NEW YORK — Forget about cash, credit or checks for buying gold jewelry. Consumers now have the option to use their gold to buy gold.
Through a partnership with gold investment Web site GoldMoney.com, four-month-old jewelry e-tailer Saisonfashiongold.com will now accept payments made in gold grams for its 18-karat gold earrings, bracelets, necklaces, brooches and pendants.
“The idea was to create an alternative currency, especially for the booming e-commerce industry,” said Sarah DaVanzo, founder of Saison Fashion Gold and a former chairman of GoldMoney.com.
But in today’s era of the falling U.S. dollar, paying with gold — an investment historically seen as a safe bet during times of economic instability — is nearly a godsend for savvy investors, especially during the holiday season.
New York-based Saisonfashiongold.com was launched in September through a partnership with Harper’s Bazaar magazine. The Saison brand is managed by a company called Gold, which specializes in building branded gold jewelry businesses.
Saisonfashiongold.com’s 50-piece gold collection, which ranges in price from $100 to $3,000, is designed for each season and is available in limited quantities. All of the items’ sizes are adjustable.
The idea to accept gold as payment on the Web site was spawned about a month ago by DaVanzo. After listening to several customer service calls to Saisonfashiongold.com, she realized that many of the company’s male clients were specifically interested in the quality of the gold Saison uses.
Following a hunch, “I said, ‘I bet you some of these guys have gold holdings,’” DaVanza explained. “I called up James [Turk, founder of GoldMoney.com] and said, ‘What do you think about this?’” The partnership officially launched Dec. 10.
This is how it works: If they’re not investors in gold already, consumers can purchase gold coins or bars electronically at GoldMoney.com, which is headquartered in the British Channel Islands.
The gold is subsequently stored in a subvault at GoldMoney.com’s vault location near London, where currently $40 million of gold is being stored. Consumers can then make a payment to Saisonfashiongold.com via GoldMoney.com.
Gold investors are drawn to Saison, DaVanza said, because it offers higher-quality, 18-karat gold, which is made of 75 percent gold, as opposed to more easily found 14-karat gold jewelry, which consists of 58 percent gold.
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Paying with gold grams is useful for several reasons. For one, gold “has proven itself to be a means of protection in terms of rising inflation,” said Turk, who, besides creating GoldMoney.com in 2001, is also author of the forthcoming book “The Coming Collapse of the Dollar and How to Profit From It: Make a Fortune by Investing in Gold and Other Hard Assets” (Doubleday).
“It’s becoming clear to people around the world that the [U.S.] dollar is in a period of decline.…The euro is obviously one alternative, and so is gold,” Turk said. “Not only is gold money, in the sense it can be used for economic calculation, [but] oil prices today are no more expensive in gold terms than they were in the 1950s.”
Therefore, for those who have invested in gold for even one year, buying gold jewelry on Saison with their holdings is an easy way to save money, as the value of gold currently sits near a 16-year high and is expected to rise higher, said Turk. A $200 investment of 15 grams of gold at the Dec. 31, 2003, exchange rate of $13.36 per gram, for example, would be worth around $212 based on current exchange rates.
For merchants, payment via gold grams is beneficial because fees, such as those paid to Visa and Mastercard, are reduced dramatically. Further, the risk of credit card fraud is eliminated.
“If you’re selling $200 worth of product, you get $200 worth of gold,” said Turk. “Once you’re paid, you stay paid.”