WCYT

THE television adverts tempt you with big money and lure you into the trap of believing that you're about to pocket a small fortune. But don't be misled. All that glitters definitely isn't gold.

With the price of gold soaring to record levels more and more companies are starting up and telling you to get that unwanted gold and jewellery out of your trinket box and cash it in.

They try to tempt you with amazing prices, but thousands of hard-up families are being fobbed off with prices that are far too low, a survey by Which magazine has revealed.

In addition to the Which report, there is talk that the Government's watchdog, Consumer Direct, is carrying out its own survey into this new gold phenomenon to see who are the pirates and who are the genuine buyers.

One of the nation's biggest buyers offered a miserable £38.57 for three items worth £729. The offered a researcher £9.64 for a £215 bangle and said a £399 necklace was worth £22.50. Another company told an investigator a hallmarked 9ct gold necklace bought for £399 was "100% non-precious materials" and had no value. They even demanded £10.95 to return it.

Which? Money found that on average "as advertised on TV" gold merchants gave the worst rates, offering less than a tenth of the jewellery's retail value.

Cash4Gold, which boasts "900,000 satisfied customers" on its website, paid a tenner for a bracelet worth £115 compared with £26 from a pawnbroker and £33 from a jeweller. The study found television advertisers paid 6% of purchase price for second-hand gold. High street shops coughed up four times more at 25%.

With gold at an all-time high - £735 an ounce last month - there has been a huge rush to cash in. Which? said: "We expected even the best merchants to quote significantly less than we paid because they offer only meltdown value.

"But we were amazed to be offered anything from just over £6 to £33 for our £115 bracelet." Researchers bought four sets of identical 9ct bracelets, bangles and necklaces from H. Samuel and Ernest Jones.

“They were valued by four TV gold buyers, three independent jewellers and three pawnbrokers. Which? chief executive Peter Vicary-Smith said: "The poor value TV gold buyers provide is simply shocking. People could almost certainly get more elsewhere."

Cash4Gold said: "We are clear with consumers that our prices are based upon melting down the gold, even telling them on our website that they might get higher prices from pawn shops or jewellery stores which can resell the items."

Valuing your gold
The value of scrap gold is based on weight and quality. While 24ct will get the best price, most jewellery is more like 9ct.

A set of good quality digital kitchen scales should be accurate enough to tell you the weight of your gold, and if you can find out the quality from the hallmark, you can get an idea of what it is worth before you sell it. This can be a little tricky, however.

The world price for gold is quoted in dollars per troy ounce, while the scrap value of gold in the UK is generally quoted in pounds sterling per gram. But basically, you divide the troy ounce price, by 31.1035 to convert to a price per gram.

For carat golds, multiply by the caratage and divide by 24, so for example £ x 9 /24 = intrinsic value of 9 carat gold. Some companies will require you to post off your gold or bring it to a party before they will value it, making it difficult to shop around, while others offer an online calculator to show how much you can expect to receive. Although this makes things easier, you need to take these with a pinch of salt,

Gold parties
A trend that started in the US and has been exported to the UK, gold parties are run along the same lines as Tupperware parties. But rather than get your friends together and buy kitchen utensils, you bring your unwanted gold and sell it to the valuer who also comes along.

The host gets a commission from anything sold, and £35 towards the costs of running the party. This means that you will get better value if you have the time and space to host your own rather than attend a friend's gold party, if you want to go down this route.