CONFESSIONS OF A GOLD BUYER

I’ve heard stories about old Texas coin shops that sold counterfeit collections to oil millionaires and Mexican construction magnates. These shops used all the old tricks that no longer work: blowing cigar smoke onto silver coins in paper bags to make them look aged, filing and restamping coins with rare dates, and sealing coins in plastic squares so they could be sold as uncirculated. They would assemble a team—a security salesman, say, a corrupt appraiser, and an insurance guy—and they’d sell the coins, overappraise them, provide the security system to guard them, and then steal them back before anyone was the wiser.

Ronnie was an innovator in this world. Around 1980, he opened a coin shop on the corner of Houston and Sixth in downtown Fort Worth, calling it Fort Worth Gold and Silver Exchange. Right about when he opened his shop, there was a rally in metal prices—gold and silver tripled in price between 1978 and 1980. Ronnie, who was already an expert in bullion, realized there was an even better way to make quick cash: buying gold and silver from the public.

Ronnie’s entry into the gold- and silver-buying business came just as the Hunt brothers, from Dallas, nearly succeeded in cornering the market on silver, before they went bankrupt. The news was full of talk about the scarcity of gold and silver and the certainty that precious metals were the only sure-fire get-rich-quick investment. Which, strange though it is, actually makes the average man want to sell his silver and gold.

Ronnie was running full-page “We’ll Pay Cash for Your Old Gold and Silver” ads in the Fort Worth Star-Telegram and the Dallas Morning News, and people drove from all over the metroplex to sell their jewelry. By the time I arrived at the store, we often had lines of thirty, forty, fifty people waiting outside before opening to get to the “buy counter.” Ronnie’s great success was that, once he made a little money from the “buys”—as they’re still called in the industry today—he expanded his coin shop into a full-fledged jewelry store.

But the real money was always in the buys—I’ll explain why in a moment—and the brilliance of Ronnie Cooper’s style was that the luxury jewelers at that time considered themselves morally and socially superior to the practice of buying jewelry from the public (discreetly brokering the private estates of well-established clients was another matter, of course). Ronnie knew the real money was in cheap chains and college rings and old wedding bands, and he understood that the Average Joe didn’t want to walk into a grubby pawnshop to sell his gold: he wanted to be treated with respect.

As soon as you walked into Fort Worth Gold and Silver Exchange and were greeted by one of the beautiful twenty-year-old hostesses who worked part-time at our store while going to college at Texas Christian University only a few miles away, you knew you were going to get the best price for your jewelry. And all were welcome: a homeless guy walking into the store with a paper bag full of gold wedding bands was treated exactly the same as a newly divorced Texas socialite wanting to sell her two-carat D Flawless round.

When they hired you at Fort Worth Gold, for the first month you vacuumed the carpets, changed the ashtrays, restocked the box room, and learned how to steam clean a customer’s jewelry while he or she waited. After you had the flavor of the place, they put you on the buy counter. And this, I realized much later when I ran a store of my own, was perhaps the most ingenious trick in Ronnie’s bag: because the young men and women working the buys were innocents, brand-new to the business, and because they had to get their prices from the old experts who worked desks in the back, we made our buy offers with a sincerity, trustworthiness, and enthusiasm that could never be duplicated by even the cleverest old diamond man. We were too young, too dumb, and too smartly dressed to cheat anyone.

I will never forget the first time I realized we were ripping people off.

To read the complete article, see:
We Buy Broken Gold (http://laphamsquarterly.org/swindle-fraud/we-buy-broken-gold)

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