Cash4Gold – What Did They Do Wrong?

We’ve all seen the commercial – happy people with hundreds of dollars in their hands talking excitedly about this great, well-known company that gives you the most money for your gold and unwanted jewelery. The pitch is pretty great, since everyone has at least few unmatched earrings, few unwanted bracelets, ugly gold necklaces our family members gave us… All you need to do is request a free “Refiner’s Return Pak” and once received, put all your unwanted gold and jewelery in it. In a few days, you will get a tracking number, your gold will be inspected and checked for precious metal content and ta-daa: You will either get a check or a direct deposit onto your bank account.

People went ahead and trusted this TV commercial and did the step 1. Step 2 came, then step 3… Finally, when the last step kicked in, a lot of them were very disappointed. The most money for their gold and unwanted jewelery had turned into the least money. The checks for $10.00, $12.00 started coming in, and people went crazy. Most of them tried to contact Cash4Gold’s customer service, but some decided to speak up.

Those who tried to contact the customer service, either succeeded (got triple the money or got their gold back) or not (never got to speak to their customer service reps).

Rob from Cockeyed.com saw their commercial and thought it was a scam. So his friend Brent K., after visiting local pawnshop, sent some of his scraped gold and jewelery to Cash4Gold. Imagine his surprise when he saw their check for $60, which was one third of the appraised value. He called them, and they brought the price up to $178. So what do you think?

Rob’s article was later featured in Consumerist.com. Because of Consumerist’s popularity and high PageRank, thousands of people who wanted to sell their gold read this article, started linking to it and helped bring it to the first page of Google’s results for their targeted keywords. That’s why Mr. Joe Laratro contacted Rob. In his e-mail, Laratro basically asked Rob to either remove or change the article, for a substantial financial offer. Since he never got any response from Rob, Laratro contacted him again asking the same thing.

Rob then wrote another article, put Laratro’s e-mails in it, put everyone at Cash4Gold at their knees and never backed down.

What did Mr. Joe Laratro do wrong? How should he have handled it better?

First, I have to emphasize that Cash4Gold only needs to be an example of a well-advertised company. Their actions (after reading few dozens pages of complaints on major consumer websites) are obviously wrong.  But, let’s think for a moment, and imagine that there were only 1-2 real complaints about this company. What was wrong about the way Laratro handled this sensitive matter?

Although Laratro seemed like he had some knowledge of Internet marketing (well, he is the president of Tandem Interactive – Trendy Online Marketing Solutions!), he also mentioned that he manages Cash4Gold’s reputation. Having that on mind, he did something no ethical reputation manager will ever do – contact the source of negative resources, and offer money in exchange of removing the article, comment etc.

Instead of contacting the affected customer and offering to work things out (return the gold/unwanted jewelery, pay out the full price of before appraised goods, apologize both on consumer websites and the customer etc.), he contacted the blogger who wrote the damaging article.

Instead of creating new content and reinforcing existing, positive content on the SERPs for Cash4Gold, Laratro wanted to use the easy way out and try to erase the negative content.

Thankfully, Rob did the right thing and decided to let everyone share their honest opinion.

And thanks to Internet and blogs, people can tell their honest opinion to thousands and thousands of others. They will share thoughts, experience and reviews, no matter how good or bad they are. That’s why we have to pay attention to what other users say about one’s product, service etc.

Andy Beal and Dr. Judy Strauss wrote in their book, Radically Transparent, that social media are like word-of-mouth on steroids. There is no better way of describing this phenomena!

If there weren’t for Rob at Cockeyed.com and his friend Brent K., Consumerist.com probably never would have known how much Cash4Gold pays its consumers. And as a result, thousands more never would have read the damaging article.

But then again, if Mr. Joe Laratro acted like an ethical reputation manager and showed a good faith in making things right, maybe things would have looked better for Cash4Gold. Now, their future isn’t that golden.