Independent Northwest Indiana jewelry retailers urged customers to educate themselves before selling gold valuables and work with long-established businesses that have credibility.
Some jewelers also recommended that state lawmakers draft legislation to better regulate the gold-buying business by ensuring all entities are licensed and aren't operating by different standards.
Within the past half-decade, Highland Jewelers and Valparaiso's Martin Binder Jeweler are among the longtime stores that have added gold buying to their services. Others such as Albert's Diamond Jewelers in Schererville and Hobart have been buying the precious metal for several decades, said Fred Halpern, an owner of the family business established in 1905.
Halpern said retailers with strong community ties "have skin in the game," which forces them to provide fair values on jewelry. He said customers also should research prices and comparison shop with the increased attention on gold buying.
"It's an extension of our business and we want to be proud of what we do and how we treat people," said Joshua Halpern, Fred's son and part owner of Albert's.
Gold buying ramped up in 2007 as a result of a sharp run-up in prices, the Halperns said. Gold futures closed the trading day down $5.40 to $1,654.50 an ounce Thursday. The price set a record in early September when gold futures traded higher than $1,900 an ounce.
Robert Flude III, owner of Martin Binder Jeweler, said customers may bristle at gold prices fluctuations during the day, but buyers have to balance the need to protect themselves from taking losses on items with being fair to customers.
The trends in jewelry sales are also changing. In the throes of the recession, customers often were people who needed to liquidate their gold valuables for cash, said Greg Engstrom, owner of four pawn shops in Northwest Indiana and Engstrom Jewelers in Valparaiso.
"Really the people that got into financial trouble, most of them have sold most of their excess gold by now over the past couple years," Engstrom said. "So now we're seeing a trend for more outdated, yellow gold or herringbone chains that people are not going to wear again."
Karen Fowler, co-owner of Highland Jewelers in Highland, said customers are more often asking staff to make custom jewelry from scrap gold or use old items to buy new ones. Fred Halpern, of Albert's, said in some cases, people can make out with more than what they originally spent on the ring, necklace, bracelet or other piece of jewelry.
Region gold buyers say the fluctuating price of gold is linked to global economic conditions and investor confidence. Engstrom said a stronger dollar and stock market could cause the price to fall, but said there's always the chance for gold futures to rise based on other factors including other countries increasing their gold stockpiles.
Joshua Halpern said the growth in gold-buying business openings underscores the need to make sure all entities are playing by the same rules. He said his family's business makes a strong effort to ensure goods purchased are legitimately owned by the seller.
Pawnbrokers are required to have a state license to operate legally. Joshua Halpern and Engstrom encourage state lawmakers to draft legislation requiring buyers of jewelry to be licensed as well. Giving police departments access to records is a key piece of ensuring people who steal items to sell can be eventually caught.
"There are operators out there who aren't totally honest and take advantage of any situation," Engstrom said.
Above all, Fred Halpern said sellers should be cautious and make sure they are comfortable with the businesses they use.
"Go to somebody you know or trust," Fred Halpern said.