
( REFINER) DOES NOT HAVE EVEN AN ACTUAL ADDRESS FOR HIS REFINERY,AND DOES NOT REFINE ANYTHING, HE SELLS $500,000.00/WEEK TO THE SAME REFINERY WHERE WE SELL OUR GOLD, WE RECEIVE 93% FOR OUR SCRAP, HE RECEIVES
92% FOR HIS GOLD BECAUSE HE WANTS CASH FOR HIS GOLD.

FINALLY, WE LIVE IN THE COMMUNITY THAT WE ARE DOING BUSINESS IN JEWELERS, WE ARE LIKE LOTS OF HONEST JEWELERS IN YOUR COMMUNITY,WE SUPPORT LOCAL SCHOOLS, LOCAL RELIGIOUS AND NON PROFIT ORGANIZATIONS, WE ARE HERE TO STAY, NOT TO CHEAT, AND RUN WE PAY OUR TAXES LIKE ALL OF YOU DO.

MY ADVISE TO ALL CUSTOMERS, BEFORE YOU SELL YOUR GOLD AT THESE PARTIES, WEIGH YOU GOLD AT YOU JEWELER, DIVIDE YOUR GOLD INTO BAGS ACCORDING TO KARAT WEIGHT, AND ASK FOR THEIR PRICES , THEN COMPARE BETWEEN THE TWO.

Read What Happened When We Sent Someone To One Of These Gold Party’s

Undercover At A Gold Party

On Monday a gold party was held at one of the house’s of worship in the area, we sent in someone with some gold to see how it works this is what happened.

174 grams of 18kt gold was sent, we also sent 21kt, but after what happened with the 18kt she found out all she needed to know so she did not bother showing him the 21kt gold. She was told that they weighed 111 grams a difference of 63 grams just to start, and 9.3 grams of that was 14kt how did he know that well he did a little light show for her passing it under some ultraviolet light complete non-sense.

He offered her $250.00 for 111 grams, she told him “are you crazy?”, he then said” sorry I made a mistake”, he recalculated, and then offered her $1,550.00. Now the interesting part is this we had bought those items in our store just one hour before, all items were stamped 18kt or 750, checked by an acid test to see the gold karat, there was no 14kt items with them we bought these for $3,150.00 on Monday we were buying 18kt gold for $18.00 a gram. The first offer was for $2.53 a gram after doing his recalculation he then offered her $13.00 a gram for 18kt gold, and if you calculate it by penny weight or DWT the price drops to $8.90.

The scale is under the table so the customer can not see it you do not know if you are selling by gram weight or penny weight, now we can all under stand how they can offer 10% to the host of the party, and another 5% to the person who’s name was used as a referral, when you are working with a very small percentage to begin with that is if you are a jeweler who is honest, you can not pay 10%, and another 5% we are not even making the 10% so they have to make it up some were, and that is by cheating simple, and easy you do not have to think twice just look at the numbers. He did write these offers down on his card, and on his flier.

So what should you do? Well if you are going to go to one of these gold party’s go to one or more honest, and reliable jewelry store in your area if you can then have your items sorted by gold karat have them weighed, and you should write how much they weigh, and what the offer is. Do not accept being told they are worth this much ask how much thy are taking them for by gram weight. In our store we post the price as of Saturday the gold price per gram was

22kt $21.00 a gram

21kt gold at $20.00 a gram

18kt gold at $16.00 a gram

14kt gold at $11.00 a gram

10kt at $7.00 a gram

After you get your prices you should get more or at least equal to what ever was offered to you. If your gold has been sorted by karat, and they try to tell you that several items are 14kt in the 18kt or 10kt in the 14kt, and you have all ready had it sorted in another jewelry store walk away. If they tell you your items weigh less then what you have written down, walk away you do not need to waste your time you already know that they are cheating you.

When you do not take their offer this was the interesting part the person we sent was told take the offer 10% is going to the house of worship don’t you want to support your house of worship, we found out after several calls that the they were not getting on penny out of all of it that the women that was hosting the party there was getting it all. That is what they told us anyway.

So they steal you with the gram weight telling you that your items weigh less 1 penny weight is worth 1.54 grams, so if they are buying by penning weight they are stealing one third of your gold, some places do tell you that they are buying by penny weight, but so far the majority do not. They cheat you by telling you that your gold is less gold karat then it is, and they cheat you again by giving you less then what your gold is worth.

On the same day as this gold party one women came into the store who had also been there, and showed us her 21kt gold, saying that she was told that several of the items were not 2lkt, but they were 18kt, she knew that these people were lying so she walked away, and came to us, She was right none of her items were 18kt gold they all tested positive for 21kt.

Yesterday in the store…

Gold parties  again the conversation in our store yesterday, we did not sit with the flood of women selling their gold. They are not happy with the price  that they are getting at the gold party’s, many of them standing around, and talking amongst themselves said that they had all taken their gold to the gold party’s in the area,  they are  non to happy with what they are finding out. One women said how do you think he pays 10%  to the host, and from who’s money for sure not out of his pocket. Another women asked us about the difference between penny weight, and gram weight, yet another women said that she had weighed one bangle with us, and that same evening took it to a gold party surprise, surprise the weight was different.  It was fun listening  to all of their stories, one of the lady’s said “why are you all wasting your time at these party’s when this store was giving $20.00 a gram for 21kt gold that guy was only giving $18.00 a gr for 21kt, and that is if he is buying by gram weight not penny weight. Someone else made a good point when she said that it was not private, and everyone knows what you are selling, and  how much money you are walking away with, she made the point that she did not want everyone knowing. When you come to this store she said you can go inside his office, and take care of every thing in private. Several women did point out that the party’s that they had gone to had a separate room so not every one could see, or hear what was going on, but that before you went into the room everyone was all together.

For sure they are all sick, and tired of the exaggerated stories that are flying around, women claiming to be making huge amounts of money from their party, other women calling, and giving over the top buying prices per gram, one women said that she was getting so many calls a day that she turned her phone off that is sad. Just to let you all know that some of these guys are offering 5% to the host if anyone books a gold party at her gold party, or if they use their name as a referral, now they could be paying as much as 15%  all from what should be your profit.

When I hear some more I will let all of you know for now be safe, and do your home work before you go, and sell. Like someone said just today I went, and looked at every place before I came back and sold to you that is my right, and the smart thing to do. We could not agree more Mariam, as I told her those are your items, and you should get the most you can for them.

As always N.J. Diamonds