Bearing gifts of gold, leaving with cold cash - A new twist on the holiday party: Guests get paid

Bearing gifts of gold, leaving with cold cash - A new twist on the holiday party: Guests get paid
By Wendy Donahue
Copyright © 2009, Chicago Tribune
December 20, 2009
http://www.chicagotribune.com/business/yourmoney/chi-tc-ym-gold-party-1220dec20,0,218667.story


Gold has sparked many rivalries throughout history, though not typically genial ones at wine-and-cheese parties.

That is, not until its price broke records in the prelude to the holidays, exceeding $1,100 an ounce. Silver also surged to a 10-year high of $18 an ounce.

Thus, a home-entertaining trend: gold parties, where guests come bearing unwanted gold, sterling silver and platinum, usually jewelry, to be evaluated by an appraiser. If the pieces are found to be of value, the jeweler writes a check, which beats a cup of eggnog for making spirits bright.

And so it was that Sue Ireland sat down at a neighbor's kitchen table, laying old chains, bracelets and coins before J. Ford Sunderland, a co-founder of Gold Party Chicago.

"Usually with these types of parties, you leave $200 to $300 poorer," said Tonya Baise, who decided to host the gold party after attending one last summer. "This is the only one where you walk away with money. Plus, you get rid of stuff."

Sunderland works on the sidelines so friends can enjoy each other. His alcove, however, quickly becomes a gravitational force.

"I thought, 'What am I going to do with this?' I almost threw it out," Ireland told Sunderland as he looked at her gold coin, which her grandmother got for opening a CD at a bank years ago.

With a loupe around his neck and a scale within reach, Sunderland rubbed Ireland's chains on a small piece of slate and squeezed drops of nitric acid from food-coloring bottles to determine the karat, or purity of gold, of each item.

"Anyone who's lived through the '80s has some gold in their jewelry box," Sunderland said.

Anything that's 10 karat gold or more, including broken chains, is fair game for him to buy and resell to refineries, which melt it down.

And he has been buying. Gold Party Chicago, founded by Sunderland and his wife last year, had three other parties the same night and has averaged 10 a week.

"Old boyfriend jewelry and herringbone chains, I buy a lot of those," Sunderland said. (Herringbone chains often kink and can't be fixed.)

Weighing everything and punching numbers into his calculator, Sunderland quietly told Ireland her tally: "$609.71."

"Wow," Ireland responded. "I thought if I came out with $100 I'd be a lucky girl."

A grandfather's sterling-silver baby cup was deemed to be worth $8.57; the guest decided the sentimental value exceeded the dollar amount and kept it.

On average, attendees walk away with $200 to $250. The hostess gets 10 percent of the night's total, plus 3 percent from future parties booked by any guests that night.

The business model has low overhead, so "I'm able to pay more than the mail-in or scrap price," said Sunderland, a former owner of James & Sons jewelers.

For a 1-ounce gold coin, he might pay 88 percent of the market value; for scrap sterling silver, about 45 percent, because silver is more difficult to refine, so he must accumulate a lot first. Also, quality varies.

"After all is said and done, we get a 30 percent return on all we buy," Sunderland said.

Stepping forth with a second batch of jewelry, Ireland declared, "We're not done yet."

Her second subtotal hit $728.02, for a total of $1,337.73, the night's grandest.

"That ride home was worth it," Ireland said.

wdonahue@tribune.com