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Selling Scrap Gold for Cash? Watch Out for Scam Offers That Don't Give You Fair Value
If you have scrap gold you're trying to unload for cash, you may consider selling to pawn shops, local gold refiners, and even to buyers by mail order. A real concern is the legitimacy of the buyer. If you're not worried about outright scams, at the very least you want to be sure you get the maximum possible value for your gold. Learn how to wisely sell gold scrap to dealers, how to calculate what it's worth, what resources are available to you, and how to weigh the convenience of quick cash against the security of doing your research.
What is Scrap Gold Recovery?
Gold scrap recovery is taking dental scrap gold, gold scrap jewelry, gold wire, gold parts from electronics, or other forms of gold scrap and selling it to scrap gold dealers or refiners who then melt it down and resell it for use either in bullion or in the industrial or ornamental markets once again.
Gold has been valued over the years because it is not just beautiful, but useful, too. As an inert precious metal, gold ends up in electronics, dental applications, and so much more.
If you found yourself saying, "You know what? Maybe I should sell my old jewelry!" you're not alone by any means. Gold is possibly the "greenest" precious metal there is, since recycling gold has a long history: due to its value, people have been recovering gold for as long as they have been using it.
Research Before You Sell
First and foremost, always check with the Better Business Bureau and the FTC (in the U.S.) to see if the gold scrap buyer has lots of unresolved complaints. This is your first line of defense against gold scrap buyers that might blatantly scam their customers.
Know Its Dollar Worth When You Sell Scrap Gold
Next, make sure you know the value of your gold. When you estimate the price of gold scrap, only include the gold that is worth more when melted down than in its current form.
Divide the scrap gold into two piles: gold that has more value resold in its manufactured form, and gold that is worth more when melted down. Depending on what you have, gold coins and authentic heirloom jewelry may be more valuable as collectible or beautiful objects, while newer gold jewelry, dental gold, or gold from computer motherboards or other electronics may net you more cash if sold to gold refiners.
Determining whether you can get more value for gold as scrap or as collectible or fine objects can be difficult, because it depends on many things. Some factors include
- how much time or expertise it takes to research the provenance of your gold (that is, how well documented its history is)
- how much gold you have
- your access to reputable buyers of fine gold objects, collectible gold coins, and scrap gold.
To find the value of the scrap gold you decide to sell, weigh the gold on a gram scale and calculate the scrap gold price per ounce or gram or pennyweight to figure out the value of the gold scrap if you were selling it on the open market.
When weighing the gold, be sure you are weighing the same karats together - gold marked 10k with 10 karat gold only, 14k with 14 karat gold only, 18k with 18 karat gold only, and 24k with 24 karat gold only. Leave out gold that is plated.
Know Generally How Much You Should Be Getting
Before you begin the actual transaction, determine how much cash you can reasonably expect to get for the gold. Be realistic. The best price you can get may not be the full current price of gold - not unless you melt your own gold scrap and sell it on the open market. Expect the refiner or buyer to take their percentage cut.
Depending on how much supply and demand there currently is for scrap gold, it's reasonable to expect to be offered 50 percent to 80 percent of the market value of gold. For example, when the price of gold is high, but the supply of gold scrap is low, you'll be offered a greater percentage, whereas if the price of gold is low, and the supply of scrap gold is high, you'll be offered less. But once again, the percentage you're offered and whether or not it's a "good price" depends on many factors, including what's going on with the gold market, how quickly you need cash, the proximity of the gold refiner, and how much you're willing to pay for convenience.
If the buyer does not disclose the markup amount or the percentage of the gold price offered is not satisfactory to you, then be suspicious...and comparison shop. Compare buyers by asking them what percentage of the value of gold they are offering you, not just how much money. The amount may seem smaller than you expect, or it may seem higher, but the only way to tell is to figure out what your gold is worth before you start the process of selling gold scrap.
Lastly, ask to see all documentation and read the fine print. Ask if there is a handling fee charged for small lots - consider it cause for concern if the dealer isn't up-front about any fees. If you are mailing in your gold, make sure you read their terms so you know how long you're agreeing to let them hold your gold if you don't accept their offer. If you encounter any problems, file a complaint with the Federal Trade Commission.
Read the Fine Print
Finally, if you use an online dealer, note all the fine print. Know what you're getting into before you commit to selling, and you lessen your chances of getting scammed.
To Sell Scrap Gold...Or To Invest in Gold?
If the current gold price happens to be low when you decide you want to sell your scrap gold, it may be worth it to save that scrap until the price of gold rises, or even to set off for yard sales or estate sales to buy scrap gold for your own collection...and then sell it while it's hot. Investing in gold tends to be one of the most practical investments there are. Because of gold's disinclination to lose value in any volatile way during a recession or depression, gold investment is considered recession-proof, at least to the degree that any investment is a hedge against loss.