I recently drove past a local “We Buy Gold” shop and saw something I hadn’t seen in years: a line out the door.
People are scrambling to cash in on grandpa’s old watch or that broken necklace from high school.
And who can blame them? With precious metal prices hovering near record highs, that dusty jewelry box looks a lot like a winning lottery ticket.
But here’s the cold, hard truth: The gold buying industry is designed to confuse you. If you walk into a pawn shop or a hotel ballroom “gold party” without doing your homework, you’re practically donating your inheritance to their profit margin. I’ve seen offers vary by 50% or more for the exact same item.
If you’re ready to turn your gold jewelry into cash, do it right. Here’s your step-by-step guide to selling gold and silver without getting fleeced.
1. Know exactly what you have
Before you let anyone else touch your gold, you need to sort it yourself. Unscrupulous buyers love a “mixed bag” because they can weigh everything together and pay you the lowest karat price for the whole lot.
Grab a magnifying glass and look for the stamps.
- Gold: You’ll see markings like 10k, 14k, 18k, or numbers like 585 (which means 58.5% gold, or 14k) and 750 (75% gold, or 18k).
- Silver: Look for the word “Sterling” or the number 925.
- The Trap: If you see “GF” (Gold Filled), “GP” (Gold Plated), or “EPNS” (Electro-Plated Nickel Silver), put it back in the drawer. It has almost no melt value.
Separate your piles by karat. Never let a buyer weigh your 18k wedding band on the same scale as your 10k class ring.
2. Calculate the ‘melt value’ yourself
This is where most people get ripped off. They don’t know the math, so they accept the first number thrown at them.
Gold is a commodity. Its price changes daily. To know if an offer is fair, you need to know the “melt value”—the value of the pure metal inside your jewelry if it were melted down.
Here’s the back-of-the-napkin math:
- Get the weight: Use a kitchen food scale to weigh your sorted piles in grams.
- Get the spot price: Google “current gold price per gram.” Let’s hypothetically say it’s $80 per gram.
- Adjust for purity:
- 14k gold is only 58.3% gold. So, $80 x 0.583 = $46.64 per gram.
- 18k gold is 75% gold. So, $80 x 0.75 = $60.00 per gram.
If you have 10 grams of 14k gold, the melt value is roughly $466. If a buyer offers you $200, you’re getting low-balled. You should aim for at least 70% to 80% of melt value from a physical store.
3. Choose the right buyer (The hierarchy of payout)
Not all buyers are created equal. In my experience, there are different ways to sell your gold that offer vastly different payouts.
The Pawn Shop (The emergency option)
Pawn shops are in the business of quick cash and high margins. They typically pay the lowest percentage of melt value—often 40% to 60%. If you need cash today to pay the electric bill, this is your option. If you can wait a few days, skip it.
The Local Jeweler (The solid middle ground)
Independent jewelers often pay better than pawn shops, especially if they can resell the piece rather than melt it. If you have a Tiffany piece or a vintage watch, take it here first. They value the craftsmanship, not just the raw metal.
The Online Refiner (The top dollar)
For broken chains, ugly rings, and scrap gold, online refiners usually offer the best payout—often 90% to 95% of the spot price. These companies have lower overhead than a strip-mall store. The catch? You have to mail your items and wait a few days for a check.
4. Watch out for the ‘weighing game’
If you sell in person, watch the scale like a hawk.
Some gold buyers weigh in “pennyweights” (dwt) but sell based on grams, or vice versa, to confuse the customer.
Ensure the scale is certified and visible. If they take your jewelry into a back room to “test” it, ask for it back and leave. Authentic testing—usually a simple acid test or a scratch on a stone—can and should be done right in front of you.
Selling heirlooms can be emotional, but don’t let nostalgia cloud your math. Know your karats, check the spot price, and never be afraid to walk away from a bad deal.