Cash4Gold
Founded1 January 2007 Edit this on Wikidata
Headquarters
Pompano Beach, Florida
Websitewww.Cash4Gold.com

Cash4Gold was a company which purchased gold, silver, and platinum; primarily from jewelery which was mailed in by customers.[1] In 2012, the company declared insolvency and its assets were purchased by Direct Holdings Global.[2]

Process

Consumers requested a pre-paid envelope known as a "Refiner's Pack," which was used to ship their gold materials or precious metals to the Cash4Gold refinery in Florida. A Cash4Gold employee weighed, photographed, and assessed the items using tools such as acids, X-rays, and electronic testing devices. The company would them make the customer a financial offer for the submitted items and remit a check for their value; the customer would have 10 days from that point to accept or decline the offer.[3]

Multiple complaints were raised about the fairness of this process and the valuations of the gold mailed by customers to the company.[3]

Cash4Gold also purchased diamonds, but did not pay for additional gem stones and recommended they be removed from jewelry prior to sending it for evaluation.

Security measures

To ensure customers are the legal owners of the jewelry that is sent in, Florida passed legislation aimed at regulating the online gold-buying industry. Cash4Gold worked with Florida legislators to draft the bill. This new law also requires the company to get a driver's license number and a sworn statement from customers stating that they own the items they are selling.[4] Sellers must be at least 21 years old and the senders’ addresses are verified.

CNN visited Cash4Gold headquarters in March 2010 to see the company's methods of collecting, processing and melting gold jewelry. In the visit, steps shown included customer background checks, a separation of the jewelry, then processing the items for evaluations before sending customers their checks and melting items into gold bars.[5] In a follow-up article written in 2012, Fortune described some of the business practices that led to the company's bankruptcy that same year.[2]

Company history

Founding

Green Bullion Financial Services LLC was formed in April 2007 and traded under the principle name of Cash4Gold, eventually being located in Pompano Beach, Florida and being derived from Albar Precious Metal Refining, created by former CEO Jeff Aronson.[6][7][8]

In late 2008 venture capital firms Highland Capital Partners and General Catalyst invested $40 million into Green Bullion though both would exit their deals by late 2010.[9][10] Highland Capital Partners would later be sued by Marlboro Investment Group for fraud and various breaches related to the company. Highland principal Gaurav Tewari, who was alleged to have been a former acting chief operating officer for Cash4Gold, was also named as a defendant.[11]

Due to the rapid growth of their trading and operations during the latter part of 2008 and into the first quarter of 2009, there was a need to address some specific operating issues. Future investors were concerned that the Company would struggle to process the forecasted volume of Refiners' Packs. So a consulting company (Synergetics Installations Worldwide Inc.), based in Portsmouth, New Hampshire, was invited to analyze and then upgrade the current operating processes, with a view to meeting customer service levels and processing significantly higher volumes. The first requirement was to relocate the entire business from relatively small premises to a medium-sized and secure interim site, pending the redevelopment of an existing commercial or industrial unit in the Pompano Beach area, which then became their headquarters in the United States. Processing facilities and procedures were upgraded, as were the customer call center operations and administrative functions. Once the customer service levels and performance of these processes had stabilized within the US operation, the Company launched the Cash4Gold proposition into the United Kingdom, then into other mainland European countries.

David Knight, SVP for international marketing and expansion, joined the team in July 2009 from eBay.[12] Shawn Kernes, a former Chief Technology Officer at StubHub, was the company's COO.[13]

In 2006, Cash4Gold had sales of 40 million USD with 14 employees.[14][15] By May 2009, the company employed about 300 people with nearly 800,000 customer transactions.[16] As of 2010, the company has received more than 1,700 ounces (48 kg) of gold per day with 94% of respondents accepting its cash offer.

Controversy

Under the leadership of Jeff Aronson, the company claimed to pay between 20-80% of the melt value of the items to the seller,[16] though independent reports suggest less than 20% of the value was normal.[17][18] The norm for the gold-buying industry is for the seller to be paid more than 90% of the value of the gold.[16]

Channel 10 News in San Diego did an investigation where they sent in a ring containing over 2 grams of gold worth 17 USD in weight to three different sites. The payout from Cash4Gold was 7.91 USD.[19] Consumer Reports, using its "mystery shooter" team, sent 24 identical gold pendants and chains (purchased for 175 USD each) to Cash4Gold.com and its competitors. The determined melt value of the jewelry was calculated at around 70 USD each when gold was above 900 USD an ounce. In comparison with pawn shop and jewelry store quotes (which ranged from 25 to 50 USD), Cash4Gold.com quoted between 7.60–12.72 USD melt value for the jewelry. Similar low quotes were also given by Cash4Gold.com competitors GoldKit (around 7.81–20.59 USD) and GoldPaq (around 8.22–13.11 USD).[17]

When Rob Cockerham, a blogger, detailed drastic changes in Cash4Gold's valuation of jewelry after a complaint is made about an initial undervaluing,[20] a search engine optimization consultant offered "a few thousand dollars" for Cockerham to remove the criticism.[21] Cash4Gold CEO Jeff Aronson stated they had nothing to do with the incident, though the consultant stated "everyone (at Cash4Gold) was well aware of what was going on."[21] On Cash4Gold's blog, the company afterwards posted a "clarification statement" allegedly by the consultant contradicting that quote: "Cash4Gold was not aware of all of the tactics being using (sic) in my reputation management services."[22]

After a whistleblower posted on ComplaintsBoard.com discussing the inner workings of Cash4Gold.com,[3] The Consumerist and other blogs were hit with a defamation suit by Cash4Gold.com after running the postings.[17][3][23] In September 2009, Cash4Gold.com dropped Consumerist from their lawsuit.[24][25][26]

Insolvency and New Management

Green Bullion Financial Services, LLC (DBA Cash4Gold) filed for insolvency[27] on 7 November, 2012. Its assets were subsequently purchased by Direct Holdings Global for 440,000 USD.[2]

Advertising

Super Bowl XLIII advertisement

The Super Bowl XLIII advertisement featured Ed McMahon and MC Hammer, both of whom were well known for their financial troubles later on in their career.[28] The 30-second advertisement was created and produced by Havas Edge (formerly known as Euro RSCG Edge)[29] and directed by Super Bowl advertising veteran Bryan Buckley and his Hungry Man Productions.[30] Sources place the cost for the 30-second advertisement at 2.4–3 million USD.[1][7] Cash4Gold also played a 60-second advertisement in NBC's pre-game show, making it the first direct-response advertiser in that venue.[31]

The spot received considerable news coverage[7] and was seen by many commentators as a harbinger of the economic situation which was bottoming out in the United States at the time it aired.[32]

Commercial sponsorships

In the past Cash4Gold.com has signed sponsorships with Milwaukee Bucks,[33] a multi-car sponsorship with JD Motorsports of NASCAR,[34] Jim Dunn Racing of NHRA,[35] and MMA competitor Randy "The Natural" Couture.[36]

In addition to sponsorships of Randy Couture, Cash4Gold also sponsored his charity, the Xtreme Couture G.I. Foundation which honors veterans of the U.S. Armed Forces.[37]

Cash4Gold sponsored MMA "Train the Troops" events at Camp Pendleton, Marine Corps Air Station Miramar and Marine Corps Air Station Yuma.[38] The three "Train The Troops" events were held at three Marine bases and included 12 professional fighters and trainers, as well as hundreds of Marines. There were six four-hour-long training sessions.[39]

Cash4Gold signed a one-year deal with UCMMA for their 2010 events,[40] which adds to their interest in Mixed Martial Arts and sponsorship deals with Cristiane Santos ("The Cyborg"), Brandon Vera, Tim Kennedy, Gray Maynard, Leonard Garcia, and Damacio Page.[41] UCMMA is an MMA organization based in the United Kingdom and has a history of more than 40 high profile, successful events.[40]

Equity partner MC Hammer and Cash4Gold teamed up to donate resources to "Feed the Children" to help with relief efforts following storms in the Philippines, American Samoa, Indonesia and Georgia in the United States. They also handed out meals to families affected by the recession in the Stockton, California area.[42] In December 2009, MC Hammer and Cash4Gold helped Feed the Children launch Breakfast2Live.[43]

For the 2009 holiday season, Cash4Gold and MC Hammer handed out toys at the Broward County, Florida Sheriff's Office's annual "Toys for Tots and Teens" event.[44]

The Estate Buyer

Cash4Gold launched a new division in 2009 called "The Estate Buyer" which caters to individual selling high-end jewelry from brand-name manufacturers. Unlike Cash4Gold, "The Estate Buyer" does not base its offers on the melt value of gold in an item, but upon reselling the items.[45]

Operations for The Estate Buyer were not continued after the 2012 bankruptcy.

OroPorDinero.com

Cash4Gold.com also had a Spanish-language website called "OroPorDinero.com."[46]

United Kingdom

Founded in July 2009, Green Bullion Europe Ltd. launched their Cash4Gold services in the United Kingdom, operating from a small office in Sheffield.[47] The volume of Refiners' Packs received in the first few weeks were very low, but then rapidly grew as the Company moved to a new administrative and processing location at Catcliffe, near Sheffield. The new Company was cash-positive within 12 weeks of starting to trade. This new location became the hub for both the UK operation, and the company's expansion into Europe. In 2012, the company was cited by the Advertising Standards Authority for misleading advertisements.[48]

Various UK media organizations have undertaken trials of Cash4Gold's UK service and found their valuation greatly below the independently assessed fair market value. For instance, in November 2009, the BBC's Newsbeat program had gold valued by an independent gold bullion dealer in Mayfair, London, at around 300 GBP. Three jewelers in Hatton Garden then offered similar amounts for the same collection; Cash4Gold's valuation cheque was for 63 GBP, raised to 100 GBP when the researcher called to get their gold back.[49]

Parody

Cash4Gold has attracted parodies of their business and advertisement models. The "Cats4Gold" website parodies Cash4Gold by encouraging visitors to post their Gold in exchange for a cat or kitten (depending on the quantity of gold sent). South Park, That Mitchell and Webb Look, and The Onion have also parodied Cash4Gold and similar companies.[50] [51][52]

References

  1. 1 2 Christian Science Monitor "Got Gold? Why TV ad men want yours" Archived 2009-02-05 at the Wayback Machine February 4, 2009
  2. 1 2 3 Primack, Dan. "Pennies for Cash4Gold". CNN. Archived from the original on 31 October 2012. Retrieved 2 November 2012.
  3. 1 2 3 4 Popken, Ben (February 2, 2009). "10 Confessions Of A Cash4Gold Employee". The Consumerist. Archived from the original on December 2, 2021. Retrieved Sep 3, 2009.
  4. ↑ "Crist signs human smuggling bill". SunSentinel.com. June 11, 2009. Archived from the original on April 1, 2010. Retrieved May 3, 2010.
  5. ↑ "Cash4Gold: Behind the Scenes". CNN. March 5, 2010. Archived from the original on March 27, 2010. Retrieved April 28, 2010.
  6. ↑ Los Angeles Times blog "Beneath Cash4Gold's Shiny Veneer, A Dull Reality" Archived 2009-02-06 at the Wayback Machine February 5, 2009
  7. 1 2 3 Bloomberg "Cash4Gold to Air Super Bowl Ad With M.C. Hammer and Ed McMahon" Archived 2023-08-20 at the Wayback Machine January 30, 2009
  8. ↑ New York Times "Ads That Pushed Our Usual (Well Worn) Buttons" Archived 2016-11-28 at the Wayback Machine February 1, 2009
  9. ↑ "Who (now) owns Cash4Gold?". Fortune. Archived from the original on 2022-12-31. Retrieved 2022-12-31.
  10. ↑ Woolhouse, Megan; Healy, Beth (2010-06-28). "Venture capitalists saw precious opportunity". Boston.com. Archived from the original on 2022-12-31. Retrieved 2022-12-31.
  11. ↑ "VC firm sued over Cash4Gold investment". Fortune. Archived from the original on 2022-12-31. Retrieved 2022-12-31.
  12. ↑ "Cash4Gold Hires New Senior Vice President". JC Online. August 5, 2009. Archived from the original on August 10, 2009. Retrieved August 15, 2009.
  13. ↑ "High-level promotions and new hires in South Florida". Miami Herald. August 31, 2009.
  14. ↑ "Entrepreneur magazine's Hot 500 Company Rankings – Albar Precious Metals Company Information". Archived from the original on 2009-02-07. Retrieved 2009-02-06.
  15. ↑ Inc.com "No. 271" Albar Precious Metal Refining Archived 2009-02-06 at the Wayback Machine 2007 Fastest Growing Private Companies in America
  16. 1 2 3 Florida Trend "Cash4Gold's Rush" Archived 2009-09-05 at the Wayback Machine Retrieved on 2009-7-13
  17. 1 2 3 "The Article Cash4Gold Doesn't Want You To Read". The Consumerist. September 1, 2009. Archived from the original on September 5, 2009. Retrieved Sep 3, 2009.
  18. ↑ "Selling Your Gold? Read This First". CBS moneywatch. Archived from the original on 2009-09-04. Retrieved 2009-09-03.
  19. ↑ "I-Team Puts Gold Buyers To The Test – 10News I-Team Investigations Story – KGTV San Diego". Archived from the original on 2012-04-04. Retrieved 2009-07-07.
  20. ↑ "Cash4Gold Will Offer One-Third of the Actual Value for your Gold". Archived from the original on 2009-02-07. Retrieved 2009-02-09.
  21. 1 2 MSNBC "Blogger: Cash4Gold tried to 'bribe' me" Archived February 7, 2009, at the Wayback Machine February 6, 2009
  22. ↑ Cash4Gold blog “Response to Laratro Quote in MSNC” Archived 2009-02-12 at the Wayback Machine
  23. ↑ Yahoo! Technology "Beware Cash4Gold and other gold-buying ripoffs" Archived 2009-07-17 at the Wayback Machine Null, Christopher
  24. ↑ Seaman, David (2009-09-25). "Cash4Gold Drops Lawsuit Against Bloggers". MainStreet. TheStreet.com. Archived from the original on 2009-09-27. Retrieved 2009-09-29.
  25. ↑ Ben, Popken. "Cash4Gold Drops Consumerist From Lawsuit". Consumerist. Archived from the original on 2009-09-28. Retrieved 2009-09-29.
  26. ↑ "Notice of dropping party" (PDF). 23 September 2009. Archived from the original (PDF) on 2009-10-07. Retrieved 2009-09-29.
  27. ↑ http://www.myfloridalegal.com/EC_Edoc.nsf/0/4220D3B4CA7941B085257AB5007665BC/$file/Cash4Gold.pdf Archived 2021-07-31 at the Wayback Machine
  28. ↑ USA Today "Cash4Gold Snaps Up A Spot For the Super Bowl XLIII ad" Archived 2009-09-04 at the Wayback Machine Retrieved on 2009-7-02
  29. ↑ STUART ELLIOTT (January 29, 2009). "Upbeat but Sympathetic: A Fine Line for Super Bowl Ads". The New York Times. Archived from the original on August 26, 2021. Retrieved February 24, 2017.
  30. ↑ "Fast Monday: Cash4Gold Buys Super Bowl spot". MediaPost. Archived from the original on 2009-06-10. Retrieved 2009-07-09.
  31. ↑ Smart Brief “Super Bowl ad roster to include direct-response Cash4Gold” Retrieved on 2009-7-08
  32. ↑ "Cash4Gold, Ed McMahon and MC Hammer". Time. February 2, 2009. Archived from the original on February 5, 2009. Retrieved 2009-07-01.
  33. ↑ Palank, Jacqueline (April 30, 2009). "Athletes Can't Box Out Recession". Wall Street Journal. Archived from the original on 2009-07-13. Retrieved 2009-07-17.
  34. ↑ Sports Business Daily “Wheels & Deals: Camping World To Remain Truck Series Sponsor” Archived 2009-08-04 at the Wayback Machine Retrieved on 2009-04-08
  35. ↑ "Cash4Gold Joins Jim Dunn Racing". NHRA. July 30, 2009. Archived from the original on August 22, 2009. Retrieved August 4, 2009.
  36. ↑ "Cash4Gold to Sponsor Legendary Mixed Martial Arts Champion Randy 'The Natural' Couture in Upcoming Fights and Support Couture's Xtreme Couture G.I. Foundation". PR Newswire. August 28, 2009. Archived from the original on February 11, 2009. Retrieved September 4, 2009.
  37. ↑ Michael J. Mooney. "UFC Legend Randy Couture Gets Gold After Loss". Broward Palm Beach. Archived from the original on September 6, 2009. Retrieved November 30, 2009.
  38. ↑ Tom Amenta (November 8, 2009). ""MMA stars "Train the Troops" at military bases in recent visits across the U.S."". MMA Junkie. Archived from the original on 2009-11-12.
  39. ↑ Lex McMahon (November 2, 2009). "Train The Troops MMA inaugural event a huge success". Five Knuckles. Archived from the original on November 5, 2009. Retrieved December 4, 2009.
  40. 1 2 "Cash4Gold Sponsors UCMMA – Win a trip to Dubai". Warriors of MMA. December 11, 2009. Archived from the original on December 15, 2009. Retrieved February 20, 2010.
  41. ↑ "UCMMA strike Gold with new 2010 sponsorship deal". The Mirror. December 14, 2009. Archived from the original on September 5, 2011. Retrieved February 20, 2010.
  42. ↑ "EXCLUSIVE: MC HAMMER Strikes Gold!". Celebrity Good Life. October 15, 2009. Archived from the original on October 17, 2009. Retrieved March 8, 2010.
  43. ↑ "Rapper MC Hammer bigs up breakfast in Sheffield". The Star. December 14, 2009. Archived from the original on December 17, 2009. Retrieved February 2, 2010.
  44. ↑ "MC Hammer, Big Mama toy giveaway". CNN. December 21, 2009. Archived from the original on December 30, 2010. Retrieved March 23, 2009.
  45. ↑ Luxist.com “Sell your Luxury Jewelry To the Estate Buyer” Archived 2009-07-16 at the Wayback Machine Retrieved on 2009-7-18
  46. ↑ Infomercial Hell “Oro Por Dinero Cash4Gold.com Airs New Spanish and English Commercials” Archived 2009-06-10 at the Wayback Machine Retrieved on 2009-7-25
  47. ↑ WONG, VINCE (July 20, 2009). "Cash4Gold postal service launched in UK". Bitter Wallet. Archived from the original on September 25, 2009. Retrieved September 1, 2009.
  48. ↑ "Cash4Gold Rapped for Misleading Advert". AOL Money. 2012-08-29. Archived from the original on 2014-02-23. Retrieved 2014-02-05.
  49. ↑ "What's the 'true' value of your old gold?". BBC Newsbeat. November 2009. Archived from the original on 2009-12-13. Retrieved 2009-12-09.
  50. ↑ Kleinman, Jacob (22 March 2012). "South Park New Episode Exposes 'Cash For Gold' Conspiracy". International Business Times. Archived from the original on 10 April 2023. Retrieved 10 April 2023.
  51. ↑ "U.S. To Trade Gold Reserves For Cash Through Cash4Gold.com". The Onion. Archived from the original on 2023-04-10. Retrieved 2023-04-10.
  52. ↑ "That Mitchell And Webb Look". British Comedy Guide. Archived from the original on 10 April 2023. Retrieved 10 April 2023.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.