Don't Get Stuck With Fool's Gold

Before you go for the gold this holiday season, you should know what you're paying for.

A CBS News investigation found that a high percentage of gold jewelry, especially 10-karat charms, aren't 10 karat at all. It's called under-karating.

We went undercover shopping at mom and pop stores and big name retailers. Of the 25 pieces we bought, nearly a third didn't meet the gold standard, which doesn't come as a real surprise to jewelry watchdog groups, reports CBS News Correspondent Cynthia Bowers.

"Every time a consumer buys one of these little charms and some of the gold is missing, a consumer's had his pockets picked," said Cecilia Gardner, who heads the Jewelers Vigilance Committee.

Gardner said she's found under-karat gold in a number of states, including New York.

"Much of what was being sold as 10-K gold was not in fact 10-K gold," said New York State Attorney General Eliot Spitzer.

Spitzer recently netted 24 jewelry companies defrauding, primarily, lower income shoppers.

Detecting under-karating is easier than it used to be when the only way to measure the gold in jewelry was to melt it down. But today's high tech x-ray machine is able to measure karat level with no damage done.

Take the Mickey Mouse and Winnie the Pooh charms we bought in Minneapolis. The machine scored them closer to eight karats than 10.

"It is a pretty yellow metal, but it's not gold. At least under the law," said Celia Gardner

When we told store owner Ginny Choi about their failing grades, she stopped selling them.

"I am a victim in this matter, same as my customer," she said.

Choi said she trusted her supplier and trusted the 10K stamp on Mickey Mouse. Now she worries customers won't trust her.

"This is a real bad situation for me," Choi said.

In the jewelry world, a good name is as good as gold. But how is a consumer to know if a purchase is on the money? The best clue may be on the back of the piece. Under the law, if jewelry has a karat stamp, it must also have a trademark, so any problems can be traced back to the manufacturer.

The Mickey and Winnie charm pieces were missing trademarks as well as gold.

So was a charm bought in another Minneapolis store, short a full karat. Same with a charm bought in a Chicago shop and ditto for another Mickey charm we found in a Chicago flea market.

You might wonder why so many Disney character charms tested closer to fool's gold than real gold. They weren't real Disney. Just knockoffs.

If you're not careful this holiday season, you could end up with fool's gold instead of real gold.