Skeletoncrew (skeletoncrew) wrote in damnportlanders,

The more you know...Selling your gold and not getting ripped off

A week or so ago someone posted in DP looking for the best place to sell gold. My input was a little late but it did prod me to finish writing up my gold-selling guide. This will probably bore you to tears if you're not interested in it or already know all about gold.

Just so you know where I'm coming from in writing this, I'm an artist with a background in non-ferrous (non-iron) metalwork. I started making silver jewelry in high school, ran an online retail silver business for a few years after high school, worked in a family jewelry store, a jewelry department of a major retailer, and attended college to further my metals skills. As things often go, I'm now doing almost nothing with those skills because I was seduced by a different medium in my last years of school. But I still know silver and gold, and I still like to get a good deal, so when it came time to clean up the scraps I'd been saving, I started noticing those "get cash for your gold," ads. When I looked at their websites I didn't like what I found. Many are banking on glitz and hype to get your gold for a pitance because you're either desperate, or simply don't know what you have. You will need a few tools to help protect yourself from unscrupulous buyers, but nothing too exotic. Mostly you just need a little time to research the rates buyers are offering. Hopefully this information will help you get the most value from what you have, I've tried to anticipate what pitfalls you may encounter in this process and address them.

If you watch TV you've probably seen a number of ads exhorting you to mail in your old jewelry and coins for cash. The "satisfied customers" crow about how they had no idea their old jewelry was worth so much, and wave wads of money at the camera. You're reassured that the entire process is safe, easy, and you'll be getting cash within 24 hours (of their processing your jewelry). It is a tempting proposal, you just clean out the jewelry drawer, pop it in the pre-paid envelope, and get more money than you could have imagined! Do people really have no idea how much their jewelry is worth? Maybe I didn't date enough to be showered with gifts of jewelry to the extent that I have no idea of its value, but I digress.

The reality is, if you have any idea what you paid for your gold and silver jewelry, you will probably be disappointed with how much these companies will pay for your pieces. Jewelry in the United States is only an "investment" in as much as it is gorgeous and can last through generations. If you're buying art jewelry pieces it may retain value as such, but for the most part the value of craftsmanship goes right out the window when it comes to re-selling jewelry. I hope you've been buying your jewelry based on the fact that you love it, and not out of some notion that you'll be able to turn a profit on it. (The exception to this rule is high karat gold jewelry from countries such as India. In many cultures gold jewelry is the traditional method for carrying wealth. This jewelry is often quite intricate and sold by the gram. The value of labor and artistry of the pieces is a small portion of the price compared to the actual gold value.)

So you're selling your gold jewelry for scrap and you don't want to be ripped off. You're not looking to trade in for new jewelry, you want money. You've got some chains, earrings, maybe a couple rings with a few tiny diamonds and some other gems, nothing antique or extraordinary. No three carat flawless diamonds, or monster ruby necklaces, because if you have those you should be looking for auction houses or high-end jewelers to buy from you. I also don't recommend selling coins for melt value. Chances are a coin shop will give you added value based on the condition and type of coin.

Start analyzing what you have with the stones. Gems are a wild card. Grading stones is an exacting process and gemologists train for years to learn the differences between junk and treasure. If you've purchased a large diamond piece, you probably received at least a basic grading report and this may be useful in re-selling the diamond. If you're not certain whether your gems are unique or very fine, talk to a local jeweler. Don't expect a free detailed appraisal, but inquire whether the gems would be worth putting in a new setting. In my experience most jewelers will honestly tell you if something isn't worth the effort. Check your gut, talk to more than one jeweler if you can.

Now, the sad truth about selling jewelry with gems, you're probably going to get next to nothing in value from the stones. Scrap buyers just aren't very interested in them. It takes some effort to remove them from the settings, and tiny common quality gems simply aren't going to make them much money. If you can't stomach the idea of not being paid for the stones, you may wish to remove them first and try selling them separately. Please note, gems (even diamonds) can be scratched or broken during removal from settings, use caution if you are doing this yourself. Inlaid stone may be virtually impossible to remove, and I personally wouldn't bother. Just remember to mentally round down the weight when you're estimating the worth of your jewelry.

As for the gold, if you're not sure what karat it is, look for the stamp on the inside or back of the piece. You should find a logo or manufacturer's initials plus something like: 14k or 18k
Less commonly, karat percentages may be written out like: 585 or 750

If these numbers are followed by "GF" (goldfill) or "vermeil" your item is not solid gold and may have little value. If you cannot find any stamp, try again with a magnifying glass (or a sharper set of eyes). Gold stamps can be quite tiny and well-hidden, sometimes even squeezed onto earring posts. If you really can't find a stamp (they're particularly prone to wearing off rings), you'll need to have a professional verify gold content.

Those stamped numbers stamped indicate the percentage of gold present in the item. Pure gold is 24k, and isn't typically used in jewelry. The most common karats in the USA are 10k,14k, and 18k, so my examples will focus on them.

10k = 41.7% gold
14k = 58.3% gold (note this is often stamped as 585 or 583)
18k = 75% gold

To find out the gold percentage of any other karat you may have, simply divide that karat weight by 24, then multiply by 100. For example , if you have 12k gold:

12 ÷ 24 = .50
.50 x 100 = 50%

Now that you know what percentage of actual gold is in your jewelry, you need to weigh it. Troy ounces are the standard unit of measurement for bullion metals, but we don't use them for measuring much else in the USA. (Those ounces at the grocery store are avoirdupois and not equivalent to troy.) One troy ounce = 20 pennyweights (dtw), or 31.1 grams (g).

If you have access to a jeweler's scale, fantastic! Weigh your jewelry in pennyweights or troy ounces . Otherwise, your best bet is a postal scale or kitchen scale that can measure in grams. I'm going to use grams in my examples on the assumption that this is the most likely unit you'll be starting with

If you want to be really particular about what each piece of jewelry is worth, weigh your items individually; otherwise simply separate your items by karat. Note, gold color will not affect the value of the metal, 18k will always be 75% gold whether it is yellow, white, or rose colored. Weigh your pieces, and record the weight in grams. Organize this in whatever way you feel most comfortable, just be sure to keep the weight and karat numbers together.

Here's a hypothetical lot based on some jewelry I sold:

10k (baguette style ring, post earrings)

14k (thin rope chain bracelet, 2 women's rings, a few post earrings and a pendant):

18k (two dainty women's rings)

Now remember, the weights above are the total weight, not the weight of the gold content. This is where karat comes into play, multiply the karat percentage by the weight

10k 2.36g x .417 = .98g of gold

14k 6.22g x .583 = 6.46g of gold

18k 4.28g x .750 = 3.21g of gold

Total that up and you've got 10.65 grams of gold! It is now time to look up the market price, but remember, it is quoted in troy ounces. Convert your gram weight into troy ounces:

10.65 ÷ 31.1 = .342 troy ounces

So the example jewelry adds up to a grand total of just over 1/3rd of an ounce. How much is that worth? The answer varies from day to day. You now need the spot price of gold. I usually go to , but any number of sites (especially those wanting you to buy bullion coins) display current gold price information. As I write this gold is $947.60 an ounce.

This part at least is simple, take your total in troy ounces, and multiply it by that spot price.

.342ozt x $947.60 = $324.08

This is the total scrap worth of the jewelry. Nothing near what would have been paid for it (unless it was all purchased years ago when the gold market was much lower), but I already warned you about that. Remember also, if you have more than a few tiny gems in this jewelry, you should mentally adjust the weight down a bit.

Now you have the basic information you need to not get ripped off when you sell your gold. That said, this is not the price you're going to get. Whoever is buying your gold needs to have some profit from the transaction. They're not going to pay full price and sit on the gold hoping the spot price will go up. They've got to cover their processing, refining, and other expenses. Speaking of expenses, those commercials full of happy actors cost an awful lot of money. Those special "refiners packs" aren't free either.

Funny thing about that, I was going to check the company I see advertising the most and break down the prices they're paying for you, but they don't have their buy prices posted right now. When I was shopping around a few months ago I found they were paying about 60% of spot price. I call that a rip-off.

Looking over their flashy site today I can't find one bit of information about what they pay for gold. There are an awful lot of warnings about how the gold content of your jewelry may be less than the stamp claims. While it is true that fraud happens (Is your jeweler "some guy" who hangs out at the corner?), they do seem to be setting you up to not be surprised if they give you a lower number than you expect.

If the gold buyer you're checking out isn't giving any information about the price they pay before you send your items, I wouldn't recommend doing business with them. Yes, they can't tell you what your items are worth sight unseen, but they can tell you what they pay for a unit (gram, pennyweight, ounce) of gold.

The best information you can get from a buyer is "I pay X% on spot price." That tells you right off the bat whether they're going to pay you enough. My personal thoughts on percentages:

Anything under 65% = rip-off
65% = take it if you're desperate, tends to be the average readily attainable price
75% = not bad, but keep looking if you've got some time
85% = not too shabby
90+% = good deal for you

So what if they're not keen on telling you the percentage? Most websites will obscure the rate they pay in charts showing how much they pay per unit of karat gold, but now that you understand how karat translates into percentages, you can analyze what you're being offered. Some make a big show of demonstrating that they'll pay more the more you send them, but the reality is you probably don't have 10oz of gold to sell so that extra dollar or two per gram don't mean anything to you. These charts are also completely useless if they don't include the spot price the chart is based on. I've yet to see a "price we pay" chart that is live (i.e. changes automatically with the gold market). Another key factor in reading these charts is the unit of weight measurement. Some are in grams, some in pennyweights, and some display both. Here's an example of one I just found

"Prices we pay, based on gold at $954/oz"
10k per gram $9.81
14k per gram $13.73
18k per gram $17.90
As you recall from above one ounce = 31.1grams so multiple that by the gram price:

10k at $9.81/g = $305.09 per ounce
14k at $13.73/g = $427.00 per ounce
18k at 17.90/g = $556.70 per ounce

So that tells you something, but you really want to know how this price compares to the spot price of pure gold. At this point, I break down the spot price quoted (in this example $954/oz) to match the karats:

10k is 41.7% gold, so one ounce of it contains $397.82 worth of gold
14k is 58.3% gold, so one ounce of it contains $556.18 worth of gold
18k is 75.0% gold, so one ounce of it contains $715.50 worth of gold

Percentage of spot price they are offering you:

10k $305.09 ÷ $397.82 = .767 or 76.7%
14k $427.00 ÷ $556.18 = .767 or 76.6%
18k $556.70 ÷ $715.50 = .778 or 77.8%

This example falls soundly into my "not bad" realm. I'd much rather they'd just given the percentages so we don't have to go through all the math. But that's the modus operandi of online buyers. They're banking on you not knowing how to verify their rates, or not being willing to go through the effort. When I sold my gold, I did a little searching to see if I could find bad reviews on the company, and I called to verify their rate, they paid me 96% on spot price. I don't think I could have found better.

A few other details to keep in mind if you mail your gold to a buyer. They'll send you a contract (mine was e-mailed as a PDF) with an inventory sheet that will need to be sent to them with the metal. Filling it out in detail will help protect you. They should pay the shipping, either through an envelope they send you, or by giving you all the information you need to ship it on their account with a major carrier such as FedEx or UPS. In my case all I had to do was go to a Kinko's/Fedex, pick up a free overnight envelope, and fill out the form.

Once they receive the envelope they'll weigh and test the contents, then call you with an offer. If you've weighed everything in advance, you should be able to easily tell if something is wrong. The gold market doesn't typically jump or drop enormous amounts in a day or two, but be aware of how it has changed since you estimated the worth of your lot. You might get lucky and the market will jump a bit. Remember also if you had stones in the jewelry, the weight of them doesn't count towards your gold weight.

At this point you need to do a gut check, ask questions if you need to, then either accept or refuse the offer. You will then be paid by means you've probably already selected when you filled out that contract. I personally chose a check because it was free, I was willing to wait a week for it to arrive, and I trusted the company I chose. If you opt for a wiring service or Paypal, you will receive less money because these services aren't free. You could say that's the whole theme of this process, faster = less money for you.

You can use this information to find the best deal locally as well. Many jewelers buy scrap, as do bullion coin dealers, and pawn shops. Arm yourself with your own estimate before you visit before you visit them. I'd recommend breaking the numbers down and making a cheat sheet to check when they make their offer. Include what 65%, 75%, 85%, and 95% would be. Decide in advance what you're willing to accept, and be sure you understand the offer being made.

One last note for those of you with silver jewelry: Same rules apply regarding antiques and exceptional jewelry, though silver has relatively little value compared to gold. $14.71 per ounce right now, versus $947.60 an ounce. Dealers are not as interested in buying it because it is more work for less money, and they won't pay to ship it. The best rate I found was 80% with the gold buyer I used, and the most common rate was 65%. Assuming that 65% rate with silver currently $14.71, you'd $9.56 an oz cash value for silver jewelry.

For a basic example, I've weighed an 18" narrow figaro chain, original price probably in the $10-20 range. It comes in at 3g, so roughly 1/10th of an oz. Melt value is less than a dollar. If your silver jewelry is in good condition you could probably do better having a garage sale.
Whatever you chose to do with your jewelry, good luck!
Tags: psa
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