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The Blue Crew is going for the gold. Sears Holdings (Nasdaq: SHLD ) now offers shoppers the chance to trade their gold and silver jewelry for cash. Just like those late-night commercials urging you to mail in your grandmother's gold chain that was handed down from generation to generation, Sears and Kmart shoppers will be able to pick up an envelope at the stores' jewelry counter and mail in their family's precious metals for cash.
This isn't such an outlandish proposition. Gold has been hitting record levels in the wake of Greece's financial crisis. The euro is tanking, and if the European bailout doesn't hold, other countries may follow Greece into calamity. "In gold we trust" has become the motto of many traders these days. We may still see gold at $5,000 an ounce.
For Sears Holdings, the service might provide some padding, since it hasn't been faring too well against the onslaught of Wal-Mart Stores (NYSE: WMT ) and Best Buy (NYSE: BBY ) . While Kmart comps have shown surprising strength recently, the overall trend for the company is still down. Betting on gold becoming more valuable seems to be a pretty smart move, as does expecting customers to spend their newfound cash in Sears and Kmart stores.
Consumers who might be hesitant to mail their jewelry to some seemingly fly by-night operation advertised on TV would have no compunction about walking into a Sears store to pick up an envelope. And while EZCORP (Nasdaq: EZPW ) and First Cash Financial (Nasdaq: FCFS ) successfully run large chains of pawnshops across the country, there might be a stigma associated with hocking your goods there. Of course, at an EZMONEY or Cash America (NYSE: CSH ) pawnshop, you at least have the option of buying back the jewelry later on.
Sears is running the operation with Pro Gold Network, a gold and silver purchasing outfit with 30 years of experience. Consumers can pick up a mail-in kit which includes a postage-paid envelope, insured up to $750. If you don't like the price offered, you can get your heirlooms back, free of charge.
What's missing from the equation is Sears Holdings' cut. The company didn't spell out what its percentage is. This might be a profitable move for Sears Holdings, but the once-venerable retailer also takes a hit to its reputation. Sure, consumers might flock to their local Kmart to cash in their gold and silver. But being known as the neighborhood pawnshop is a long way from being America's retail icon, even if it does ultimately contribute to Sears' bottom line.