Iowa City convenience store branches out as gold-buying shop

IOWA CITY – At the I.C. Pit Stop, the clerk who rings up your gas purchase is also the dealer who may buy your gold ring.

“We buy gold!” proclaim two signs hanging next to beer and lottery advertisements in the windows of the convenience store/gas station, located at 300 Kirkwood Ave. about a mile south of downtown Iowa City.

Owner Mark Paterno of Iowa City said the gold-buying part of the business started last year, and every day or two the store gets a customer wanting to sell an item.

“A lot of rings, a lot of broken rings, broken earrings - mismatched or like somebody loses an earring - ex-boyfriend jewelry, divorced men with their wedding bands,” he said. “A little bit of everything.”

Paterno said he has studied commodities, particularly gold, for years and first got the idea of putting a gold shop in a convenience store from a trade magazine. Then he saw one in Chicago.

But that setup is a new one for the people at the American Numismatic Association, a Colorado-based non-profit organization for the study and collection of currency.

“This is certainly the first convenience store we've heard of that buys gold,” said RyAnne Scott, library and communications director. “But over the past few years, because gold has been so high, we have seen an increase in the number of gold dealers.”

Specific numbers are not available, she said, because there is no regulatory body.

Gold is seen as one of the safest investments, and gold prices have shot up in recent years during the global economic crisis, hitting a record high of $1,900 an ounce last summer.

Scott said sellers should check the spot price, or current going rate, before accepting an offer because gold prices rise and fall frequently. She also said sellers should shop around to find the best deal.

In Iowa, gold buyers must have a scale that is licensed and inspected by the Weights and Measures Bureau of the Iowa Department of Agriculture and Land Stewardship. The I.C. Pit Stop and a dedicated gold-buying shop run by Paterno in Ankeny do not have certified scales that have been inspected, department spokesman Dustin Vande Hoef said. The bureau will contact Paterno, he said.

Violators usually are unaware of the requirements and the bureau focuses on educating them about the process and getting them licensed, Vande Hoef said. Penalties are reserved for businesses using inaccurate equipment, he said.

Paterno said he looked for licensing information before he started the shop and didn't find anything. He said he gets his scales from jewelry suppliers and believes they're accurate.

Store clerks have been trained to evaluate gold items, Paterno said. In a typical transaction, the clerk tests a piece to ensure it is real, weighs it, determines its purity and then makes an offer, he said.

Paterno has a varied business background - he's also a real estate agent and co-owns Marco's Taxis and a couple of downtown food vendors - so maybe it's not a big surprise he would meld a convenience store and gold-buying operation.

“I just gave it a go,” he said.