Diversify your business: Gold parties

Gold teeth, a £1,000 cigarette lighter and gold coins are some of the items that have turned up in pubs under Stephen Pearson's direction. Pearson is managing director of the company Party Cash 4 Gold partycash4gold.com​ - the idea being that punters turn up with their unwanted gold, silver and platinum and exchange it for cash.

In the latest twist, Pearson is targeting pubs with the idea, saying that the "unique" event can help liven up a quiet night and get new customers through the door.

"Pubs can experience quiet nights on some occasions. This is one way to alleviate this," says Pearson. "It's quite an original event. It isn't just a quiz night scenario and everyone who leaves there leaves with money. People don't have to buy anything."

Similar schemes that involve mailing in gold in special pouches to a gold agency are quite well known, but the party concept hasn't really caught on yet.

Both ideas come from the US and arrived in this country around two years ago, spurred on by the recession as well as the rising price of gold. Pearson says the value of gold currently stands at £840 per ounce, compared with this time last year when it stood at £540 an ounce.

Pearson says people are "pleasantly surprised" when they realise how much their broken necklaces and single earrings are worth, as they tend to value these items at their purchase price. But as the value of gold has risen significantly, he says they are often undervaluing them.

Pearson argues that a lot of people wouldn't consider taking these items to their local pawn shop as they would feel uncomfortable and judged. But everyone is saving the pennies and looking for ways to make money.

"People don't like going to pawn shops - with pawn shops, people know why you are there," says Pearson. "You're there because you need the money.

"But in a pub it's a social environment where everyone is having a good time."

He adds that the social aspect of gold parties in a pub takes away the inevitable "emotional side" of selling jewellery and other items that may bring up memories of other social occasions or loved ones.

It is common for people to want to sell jewellery bought by an ex-partner, for example. "People are looking through their jewellery boxes to bring things that they don't wear any more or that are broken," says Pearson.

The good news for the pub is that it receives 10 per cent of the money raised from the gold party. And if someone goes away and hosts their own gold party, the pub will get a further three per cent of the total sales from this too.

Pearson says his company is "transparent" about the fact that it will only pay 70 per cent of the true value of the gold, so that it can cover its costs. It uses the website www.kitco.com​ - a twice-daily updated gold price index - to value items brought to the party. A wireless laptop is brought to the pub so customers can benefit from up-to-date prices. Most of the gold brought to the gold parties is between nine and 12 to 16 carats, which is usual for the UK. But occasionally items made from Moroccan and Indian gold - which is purer, with between 22 and 24 carats - turn up.

The Ship - a freehold pub in London's West End - recently ran a gold party in its upstairs bar. Owner and licensee Frank Keane decided to host it after chatting to Pearson in his pub.

"He was in here one day doing some work and the pub was empty and I started talking to him," says Keane. "I said 'this is my pub, you seem a nice bloke, so we'll give it a go'."

Gold rush at the Ship

The Ship is open on weekdays only and many of the regulars are media types, drawn in from the Virgin offices, printing companies and BBC studios nearby.

"We are right in the centre of the West End - it's all shirts and trousers," says Keane. The pub has one real ale on, Bass, the downstairs bar seats around 80 people and the upstairs bar 70. Traditional pub grub is served from 11am to 3.30pm.

Keane was positive about the gold party. "It went very well. I have said if they want to do it again then we will," he says. "I got a couple of hundred quid, which was quite pleasant. A lot of my customers came along - and one of my best customers bought in his wife's jewellery and did a deal."

While the gold party was hosted on a Friday night, Keane said the next one will be held on a quieter night earlier on in the week to pull in more customers.

Isabel Todd, assistant manager of the Durrell Arms, describes her pub as a "dynamic" sort of place that hosts a lot of different events. The pub, in Parsons Green, London, is owned by Capital Pub Company. When the pub's backgammon club struck a deal with Cash for Gold, Todd and her team were happy to go along.

"Once a month we have a backgammon night and the organisers managed to get the night sponsored by Cash 4 Gold," says Todd.

Cash 4 Gold set up a table in the pub during the backgammon game and it was well received by customers. The only issue was that the pub hadn't advertised it, as it was organised separately by the backgammon club.

"Mostly customers wished they had had a really good dig around before they came here," adds Todd. "If it's something that we would do again we would need to make sure it was known beforehand."

Todd said the gold party could fit in well with other events the pub hosts. It could be part of a fundraiser, for example, for those who have lost loved ones in Iraq and Afghanistan. She added that it could also run alongside the quarterly parties the pub hosts for its local neighbours and businesses. "It does get you thinking," she says.