Selling gold for cash remains a popular practice among consumers. Pawnbrokers reported a three to five percent increase in overall gold-based business. Selling gold through a pawnbroker or precious metals dealer can be a convenient way to turn gold into cash quickly and easily, but it can also be risky. To avoid getting short-changed, follow these six tips:
- Comparison shop
When looking for a place to sell your gold, start local and in-person before branching into the online market. Take your gold to a local pawn shop or precious metals dealer and ask for a valuation. Then take it to another pawn shop or precious metals dealer, and another. Experts with the National Pawnbrokers Association advise aiming for three to four estimates from varying stores.
- Watch the scale
The accuracy of jewelers, pawnshop, and precious metals dealer’s scales is periodically verified by the department of weights and measures. The same can’t necessarily be said for hotel or house party buyers (more on house parties and hotel buyers in the next bullet points). Regardless of who and where you ultimately decide to sell your gold, pay attention to how its being measured. Jewelers use a measurement called the Troy, which equals 31.1 grams as opposed to the ordinary ounce of 28 grams. Some buyers may pay according to the gram, but others may prefer a pennyweight, which is equivalent to 1.555 grams.
Very important: Ensure you aren’t being weighed by the pennyweight then paid by the gram. A buyer could con you into taking less money for your gold by doing so.
- Don’t join the party
Gold parties, where friends or neighbors get together to sell their gold in a friendly, home environment became popular in the past five years. This can seem like a convenient and perhaps fun way of selling gold, but BBB experts advise against it. The reason: not all gold is made alike.
Everyone probably knows gold is measured in karats, but what exactly is a karat? Think of gold as being represented by a pie with 24 slices. Each slice of the pie represents one karat. A 10 karat necklace, then, would have half the gold (or half as man slices of pie) as a 24 karat necklace. It makes sense, therefore, why pure, 24 karat, or 24k, gold is considered more valuable than other gold. Hopefully it also makes sense why throwing your 24k bracelet into the same pot as someone else’s 10k engagement rings would lower the overall sale value of your jewelry when you take it to a precious metals dealer.
- Beware the hotel buyer
Hotel buyers, also known as pop-up buyers, are essentially passers-through who come into a city, set up a temporary (or pop-up) shop in a place like a hotel ballroom, and run advertisements promising great rates to draw in business. After collecting all the valuables they can get, they’ll disappear as fast as they appeared – – often leaving sellers underpaid or not paid at all. It’s always a good practice to check with the BBB before selling to any potential buyers, be they a hotel buyer or legitimate precious metals dealer.
- Verify credentials
Legitimate precious metals dealers and buyers will be able to provide a state license authorizing him to buy gold and other precious metals. Don’t feel bad asking him to fork over his credentials, either, because he’ll be required by law to ask for your driver’s license or other form of government-issued identification. The reason you must be verified is to help prevent the sale of stolen property and money laundering. Incidentally, this also means if your chosen buyer doesn’t ask to see your ID, you’ll know to pack up and take your gold elsewhere.
- If you take a pawn loan
Some of pawnshops most popular and favorite business is in pawn loans. 80% of pawnbrokers reported that pawn loans, also known as collateral loans, represent the most common transaction type and core of their businesses. Likewise, nearly 80% of consumers will take out more than two pawn loans a year. If you take a loan instead of selling outright, be sure to keep your pawn ticket. Not only does it summarize the details of your loan, it’s also your receipt for the item.