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Cash for gold: State legislators seek tougher laws to battle illegal sales

An electronic sign advertising a secondhand dealer that pays cash for gold and other precious metals can be seen roadside on South 320th Street. - Jacinda Howard/The Mirror
An electronic sign advertising a secondhand dealer that pays cash for gold and other precious metals can be seen roadside on South 320th Street.
— image credit: Jacinda Howard/The Mirror

30th District legislators have introduced a bill intended to regulate secondhand dealers who buy or sell precious metals.

As the price of gold and silver has increased in recent years, the number of secondhand dealers offering to buy precious metals has also increased. House Bill 1213, sponsored by 30th District State Reps. Katrina Asay (R) and Mark Miloscia (D), aims to strengthen standards on transactions involving precious metals, such as jewelry.

The goal is to make it easier for law enforcement to recover stolen goods being illegally sold at secondhand stores, commonly referred to as “cash for gold” businesses.

“The proposed legislation establishes and implements stricter standards relating to property transactions involving gold and other precious metals,” police chief Brian Wilson said in a prepared statement. “It will provide police officers with additional time and tools to identify and recover stolen property often associated with the crime of burglary.”

Easy money

There’s been an uptick in home burglaries and robberies statewide, Asay said. Federal Way has seen a 15 percent increase in home burglaries and a 13 percent increase in jewelry theft associated with home burglaries, she said.

Often, these crimes include the theft of precious metals that are later sold at secondhand stores.

“The problem is coming from some of the ‘here today, gone tomorrow’ secondhand dealers,” Asay said.

Record keeping

The bill would entail more stringent documenting and record keeping pertaining to transactions involving precious metals. It would require secondhand dealers to take responsibility for ensuring they are accepting rightfully owned products. It would also demand a wealth of information from sellers attempting to exchange metals for money.

The bill would require:

• The recording, in English, of the date and time, name of the employee and represented business conducting the transaction. Dealers must also photograph and obtain the signature of the seller.

• The name, date of birth, sex, height, weight, race, address and telephone number of the seller, documented in English. The secondhand dealer must make and keep a full copy of both sides of a seller’s identification.

• A recorded description, including the brand name, serial number, model number and descriptive details of the property pledged, bought or consigned.

• The seller be subject to fingerprinting if the amount paid or loaned in accordance with the item is more than $100.

• Payment by check for transactions exceeding $100.

• The dealer hold on to the pledged item for a minimum of 45 days.

“If you’re selling stolen property it gives the victim time to recover the property before it’s sent out of state, melted down, whatever,” Asay said.

Anyone selling precious metals legitimately should easily meet the bill’s requirements, she said.

Federal Way City Councilman Jim Ferrell said the bill is designed to provide uniformity and clearly outline expectations of secondhand dealers. Some dealers consider themselves akin to pawn shops and follow laws that apply to such. Other dealers consider themselves different from pawn shops and are quick to turn a profit on precious metal goods.

“There’s a lack of uniformity in regard to expectation and practice,” Ferrell said.

Influence on business

Sean Criss, a sales employee at Federal Way Custom Jewelers, said he generally supports the bill, but has concerns. His shop pays out on transactions when items are accepted. The longer the law requires secondhand dealers to hold on to recently purchased precious metal items, the more chance there is that the price of the metal will drop, and Federal Way Custom Jewelers will lose money on the transaction, Criss said.

“The gold market changes daily,” he said.

Federal Way Custom Jewelers has done business in Federal Way since 1995. The business buys gold, jewelry and coins, and already abides by strict recording policies, Criss said.

The business holds on to items for 30 days before reselling or otherwise making a profit on merchandise. Employees take copies of every seller’s identification. They issue checks for large transactions. They file a police report every time they take in an item. Criss considers these measures required by law.

To be effective in addressing dealers that consider themselves exempt from the existing pawn shop laws, the proposed bill must not only be passed, but enforced, Criss said. Without enforcement, the bill would only harm secondhand dealers that are already law abiding, he said.

“It’s the people that don’t follow the rules that are causing the problems,” he said. “It just hurts the people that are following the rules.”

Check it out

Read House Bill 1213 in full at apps.leg.wa.gov.

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