When you buy gold and silver online, you’re entering a market where authenticity concerns and pricing transparency vary dramatically between sellers. The convenience of online precious metals purchasing comes with real risks—counterfeit products, deceptive pricing, and fraudulent dealers operate alongside legitimate businesses. Industry data shows that online precious metals sales exceed $3 billion annually in the US alone, yet consumer protection agencies report hundreds of complaints yearly about misrepresented products or undelivered orders. Smart buyers protect themselves through careful dealer vetting, product verification, and secure payment practices. Understanding how the market actually works and where the common pitfalls exist makes the difference between a successful investment and an expensive mistake.
Dealer Verification Before Spending a Dollar
Legitimate dealers carry verifiable credentials that scam operations can’t fake. Membership in the Professional Numismatists Guild or accreditation from the Better Business Bureau with ratings of A or higher indicates established businesses with accountability. These organizations investigate complaints and can revoke memberships, creating real consequences for misconduct.
Years in business matter more than slick websites. Dealers operating for 10-20+ years have track records you can research. Check multiple review sources—Trustpilot, BBB, and precious metals forums. Look for patterns in complaints, not just overall ratings. A handful of negative reviews about shipping times differs dramatically from multiple complaints about counterfeit products or refused refunds.
State licensing requirements vary, but dealers should comply with their jurisdiction’s regulations. Some states require precious metals dealers to register and maintain bonds. Verify this information through state regulatory websites rather than trusting dealer claims.
Physical addresses and phone numbers that connect to real people signal legitimate operations. Test this by calling during business hours. Scam sites often use virtual addresses or provide only email contact. Legitimate dealers want you to reach them because building customer relationships drives their business.
Understanding Premium Structures and Pricing
The spot price you see on financial websites represents wholesale pricing for large contracts, not retail pricing for small purchases. Dealers add premiums covering their acquisition costs, storage, business operations, and profit margins. These premiums vary significantly based on product type and market conditions.
Government-minted coins like American Eagles or Canadian Maples carry premiums of 4-8% over spot in normal markets, though supply constraints can push these to 15% or higher. Generic rounds from private mints typically cost 2-4% over spot. Bars offer the lowest premiums—usually 1-3% over spot for larger sizes.
Compare total delivered costs between dealers, not just advertised prices. Some dealers advertise low premiums but charge excessive shipping or insurance fees. Calculate the all-in cost per ounce including every fee to make accurate comparisons.
Premium compression happens with larger purchases. Buying 100 ounces typically costs less per ounce than buying 10 ounces across most product types. However, don’t overextend your budget chasing lower premiums—liquidity and your ability to sell partial positions matters too.
Payment Methods and Security Considerations
Payment method affects both cost and risk. Bank wires and checks offer the lowest dealer costs, often resulting in lower prices or discounts of 2-4%. Credit cards add merchant fees that get passed to buyers through higher prices. However, credit cards provide dispute mechanisms and fraud protection that other methods lack.
Cryptocurrencies are increasingly accepted and sometimes offer discounts similar to wires. The risk is that crypto transactions are irreversible—if there’s a problem, you can’t dispute the charge. Only use crypto with dealers you’ve thoroughly vetted.
Never send money through untraceable methods like gift cards or person-to-person payment apps to strangers. These are hallmarks of scam operations. Legitimate dealers use standard business payment processors.
Secure your online accounts with strong, unique passwords and enable two-factor authentication wherever possible. Email compromise leading to changed bank information or shipping addresses is a real threat. Verify any changes through direct phone calls to the dealer, not through email responses.
Product Verification and Authenticity
Counterfeit gold and silver exist and are sophisticated enough to fool casual inspection. Buy products with strong authentication features—government-minted coins include specific design details and security features that counterfeiters struggle to replicate perfectly.
Popular products have extensive online resources showing authentic examples in detail. Before buying, study high-resolution images of the exact products you’re considering. Learn the specific details, dimensions, and weight specifications. Genuine American Silver Eagles weigh 31.101 grams—if yours weighs 31.0 or 31.2, there’s a problem.
Consider testing equipment for larger purchases. Electronic precious metals testers cost $200-500 and verify metal composition non-destructively. For smaller purchases, the cost isn’t justified, but the option exists for significant holdings.
Buy-back policies indicate dealer confidence in their products. Reputable dealers readily buy back what they sold you, often at competitive prices. This provides both a verification method and an exit strategy. If a dealer won’t buy back their own products, that’s a serious warning sign.
Storage and Delivery Security
Insurance during shipping should be mandatory and included or available at reasonable cost. Precious metals shipments are targets for theft. Signature requirements at delivery prevent package theft from porches. Some dealers offer discrete packaging that doesn’t advertise valuable contents.
Home delivery to secure locations makes sense for smaller orders, but accumulating large quantities at home creates security and insurance concerns. Home insurance policies often limit coverage for precious metals to $1,000-2,000 unless specifically scheduled.
Dealer storage programs or third-party vault storage solve security concerns for larger holdings. Costs typically run 0.5-1.0% annually. Verify that stored metals are allocated specifically to you rather than pooled—you want identifiable serial numbers, not generic inventory positions.
Document everything upon receipt. Photograph products and packaging immediately. Verify weights and measurements match specifications. Report discrepancies within the dealer’s stated timeframe, which is usually 3-7 days.
