VentureBeat

[Updated: Cash4Gold representative Weronika Cwir has responded, and vehemently denied many of the allegations made in this article. She said the main source VentureBeat quoted was a short-term employee terminated by the company who has malicious intent. Below is her response in italics:]

Virtually every point made by the author of the posting is false or misleading. Following is a list of some of those statements:

1) It is false to claim there is a Cash4Gold “scam.” Furthermore, no employee is ever taught such a “scam.”
2) It is false to claim that the company insures the refiner’s pack “according to how much they feel your items are worth.” In fact, the insurance on the refiner’s pack is provided free of charge by the company and is not based on any assessment by the company of the value of the items being sent. (How could the company evaluate items before they are received?)
3) It is false to claim that the company doesn’t tell customers when their pack is received. In fact, the company immediately tracks items received and there is no delay in so informing those who inquire.
4) It is false to suggest the company uses inappropriate or insufficient methods for evaluating jewelry. In fact, Cash4Gold uses state-of-the-art equipment and techniques to evaluate precious metals. The methods used are well-known among jewelry experts and Cash4Gold’s proprietary standards far exceed those of competitors.
5) It is false to claim that the company’s site has been closed for “health” violations. In fact, the refinery and testing facility are A-rated by OSHA for being safe environments.
6) It is false to claim that checks are dated 3-4 days before they are sent out. In fact, as an internal audit recently confirmed, checks are dated the same day they are sent out.
7) It is false to claim the company shortcuts the 10-day period for customers to ask for their items back. In fact, the company makes it very easy to ask for the return of materials – by phone, e-mail or mail – and holds items for an extra 5 days beyond the 10 to accommodate such requests. This is supported by the fact that very few customers complain that they missed the time period cutoff.
It is false to claim that it is difficult for customers to get through to the company’s customer service representatives. In fact, the company has invested significant resources in customer service and has call metrics consistent with industry standards. Nine out of 10 calls are answered within one minute and anyone making even a modest effort to reach customer service will have no problems.
9) It is false to claim that “97% of the time customers are outraged” by the amount offered. In fact, quite the opposite is true. More than 93% of customers cash the Cash4Gold check and are satisfied with the transaction.
10) It is false, insupportable and abhorrent to claim that the company has ever denied receiving an item so that top executives can “get first dibs.” This is tantamount to an accusation of theft and we would encourage anyone with evidence of such a crime to report it to the police. It is simply false, defamatory and irresponsible to make such a claim.

There are clear facts and documents related to these matters and this list does not include every falsehood in the posting.

Thank you for your prompt attention to this matter. I look forward to hearing back from you with regard to immediate steps you are taking to remove this defamatory content from your site.

Regards,
Weronika

If you watched the Super Bowl this past Sunday, then you already know about Cash4Gold. In a comedic coup, the gold-smelting startup recruited both Ed McMahon and MC Hammer for one of the event’s coveted TV spots. “I can get cash for this gold medallion of me wearing a gold medallion!” exclaims Hammer, with McMahon chortling, “My gold hip replacement.”

Yes, the economy is obviously in dire straits when a company that buys your used wedding rings can lay down $3 million for a 30-second ad. But behind the chuckling, Cash4Gold is a serious startup.

The company has enjoyed a meteoric rise over the past couple of years and recently beat out any number of hopeful startups to take a whopping $40 million from General Catalyst Partners and Highland Capital Partners, at least according to peHUB. By all reports, nobody on either side of the investment is talking, with the exception of an email Xconomy received from General Catalyst that confirmed the company’s presence in its portfolio.

That’s no surprise; there’s a long tradition in venture capital of touting impressive-sounding companies and remaining mute on potentially embarrassing, if profitable enterprises, a tactic environmentally sensitive Kleiner Perkins, for one, has chosen for its investment in the oil-drilling outfit Terralliance. The silence is to be expected.

Yet others are beginning to let loose — customers and employees — and some aren’t happy. Yesterday a post titled 10 Confessions of a Cash4Gold Employee hit the Consumerist via ComplaintsBoard. “On my first day of being hired, I was taught the “Cash 4 Gold Scam” from beginning to end,” begins the poster. Here are some choice nuggets:

2. We receive your “Refiner’s Pack” within 3-4 days, BUT we are instructed to tell you that it takes “7-10 business days, for us to receive your pack, ALTHOUGH many times, your package has already arrived. (All cash4gold customers who have called customer service to track a package can vouch for this)…

3. Your jewelry gets appraised by hand, a magnifying glass, a plastic container, a small weight pad, and a bottle of ORANGISH fluid … I have witness testers being transported to Medical Centers, due to the testing department environment. There is literally a cloud of smoke in the air from acid and other testing material. If you were thinking it was some state-of-the-art testing facility, you thought WRONG.

4. Although the payment (check) for your item is dated within 24 hrs of testing your jewelry, we SOMETIMES DO NOT actually send out the check until up to 3-4 days later. (if you are a customer check the date the check was issued against the stamped date on the envelope.)

5. We do offer a 100% Satisfaction Guarantee or your jewelry returned, BUT THE CATCH IS, that the guarantee is to contact us within 10 DAYS from when your check is DATED…

6. You generally receive your check around the “7th-10th” business day, AND majority of the time Customers are outraged when they lay eyes on the amount of their check. Some Customer’s even receive a check for 0.01 cents.

To boil down the complaints of the employee and some customers who have left internet posts on the company, Cash4Gold gives customers 10 days to dispute the value of their check or ask for their gold to be returned but purposely delays the check to the point that it sometimes arrives after those 10 days are up — and the gold is already melted. According to the allegations, it also intentionally underpays, forcing unhappy customers to call and ask for higher rates, which customer service reps are trained to haggle over.

The Better Business Bureau confirms the complaints, of which it has received over 250 — although it does gives the company a C+ rating for responding to those complaints it receives.

Another review on the BBB suggests the company is also running a postal service scam in which it “misplaces” packages it receives, paying less than their value in insurance. And, as a commenter on the Consumerist points out, Cash4Gold is a thief’s dream in that it makes stolen goods utterly untraceable, dryly saying, “I’m looking forward to Cash4Electronics, Cash4Babies and Cash4KidnappedPeople in the near future.”

Yet the recession trudges on, and people are still cash-strapped; many will be pleased with any payment for their jewelry. And as long as Cash4Gold responds to customer complaints, it’s unlikely the company will get much attention from the long arm of the law.

Finally, from an investment standpoint, the company seems solid; according to peHUB’s post (now behind a subscription wall), the company could be making a million dollars a week. There aren’t many web startups that can claim as much. So I’m curious to hear from readers — if you were in a venture capitalist’s shoes, would you invest in Cash4Gold?

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Tags: co:cash4gold, inv:General-Catalyst-Partners, inv:Highland-Capital-Partners