Out of all precious metals, gold is the most popular. It is an iconic metal collected by young and old alike. The primary reason for the gold’s immense popularity is because it has historically retained its value even through some of the world’s worst recessions and financial crises.
As with any precious commodity however, buyers of gold are targeted and scammed on a regular basis. Avoiding gold scams can be hard to do. Recognising them is essential if you are planning on investing in or trading the metal.
This post will tell you how to avoid the most common gold coin scams:
A good way of avoiding scams is by buying collectible gold coins. Unlike ordinary gold bars, collectible coins are fully traceable and often have unique maker’s marks and codes. The marks and codes stamped on collectibles mean they are identifiable and therefore very hard for forgers to fake. You can find collectibles all over the web, from 7k Metals offering collectible coins to those offered by government bodies. You do need to ensure any collectible purchases you make do have unique stamps.
When purchasing collectible coins it’s important to make sure that you do not buy ones that have inflated prices purely because they are collectibles. It’s never wise to buy gold coins for more than their real market value. A lot of collectors make the mistake of buying gold for more than its worth, only to find they cannot get their money back when the time comes to sell. In addition to never paying more for coins than their underlying value, it is also wise to only ever buy coins with high carats. The higher a coin’s carat the more it will sell for in the future.
A big mistake many amateur collectors make is buying coins without certification. In most countries, gold dealers are required to provide certificates of authenticity. Sometimes these certificates contain information regarding the coin’s origin, i.e., the mine that it was sourced from. Insist on seeing certification before buying a collectible coin even if it’s from a reputable dealer. You can request certification via email. In the past physical certificates were issued but now it’s more common for them to be sent along with order confirmation and tracking information. Ensure certificates bear the dealer’s name on them.
Something that you need to bear in mind is that a certificate does not necessarily mean you are buying genuine gold. As certificates convince most people of a coin’s authenticity, scammers create fake ones. Fake certificates help them to sell their coins. It is therefore important to ensure that you only ever shop with verified retailers, ideally with positive reviews. Never buy gold from unlicensed dealers or from ones that are new on the scene. Stick to shopping with retailers that have been in business for a long time, have loyal customers, and have accrued positive reviews over the years.
When you are buying gold it is a good idea to try and buy it from dealers with brick-and-mortar stores. The ability to visit a dealer’s store will give you the opportunity to actually test gold yourself. Testing kits are widely available and take the anxiety and stress out of gold purchases. You can use them to verify a coin’s authenticity. If you do not have your own your chosen dealer will likely have one you can use. If they test gold for you make sure that you record it, just in case later on it turns out you were scammed.
As long as you buy gold from approved dealers which is something that will be covered in the next section, you can test gold when it arrives at your house. Never buy gold from new or suspicious websites even if you have a testing kit, however. If something arrives that’s not genuine or is of a lower carat than you paid there is no guarantee you will get a refund from a scam site. In fact, more often than not refunds are out of the question in such cases. Only approved dealers will honor customer refunds and returns.
One of the good things about gold is that it is popular. Anything as popular as gold is regulated. Individuals and businesses intent on trading the metal are required to get a license, verifying the legitimacy and the authenticity of their offerings. If licensure is a prerequisite to gold trading in your country, make sure that you only ever purchase gold from businesses that hold licenses. Most businesses will openly publish information about their licensing status. Ones that do not have any information to this effect typically do not have licenses. An absence of a license does not always mean a dealer is a scammer but it is not a good sign.
If licenses are not a dealing requirement in your country then instead of using licensing status to verify a dealer’s legitimacy instead rely on the length of time they have been operating and the number of reviews they have accumulated on their website. A dealer’s reviews can tell you a lot about them. Many consumers ignore reviews because they are unaware of how much information they can tell them. If reviews mean nothing to you then at least make sure you work with a dealer who has been in business for a while.
As touched on in the previous point a dealer’s reviews can tell you a lot about them. When consumers have negative experiences with businesses the first thing they tend to do is leave negative reviews. A lot of people overlook the significance of reviews. Reading them can help you get an idea of how genuine a dealer is as well as what the quality of their offerings is like. If a dealer’s reviews are bad across the board then you should avoid buying from them or having anything to do with them. Watch out for purchased reviews. It is common for retailers to buy positive reviews rather than earn them.You can’t always guarantee you aren’t going to get scammed when you are shopping online. What you can do however is take steps to try and protect yourself. Internet scams are more common than ever which has made avoiding them a real challenge. Taking the steps issued here in this post will help you protect yourself and limit your chances of getting conned.