Confessions of a gold-and-diamond-buying scam artist


It’s so obvious from the street level these places exist to prey upon the desperate.


What is “the old cigar-smoke trick with the counterfeit coins”?

It’s eerily like that TV show Pawn Stars…

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It’s eerily like every fucking salesperson I’ve ever worked with, or had the displeasure of dealing with. Some of them like to claim information is their currency, but really it’s more about making sure their target is given misinformation.


It’s in the full article. Basically, blowing smoke on a freshly made fake coin to make it look old.


I think there are two approaches to sales. The first approach is to take 'em for all they’re worth, and this approach is largely used in retail, where for most products, you will only have one sale with that customer. It is exactly what goes on in this article.

The second approach is to do your best to give your customer a good deal and a good experience, so that they will keep coming back. I couldn’t say how common this is in the broader sales world, but it’s a moneymaker in any industry where repeat sales are possible.


All these places are slimy. They’re on the same level as scum that do pay day loans, etc - as mentioned in the article… Often operating in the same building, naturally.
They prey on the credulous and the desperate. Some people can sleep at night easier than others…

I have a friend who’s a lawyer that sued a guy who used to prey on sailors and Marines here in Southern CA. He was retired military, BTW.
He would lease and sell them cars on credit at horrible rates, and repo stuff to later sell at auction in such a way as this -
My friend’s client was deployed, wife drove the car and it was towed for some parking offense.
The scumbag seller was contacted as the lien-holder and immediately grabbed the car out of the yard before the wife could, then later sold it at auction. Said scumbag then held the note out to them and said that they still owed the balance. He did not give her the chance to get the car back from him prior to it being sold, or asked for some shocking amount - that part I forget.
They won the suit and unfortunately it did not include the scumbag being strung up from the highest tree.


“Just a couple blocks up from here, there’s a place called Rubinstein’s. They’re very honest guys. They won’t pay you what it’s worth—nobody can, that’s not how this works—but they’ll pay more than anyone else.”

If no one will buy something for what it’s worth, then, well, what is something really worth?


Well there is wholesale value and retail value. Which is sort of the problem with the whole wholesale/distributor system - you’re retail costs are always going to be higher than perhaps the real worth of the item.

And for used items “worth” is relative. I could sell a rare comic book for full retail to an end buyer on ebay. If I went to a shop they wouldn’t give me the same price, they would give me considerably less so they make a profit selling it to the end user in their shop (or ebay).


[quote=“Jorpho, post:10, topic:53881, full:true”]If no one will buy something for what it’s worth, then, well, what is something really worth?[/quote]When you’re in a sales industry, you use the term of what something is “worth” to mean what it will typically be sold to the consumer at. Because of this, nobody will ever buy something for “what it’s worth” except another consumer - industry purchasers need to make a profit, and that means not only covering all overheads, but also accounting for mis-purchases, stagnant inventory, devaluation, etc.

I work in collectibles trading, and the simple fact is that in order to make money you can’t give more than 40-60% of value if you want to make a profit. Only about 60-70% of what you buy in will typically sell without getting clearanced or eBayed (which is effectively the same as clearancing), many recent collectibles actually devalue quickly, when handling collectibles you constantly run the risk of damaging them (and thus losing value), etc.

The cash-for-gold thing is not really the same for a few reasons.
First, its purchasing and valuation are being run on two different types of purchasing ideologies, each time picking the one that gives the lesser value to the customer: Their valuation is being done as if the item were a base commodity (raw gold) rather than a retail item (a finished ring). The calculations from this base price to the offer are being done as if it were a finished item (40-60%) instead of a base commodity (80-90%).
Second, there is no easy way for a customer to value the item themselves, as they typically won’t know exactly what they have. With collectibles, consumers can usually hit online stores or eBay and look up what their items are selling for. With jewelry, unless you know exactly what it is it’s hard to guess - how many karats is that diamond? What is the quality? Are those accent stones rubies or topaz? Is this setting in style or out of style? How do you even describe it so you can properly look it up?
Third, the types of people doing the cash-for-gold or general pawnbroker route are often desperate for quick money. Compare that to the collectibles market where the store is buying from the same customers they sell to - the typical collectibles transaction is not for cash, but for trade-in towards another collectible.

Of course, everything about this gets worse with dishonest shopkeepers - that’s when you get situations like the ones in TFA, and that can happen in any industry.

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Yup. For example, I know enough to usually know if a mechanic is bullshitting me, and when I find one who doesn’t, and does good work, he’ll have my business for years.

yep. And that’s part of the reason that car dealerships and real estate, where potential repeat sales are years away are some of the fraudiest…


I have to laugh when I see buyers advertising in the newspaper with coupons for an extra 10% or whatever. Don’t folks realize that if the buyer can afford to pay more than the original offer then the original offer was low anyway?

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