By Catherine Blinder
This past holiday season was a wonderful opportunity to share gifts with friends and family. Now that the holidays have passed, however, the time has come to pay some of those bills!
One way to find a little extra income is to sell some of your old gold jewelry. While a seemingly small amount can be worth quite a bit – there are some things to consider that will ensure you get the most for your valuables.
There are three key factors in determining how much money you should receive for your gold:
- the karat
- the weight
- the rate that is being paid
First and foremost, you should work with a reputable, licensed dealer to determine how much you can expect to receive for your gold. While laws about the purchase of gold and other precious metals are set by the state, the licenses are actually issued by the local police department. With the value of gold so high, many businesses have jumped into the market, such as jewelry stores, pawn shops and even home “parties.” Before entering any transaction, it can be helpful to see if family members and friends have had any experiences, good or bad, with any businesses. Once you identify a potential dealer, ask to see their license, and check with the police to see if they have any record of poor business practices.
Once you select a dealer, they will examine your jewelry and determine a price. First, they’ll determine the karat. Essentially, this is how much gold is in the metal. Most jewelry is not 100% gold, also known as 24 karat, because gold is a very soft metal. To strengthen it, other metals are mixed in, reducing the karat. An 18k bracelet indicates that it is actually 75% gold (18 out of 24 karats). Items like large rings may be as low as 10k, as they need to be sturdy.
Don’t be surprised if the dealer does not trust the labeling on your gold, testing it using a variety of methods. They may tell you that it is a lower karat than marked or only gold plated. Gold, like many other products, is subject to fraud and could have been mismarked when it was originally sold. If you are uncomfortable with their assessment of your items, don’t hesitate to get a second opinion.
After determining the karat of your gold, the dealer will then weigh it. Gold is measured in Troy ounces, with one Troy ounce equaling 31.1 grams. If you’re selling multiple items, they will likely weigh the different karats separately – all the 18k, then all the 14k, etc., as each karat is worth a different rate based on the amount of gold. This is another step where there could be some discrepancy. While a dealer may not intentionally be giving you an inaccurate measurement, they may be working with a scale that is not properly calibrated. Feel free to ask to see the scale’s certification, as sealed by the State’s Department of Consumer Protection. Once again, don’t feel pressured to accept a weight that you do not believe is true – you can always take it to another dealer for comparison.
Finally, with both karat and weight agreed upon, the dealer will propose a payout, based on that day’s rate. The price per Troy ounce will be based on the daily international price, which is used as a reference for gold sales around the world. The value of gold changes frequently and significantly, down more than 30 percent from its historic highs three years ago. So waiting for the right price – if you have that luxury – can pay off; of course, the price could always go down as well, as the trend has been over the past few years. As with any shopping you do, this is an area where you can and should shop around for the best price.
One more note of caution: by state law, dealers are not allowed to pay you in cash – it will most likely be a check. This was implemented to create a paper trail, which allows the police to track down the seller if they determine a dealer has purchased stolen property. Payment by check also provides you with a proof of the sale. The fact that you are likely to be paid by check instead of cash, however, is another reason to make sure you do your homework before selling your gold or other jewelry and are comfortable with the business with which you are working.
In the end, it’s not all about the money. You may find that when weighing the offer against any sentimental value of the jewelry, you end up wanting to just hang on to it as a keepsake. It’s impossible to put a value on our memories.
This article was written by Catherine Blinder, chief education and outreach officer of the Department of Consumer Protection of the State of Connecticut. To learn more about how the Department of Consumer Protection can help, visit us online at www.ct.gov/dcp.