Should cash-for-gold businesses be considered secondhand stores, jewelry shops or, perhaps, recycling facilities?
Confounded by the newly popular business model, Carson leaders have put a temporary halt on any new such stores while city planners try to define what they are and where they belong.
"Cash-for-gold stores don't fit neatly into any established category," City Attorney Bill Wynder said. "Which is yet another reason why the city ought to study how to best regulate, license and entitle these kinds of business entities. They're not a store in the sense that they have new or used products for sale, and yet they engage in business and trade."
The price of gold has shot up every year since 2008, as the nationwide recession left many without reliable incomes. Entrepreneurs seized the opportunity to make quick money, and cash-for-gold stores have proliferated in the South Bay and across the country.
The possibility for fast cash has attracted more than just people with stashes of old, unworn jewelry. Opportunistic thieves and robbers increasingly snatched necklaces from people walking outside.
In California, cash-for-gold businesses are required to register with the state, undergo background checks and report all of their purchases to law enforcement agencies in case the merchandise was stolen. But cities have grappled with whether they cause an increase in crime, and where these businesses would be most appropriate.
Cities that decided to regulate such businesses have differed on what they are, according to a review by the League of California Cities. Colton, San Leandro, Hawaiian Gardens, Glendora and others consider them akin to pawn shops and thrift stores, while Livermore calls them recycling facilities. In Los Gatos, they are considered regular retail stores.
The Carson City Council voted on Nov. 20 to put a moratorium on any new cash-for-gold stores through Jan. 4. A bid to extend that for a full year was shot down this week, as some council members worried about sending a message that the city was not business friendly.
But the city's Planning Commission was asked on Tuesday to craft regulations for buyers of used gold and present them to the council so the Municipal Code can be updated. Currently, nothing in the code addresses such businesses.
"Carson is my Beverly Hills," said Councilwoman Lula Davis-Holmes, who introduced the motion to temporarily put a stop to new cash-for-gold stores. "There are 11 gold shops in this city and we need to come up with new guidelines."
The city actually has six active cash-for-gold stores - down from 12 that have active business licenses but are now closed, according to a staff report.
The city staff and Planning Commission were asked to return to the council with suggested ways to regulate cash-for-gold stores. Though the moratorium was not extended past Jan. 4, the council's three-member majority expressed a strong desire to change city code to restrict the businesses.
Some residents opposed making such changes on Tuesday, as the council discussed an extended moratorium.
"I drove down Hawthorne Boulevard within the fine city of Torrance between Torrance and Lomita boulevards, and saw four cash-for-gold stores that weren't there a year ago," resident Paul Randall said. "Torrance is welcoming them. We're supposed to be a business-friendly city. What are we trying to do - go out of business?"
Mayor Jim Dear and Councilman Elito Santarina also opposed any regulation.
"These businesses are here because of the natural processes of capitalism," Dear said. "I'll be watching this very closely, and when staff comes up with recommendations that really do put people out of business, I'm going to remark back and say, `See, I told you."'
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