Communities Considering Bans On 'Cash For Gold' Shops

I agree with Collects82, who presents some good points. Also, economics says that if you believe these shops are creating a negative externality on society, then you should just tax them accordingly to compensate for that externality, not outright ban them. Then those extra tax dollars, while imposing a disincentive on these businesses, yield funds to correct for the downsides on society of such shops doing business.

I worked at a cash for gold place for 5 days only, and my experience there is that the store goes hand in hand with the drug trade and the fencing market for thieves. I rarely saw "good" people shop there. When that place shut down one of its locations a year later the neighbourhood looked clean and different. Most of the customers I encountered were straight-up thieves fencing multiples of the same item or still had the tag on it (!), drug addicts with glazed eyes, and more drug addicts trying to pawn or sell their mothers' jewelry. The other type of customer that I saw was the unfortunate, down on their luck, and non-educated people who are actual repeat customers because during the 2011-2012 boom they sold their gold to this shop owner who is a nasty person and still buy all his lines. His selling techniques were, "sell all your gold, the price is crashing" and "sell your gold the high prices will crash soon!". Everything is done very fast so you don't have time to think or calculate.

I'll tell you guys a few way that they can cheat you, and has nothing to do with scales. One is their buy price: it won't be advertised in or outside the store. The method here is to be good at "grading" to be very fast at it, and take your item as fast as they can. The other method is to underkarat the person, so if a 14K ring comes in they will give you the 10K price even though they may or may not acid test and weigh the item right in front of you, and this practice makes it appear transparent to the customer. They will weigh it in front of you in grams, but their buy price is so secret that they do not tell new employees, he will just pass the customer on to the owner and the owner gives the buy price. Very seedy.