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How to Spot a Scam: Red Flags to Look for When Dealing with Gold Dealers

Gold buying and selling is a lucrative business for bad actors. That’s why you need to be careful when dealing with gold dealers. If you’re planning to sell gold bullion or buy  from a company, there are some red flags that could indicate the dealer is not legitimate:

Bad Dealers Have No Relevant Experience

  • Bullion Dealers should be able to answer questions about gold, gold coins and bullion.
  • Dealers should be able to tell you where they got their gold from.
  • Dealers should be able to tell you how they are selling the gold: if it’s been melted down, what percentage of purity it is (for example, 90% or 99%), whether or not there are any dents in the coin (this affects its value), etc.

Many Dealer Locations Are Not Actually Owned by the Company

One of the first things you should look at when dealing with a gold dealer is who owns the company. Many times, the owner may not actually be located where they say they are. So before making a purchase, contact them directly and ask if they can provide their business license number and address so that you can verify their legitimacy with your local government agency (usually this means going to city hall).

If it’s not possible for them to provide this information immediately, request some time before making any purchases so that they can get back with you later on in order for both parties involved in any transaction involving large sums of money to feel secure about each other’s identity and intentions–especially during times when scams are common!

Bad Dealers Price their Products High

You should be wary of dealers who price their products high. This can be a sign that they are trying to make up for the low price by charging you a lot of fees and taxes, or that they’re selling you a fake product.

Bad Dealers Claim to Buy or Pay Top Dollar for Bullion, but Offer a Low Price

If you’re dealing with a gold dealer, be wary of any who claim to buy or pay top dollar for bullion but offer a low price.

A reputable dealer will offer you the best price they can afford. They won’t try to trick you into thinking that they’re paying more than they actually are because they want their business–they know that if their customers aren’t happy, those customers won’t come back and tell their friends about it either.

You should be able to trust your dealer just as much as he trusts you when it comes time for him to pay out on his end of the deal!

Bad Dealers Try To Pressure You Into Buying Now, or Selling Now And Getting A Seemingly Great Price Now (This is actually illegal)

If you feel pressured, leave. If you feel pressured and want to call the police, go ahead.

If you are selling gold, it is a legal activity. If someone pressures you into selling now for some reason other than “I’m interested in buying your gold”, they’re likely trying to scam you out of your hard-earned money.

If someone approaches you offering to buy your gold at an amazing rate (like double what other jewelers are paying), they may very well be trying to scam or rip off customers like yourself who have been misled into believing that they’re getting a great deal when really they’re not!

Gold dealers who are worth dealing with are easy to spot and they’ll never try to pressure you into anything.

A gold dealer who’s worth dealing with won’t try to pressure you into buying anything. They’ll let you know that there are other dealers in the area, and if they can’t provide what you’re looking for, then they’ll help point out other local options that might suit your needs better.

In addition to this, a reputable gold dealer will never:

  • Ask for payment up front. If they do ask for payment before work has been done or goods delivered, it’s likely because they don’t want their scam exposed until after they’ve already taken money from customers (and possibly even sold off those same items).
  • Offer guarantees or promises that seem too good to be true; if someone is offering free shipping on every order and/or an extended warranty on all products sold through their store–especially if these things aren’t standard industry practice–it may be because these claims are untrue (or at least exaggerated) and they’re hoping that customers won’t notice until after making purchases from them!

They are not able to answer questions about gold dealers.

If they are unable to answer questions about gold dealers, it’s a red flag. A reputable dealer should be able to give you the name of a gold dealer they have used in the past and will use again in the future.

If someone is not able to tell you where their gold comes from or who made it, this could indicate that it has been stolen or otherwise obtained illegally.

The dealer has a large staff, but few salespeople.

If the dealer has a large staff, but few salespeople and those who are there are not very knowledgeable about gold or silver products, this is a sign of a bad dealer. Salespeople should be able to answer questions about the product and show you what you’re buying before you make any decisions. They should also be able to answer your questions about the product so that there are no surprises when it arrives at your door step.

The dealer is vague about his identity or ability to conduct business.

If the dealer is vague about his identity or ability to conduct business, he may be a scammer. The dealer should be able to provide an address, phone number and website. If he can’t, it’s likely that he has no intention of conducting business with you in good faith.

You should also ask about other gold dealers in your area–and if they know of any reputable ones. If the dealer cannot answer these questions clearly and confidently, then there’s a good chance he’ll disappear once he gets your money (or even before).

The dealer refuses to accept credit cards as payment for gold coins.

If a gold dealer refuses to accept credit cards as payment for gold coins, it’s a red flag.

Credit cards are used by reputable dealers because they offer protection to both the buyer and seller. If your credit card company finds out that you’ve been scammed by a dealer who refused to accept them, they will reimburse you for any losses incurred in buying the fake coins or jewelry. The same goes for cash advances on your credit card–if there’s no problem with them (and there shouldn’t be), then this means that the seller has committed fraud against their own bank by using their account number without permission.

If someone wants to buy from me but doesn’t want me taking any kind of payment besides cash or check (or sometimes even not even checks), I don’t sell anything at all because I know they’re trying something shady on me!

You feel pressured to buy something immediately when you walk in the door of the dealership.

If you walk into a dealership and feel pressured to buy something immediately, that’s a red flag. The salesmen should be willing to take the time to explain their products and services to you. If they don’t have time for that, it could mean that they have something else on their mind–like getting rid of inventory before it turns into scrap metal!

If you don’t feel comfortable with how the dealer is treating you or your budget requirements, leave immediately! There are plenty of reputable gold dealers out there who won’t try any tricks like this one; but if one does pull them on you (and chances are good that they will), just walk away without looking back…

Gold dealers can be found online, in person and through company stores.

  • Gold dealers can be found online, in person and through company stores.
  • Online gold dealers are easier to research and investigate than in-person or company store dealers.
  • In-person gold dealers are more difficult to research and investigate than online or company store dealers.

You should always ask for an appraisal if you get one that seems too good to be true.

The most important thing to remember when dealing with gold dealers is to always ask for an appraisal if you get one that seems too good to be true. You have the right to have your jewelry appraised by another professional, and this should be done before you make any decisions about selling. The appraiser will give you an accurate price based on his or her personal opinion of the value of your piece(s).

If you’re still not satisfied with the offer from the dealer, try getting a third party appraisal from someone else in the industry who has no stake in whether or not he or she gets hired as a salesperson for this particular company (or any other company).

Check out how much gold the dealer has in stock – and how long they’ve been in business.

The first thing you should do when looking for a gold dealer is to check out their website. If it looks like something that was put together by a third grader, then you may want to keep looking. A legitimate business will have an established web presence and be willing to provide information about their company, including how long they’ve been in business and how much gold they have in stock right now.

Another way of checking whether or not your prospective dealer is legitimate is by visiting their physical location (if possible). Are there signs up outside? Do other customers seem happy with the service? Can you see people working inside through the windows? If so, this could be a sign that this place is legitimate – though it’s worth remembering never go anywhere alone!

If you’re going to a store that trades in gold, look into their location, ownership information and operating history.

If you’re going to a store that trades in gold, look into their location, ownership information and operating history. The best places are usually locally owned and operated. They’ve been around for many years, have an established reputation for being honest and reputable, and are open during normal business hours.

If you don’t know where to start looking for such a store near you or can’t find one online because it doesn’t have an official website (which should raise some red flags), consider asking friends or family members who might have dealt with them before whether they would recommend doing business there–and why!

Review these common red flags before you buy bullion or jewelry from a dealer

You may think that you’re an expert at spotting a scam, but there are many people who are fooled by frauds every day. Before you buy bullion or jewelry from a dealer, review these common red flags:

  • Pressure to buy immediately. If you feel pressured into purchasing something before you’ve had time to research it, consider walking away–even if it means losing out on an opportunity. It’s better to miss out on an opportunity than lose money in the long run!
  • Unreasonable prices for items in demand. If a dealer asks too much money for something that should be worth less (or nothing at all), be sure they can back up their claims with proof of authenticity and value before handing over any cash!


You can avoid being scammed if you know what to look out for. We hope these tips will help you find a trustworthy gold dealer who can guide you through the process of buying bullion or jewelry.