Selling Gold for Holiday Green?

With prices for gold and silver escalating in recent years, there has been no shortage of opportunities to sell old jewelry. A flurry of advertisements makes it seem easy. What these advertisers fail to mention is that you could lose a lot of money by not being an informed seller.

If you decide to sell your jewelry precious metals to one of these buyers, do your homework.  Research precious metal prices before you sell and then do business only with a properly licensed individual. The measuring and transaction process may occur quickly. Rather than accepting the first offer, it can be helpful to let the buyer know you intend to shop your property around. If you choose to go elsewhere, get a written estimate detailing the items and their worth. 

Although metal quality (e.g. 18 karat gold vs. 22 karat gold) is used during the evaluation, the main deciding factor is usually the weight of the material so there will be a scale present. Here are some basic recommendations:

  • Make sure you can see the scale indications.
  • The scale must register zero before any weighing begins.  It may read “behind” zero or show a negative value if a container will be used to hold material to be weighed.  The scale must read zero when this empty container is on the scale to ensure accurate measurement of you property.
  • Is the scale level and on a stable surface?
  • Do not allow weighing if the scale indications are fluctuating; this may be caused by air currents (e.g. heating and ventilation, open windows or doors) and will cause inaccuracies.
  • Does the scale have a seal from a county weights and measures official showing it has been inspected and tested?
  • Does it weigh in grams, troy ounces, or pennyweights?

Knowledge of conversion values is important to prevent inaccurate final payment for your property:

  • 1 gram = 0.6430149 pennyweights or 0.03215075 troy ounces
  • 1 pennyweight = 1.55517384 grams or 0.05 troy ounces
  • 1 troy ounce = 31.1034768 grams or 20 pennyweights

If these conversion factors are truncated or used incorrectly, you could receive less money for your property than you are due.

The following are some of the deceptive or illegal practices that dishonest buyers may use to affect the price being offered:

  • Failure to show the seller the weight indications on the scale
  • Improper rounding of the weight indications
  • Using or subtracting an incorrect weight for the container holding the material on the scale
  • Incorrectly converting between units of measure. (e.g., grams to pennyweights or troy ounces)
  • Misrepresenting the precious metal quality (e.g., 18 karat gold vs. 22 karat gold) during the evaluation

Buyers often weigh jewelry with precious or semiprecious stones to determine to total weight of the piece.  This practice is not illegal if a price is determined for the whole piece.  What is illegal is the practice of estimating the weight of the stones and deducting it to figure the weight of the metal content.

If you decide to sell your property you have the legal right to request what is known as a weighmaster’s certificate and the buyer must comply.  This must list such things as date and place of the transaction, identification of the items sold, details of the weighing and unit used, name and signature of the buyer. 

If you suspect deceptive or illegal practices during the transaction, make sure to notify your local county weights and measures office or contact the California Department of Food and Agriculture, Division of Measurement Standards, Weighmaster Enforcement Branch, (916) 229-3000.

Licenses and Permits

Anyone who buys precious metals or coins must meet certain legal requirements and have the proper licenses and permits to operate.

 Businesses loaning money for jewelry or precious metals must have a pawnbroker’s license issued by the California Department of Justice. California Finance Code, Division 8 Pawnbrokers, Chapter 3 Licensure, Sections 21300-21307.  They must notify local law enforcement of their intent to conduct business.

  • Any gold show or jewelry shop purchasing jewelry, coins, watches, precious metal items (not scrap) is required to have a license issued under California Business and Professions Code Division 8, Special Business Regulations, Chapter 9, Secondhand Goods, Sections 21625-21647.
  • Persons who buy non-ferrous scrap metal, which include gold, silver and other precious metals, must be licensed as a weighmaster.  California Business and Professions Code Division 5, Sections 12700 and 12733 define what a weighmaster is and who is required to have a license.

 A weighmaster must do the following:

  • Use only suitable and legal for trade scales for the transaction.
  • Use only scales that have been tested and sealed in by a county weights and measures official. 
  • Ensure that the scale is installed in level position on a stable surface.
  • Issue a weighmaster certificate listing the scale measurements unless the scales are positioned so both the buyer and the seller can read the weight
  • Issue a weighmaster certificate if requested by the seller.

More information from CDFA’s Division of Measurement Standards is available online at http://www.cdfa.ca.gov/dms/

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One Response to Selling Gold for Holiday Green?

  1. jeroen says:

    This is very helpful! I’d like to add that if you go online or send your gold/silver jewelry via mail, you have to be even more careful. Always make sure you deal with a reputable, well-known company. Look for things like a BBB (Better Business Bureau rating – preferably A+), but then make sure you actually look up their rating on the BBB website! There are a lot of scammers out there that just copy and paste pictures to make it look as if they are legitimate.

    Anyways, thought I’d add that. Thanks for sharing!

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