An internet pawnbroker is taking on Tesco after the supermarket slashed the price it is paying shoppers for their old gold.

Tesco controversially launched its used-gold service, Tesco Gold Exchange, in January with a buying price of £10 per gram for 9ct gold.

The price has since plunged by nearly 20% to £8.25. This has enabled to promise to pay 10% more than Tesco.

"We will better the price Tesco offers by 10%," confirmed Kerry Patton, head of marketing at "It is a clear and straightforward promotion."

Despite going head to head with a retailer, Patton welcomed Tesco's arrival into the market, which she claimed was driven by the price of gold hitting an all-time high.

"The postal gold industry was tarnished by Office of Fair Trading investigations last year," she said.

"The addition of a well-recognised household name like Tesco will be welcomed by consumers and make it seem safer to sell gold to a postal gold buyer."