My family and I own a jewelry store in Detroit and run a ton of transactions. Many of our customers come in to pawn or sell us their old gold jewelry. Much of the jewelry is out of fashion or broken so there’s no resale value. We send this scrap jewelry to a refiner to be melted down. Prices are usually based on the weight of the gold content. Solid gold jewelry is 24 karats. Lesser jewelry has less gold content and usually contains other metals and hardening agents. The less gold content in a piece of jewelry, the less money it will be worth to anyone who intends to melt it down. So if I receive less money from the refiner, I will have to offer less money to the customer.
To stay in business, I need to make sure the cash offer is fair to both the customer and to me. Before I hand over money to the customer, I need to know exactly how much gold is in that scrap jewelry. If the customer is mistaken about the karat weight, or if karat marks are wrong and I don’t know the exact content, I could be burned.
Read the full blog post at the Analyzing Metals Blog.