Jewelers See Increase in Gold Reselling

Call it retail in reverse: people walking into local jewelry stores to sell gold, not buy it. Several Springfield Avenue jewelers report that while Summit’s residents are not selling the family jewels to make ends meet, the high price of gold and a weak economy continues to make gold-buying a bigger part of their everyday business.

“The gold-buying business is all driven by the price of gold,” said Richard Lorenson, owner of Schroth & Lorenson Jewelers.

That price hit a record-high of more than $1,000 an ounce in March 2008, and since then, shaky financial markets have solidified strong demand for the metal.

"People have dug into their drawers and jewelry boxes and found things they don’t wear, and they’d just rather turn it in for cash or turn it in and buy something they will wear. Most of what we buy is broken pieces, old mountings, chains; or rings they got 30 years ago and never put on their finger,” he said.

Several customers come in each week to sell gold items, but rather than pocket the cash, the majority spend the money to purchase another item, he said.

“It’s not a huge thing for me. I do it as more of a customer service,” Lorenson said. “There are a lot of jewelry stores living on buying gold. That’s not what we do here.”

Henry Feldman, owner of Henry’s Fine Jewelry, said that in the past, his gold-buying was limited to customers who wanted to update their jewelry, or had something broken that could not be fixed. The high prices of the last year have increased the volume of his purchasing, but he continues to buy only from established customers, not people who come in off the street.

“It never was a major business for me, it never will be, and it is not,” he said. “I still have to sell, I still have to make, I still have to repair, and that’s how I make money.”

But the gold-selling business is brisk at Lanel Jewelry and Antiques, where an average of 10 people a day come in to sell gold jewelry, said vice president Alana Krutoyarsky. The shop, which opened in November, advertises its gold-buying with signs in its windows, on television, and in newspapers.

 “Most of the time they need money,” she said of the sellers. “People bring in their old jewelry, things they want to sell that they don’t need any more. They might be broken, they might be outdated. There’s a lot of chains, rings, earrings. We appraise it–we put it on a scale to begin with, which tells you the weight, and based on the value… that’s how you come up with your figure.”

The value of those sales ranges widely, Krutoyarsky said.

“It could be $5, it could be $5,000–it really depends on the piece,” she said, but added that on average sellers walk away with “a couple hundred.”

Another heavy advertiser is Walter Bauman Jewelers, which has several stores including one in Short Hills. Their Web site includes a coupon offering an additional 15 percent on the value of a gold item sold to the store. The store’s spokeswoman was unavailable to comment.

Gold’s high price has produced some scammers, said Lorenson. Stories of tearful women toting babies and fake gold chains–claiming they need to make their rent–have circulated among his jeweler friends, so that when one such woman appeared in his store, he did not test the necklace but simply said he was not interested, he recounted.

And some of the time, he tries to gently persuade customers to hold onto their gold.

“I’ll say, ‘Don’t you have a granddaughter or a niece that you can give this to? Because I am going to give you $15 for it. I’m going to make 90 cents on it. Much better to give it away.’”