You can Google "cash for gold scam" to hear the horror stories, but basically here's how it works:
You go to their website or call and request a prepaid envelope.
Once you receive the envelope, you package your gold and send it off to them. Let's assume that your gold is really worth $200.
They receive it and appraise it, sending you a check for an amount they deem fair. Sometimes as low as 10% of the fair market value. In your case, $20.
You have a set amount of time (I believe 5-7 business days) to either accept this amount by cashing the check or returning it and requesting that they return your jewelry. Some people claim that this time starts from the date of issuance of the check, not the date you received it. Others report that their jewelry cannot be located, so they have no choice to accept the small payment.
Those who insist that they will not accept the small payment get a call from a "senior gold appraiser" who, upon further review, offers them a higher amount, sometimes double the original payment (the $20 magically becomes $40). People claiming to be former employees claim that they get a commission based on how little they can offer you to get you to agree.