Michael Arrington posted an article defending Cash4Gold’s business. A previous TechCrunch post wrote about Cash4Gold’s $50 million yearly profit margin. A lot of people think they are a scam because c4g does not pay out on the spot price of gold.

Something Micheal’s defending post does not mention: no one is going to pay you for the spot price of gold. I suggest you try purchasing physical gold and then selling it. Here is what is going to happen, you are going to pay a 10%(ish) premium, and then sell it at a 10%(ish) discount. Now how much money did you make?

Cash4Gold or any other old jewelry for money service can pay you pretty much any thing they want as long as they don’t lie to you in the process. It might even be more profitable in the short term for them to start paying out even less.