The recent increase in the price of gold, coupled with a troubled economy, has many people considering selling their gold jewelry as a way to get some cash. With so many companies offering to buy gold and so many alternative types of buyers, what is the best way to be sure to receive the most cash for gold jewelry? The key is to do the required research and to be well informed.
The first step is to determine whether the items will be sold as jewelry or as scrap gold. This is crucial, because, while scrap gold has value, jewelry has more. The majority of the price paid for jewelry is for the workmanship that goes into it. A piece of jewelry needs to be in good shape or needs to be unique in some way for it to fetch a high price. This is especially so in a bad economy, as many people are holding off on buying luxury items. If it is to be sold as scrap gold, the condition and uniqueness don’t matter, as the buyer is simply buying the gold contained in the item to refine and reuse. Brand new or broken, scrap gold all fetches the same price, figured by purity (karats) and weight.
How can it be determined whether an item can be sold at a premium, as jewelry? Looking at the item without any sentimentality, try to determine its appeal to a stranger. The fact that it was bought in an exotic land or was given by a favorite relative probably won’t mean anything to most potential buyers. Try to establish if it is desirable to a buyer with no sentimental attachment. This can be difficult, since jewelry, especially gold, often comes with an intense emotional attachment. If the piece is of exceptional quality, is unusual or is an antique, it would be good to have it appraised by a jeweler. Better still, by two or three jewelers. If all indicate that it is an exceptional piece, get offers to buy from them. Remember that they will be looking to make a profit on the resale, so the offers may vary or may be lower than hoped for.
If an acceptable offer is received, it might be good to accept it. If not, another alternative would be to try to sell it outright. Some alternatives might be classified ads or sites like Craigslist or an auction or site like eBay. Each of these involves time and expense, so those costs need to be weighed against the additional profit that could possibly be made beyond the jeweler’s offer. It may well be that the additional work or risk might not be enough to justify holding out for more than a jeweler would offer.
If the consensus is that the items are not in good enough shape or unique enough to be sold as jewelry, selling the gold for scrap value is another alternative. Even broken, ugly and out-of-date pieces made out of gold have intrinsic value. Scrap gold buyers come in many shapes and sizes, and each type has a different way of doing business, so the amounts offered by various buyers can vary wildly. Again, enough research to make an informed decision is crucial. Following is a list of some of the more common types of gold buyers.
Some jewelers buy scrap gold, especially in tough economic times when their principle business slows. However, jewelers tend to have high overhead and high markups, sometimes in the hundreds of percents. This may lead to a reciprocally low offer on what they will pay for scrap gold.
Many pawn shops now buy scrap gold. The main business of pawn shops is to make short-term loans, using valuables as collateral. A general rule of thumb is that a pawnshop will often offer one third of the amount they can expect an item to sell for. This mindset may also carry over into their offer for scrap gold.
Internet gold buyers promise cash payouts with a minimum of effort. However, unless there is no access to any other gold buyer, this is probably the least profitable option. In November of 2009, Consumer Reports investigated cash for gold buyers on the Internet and found that they generally paid only 11% to 29% of the actual value of the gold received. Traditional local gold buyers, on the other hand, paid between 35% and 70%. It is generally accepted that 50% is a reasonable minimum expectation.
Another alternative is a local company that specializes in recycling scrap gold. Like their Internet counterparts, this is their principle business. The difference, however, is that they usually meet with clients and will often explain or justify their offer, which tends to be higher than the Internet businesses.
It is possible to receive a good price for old or unwanted jewelry. The key is to exercise caution, do the research and be informed. That extra effort may mean substantially more cash for old gold jewelry.