The Gold's in the Mail

By: By Ron Burley | Source: AARP.org | May 30, 2009

Recent world events have revealed many new ways to lose a lifetime of savings, from collapsed 401(k)s to home values that melt faster than the Wicked Witch of the West. Even so, a recent letter to “On Your Side” from Randon Clark of West Hollywood, Calif., took me by surprise.

After watching much of his retirement nest egg evaporate, Clark decided he needed to find some new ways to protect what little he had left. After researching his options, he decided to invest some of his savings in gold. To do that, he contacted one of American’s largest gold dealers, Monex Precious Metals of Newport Beach, Calif.

A few days later, Clark sent Monex a cashier’s check for more than $20,000. He received the promise that his investment-grade coins would arrive in 10 business days.

Two weeks later, he was still waiting for the second of two packages to arrive. He called Monex and was told that the coins had been sent within days of the order and that company records indicated they’d been delivered.

Clark’s rock-solid investment had disappeared in the wind, or, to be more precise, in the U.S. Mail. (I’d always thought gold was kept in safes and transported by armored car. In this case, reality is stranger than fiction. Apparently, the preferred method for moving precious metal is to stick some stamps on it.)

When Clark asked Monex to reship the coins or refund his money, he was told he’d have to wait until after the company had settled its claim with the U.S. Postal Service. The letter to him read, in part, “We expect the initial claim that we have filed with the St. Louis office of the U.S. Postal Service to be rejected, which is their usual procedure when a package is misdelivered by them, but signed for by someone, as opposed to lost or stolen when in their custody. We then appeal that initial rejection. This is the usual Post Office claim procedure. We are sorry you are having to go through this aggravating experience, which has been caused by the U.S. Postal Service.”

That’s when Clark contacted me.

“If I’d have known they were going to stick my life’s savings in the mail, I would have driven the 50 miles to pick up the coins myself,” he said. “It’s their mistake, but I’m the one paying for it.”

I agreed with him. The choice of courier was up to Monex. The company had the business relationship with the Postal Service; Clark didn’t.

If the courier lost the coins, that was Monex’s problem. The company’s transaction with Clark wasn’t complete until he had the coins in his possession. For Monex to refuse a refund or replacement until the company settled with the Postal Service wasn’t right.

I started work after the close of business, so I left a couple of messages on the Monex voice-mail system and dropped a few e-mail inquiries to addresses I’d located online. (Tip: When contacting a company, don’t limit yourself to just the customer-service line. Use the Web to find as many access points as possible. The more eyes and ears get your message, the better your chances of actually getting a response.)

Early the next day, I received a call from Celeste Collins, an administrator at Monex. She said she’d pull together the records on Clark’s purchase, talk it over with the company’s management, and have someone get back with me.

The day afterward, the in-house counsel for Monex, Greg Walker, gave me a call. He said they’d decided to provide Clark a replacement set of coins after all, if he would just give them written assurance that if the original set ever showed up, he’d send it back.

Deal done, again. Randon Clark finally received his shipment—almost three months after his original order.

Walker also explained that the U.S. Postal Service has earned its place as Monex’s primary shipper. “In our experience, the incidence of lost shipments by the post office has been very low, and the lowest of all the shippers we’ve tried,” he said. “Payment for lost shipments has also been best by the Post Office.”

Even though there was a happy ending here, I’d strongly recommend that investors be very careful when conducting any large transaction that is not face to face. Take your time, and make sure you understand all the pitfalls—including whose money is on the line if something gets lost in the mail, whether the shipment contains stock certificates, stamps, or gold coins.

Even if the package makes it through the post, it’s your word against theirs if an item is missing or the count is wrong. Randon Clark was lucky; he finally got what he ordered from a company that was willing to do the right thing—albeit under the gaze of AARP.