It makes a difference whether it's a jeweler or a scrap dealer who's doing the buying. And don't expect to get the appraised value.
Kathy M. Kristof, Personal Finance
May 10, 2009

Selling old jewelry out of necessity or for profit has become a trend of late, with consumers flooding pawnshops and packing up their gold and silver in prepaid envelopes for scrap.

But how do you get the best value for your jewelry?

How much you'll get depends on what you have, whom you're selling to and how much it weighs.

First, a reality check.

It is exceptionally rare to sell a secondhand piece for anything close to what it cost to purchase, said Howard Rubin of the National Assn. of Jewelry Appraisers. You also won't get anything close to the appraised value, if the jewelry was appraised for insurance purposes.

That's because insurance appraisals are based on what it would cost to replace the item, assuming you are buying retail. And the retail price includes a lot of overhead, such as a profit for the manufacturer, the wholesaler and the retailer. When you're selling, the buyer wants to earn a profit too.

Does that mean you'll get 70% of what you paid? Half? Rubin declined to speculate. The answer varies widely and can be affected by the beauty and rarity of the piece as well as where and when you bought originally.

In other words, this can be a way to raise cash. But don't be fooled into thinking you're going to turn a profit. You shouldn't sell any jewelry that you really like, unless you're desperate.

Now, objectively evaluate the piece.

Start with whether it's attractive and fashionable. Would you wear it today -- assuming you weren't affected by the sentimental pull of its being your grandmother's favorite brooch?

There are myriad estate jewelry buyers in virtually every major city that can be found in the yellow pages or on the Web. Rubin suggested that you visit several -- favoring jewelers in your neighborhood -- and ask what they'd offer.

Local jewelers are likely to give you the best price, he said, partly because they'll see you as a potential customer.

The downside: If they're not normally in the business of buying old jewelry, they might offer you a trade-in rather than cash.

Jewelers and estate jewelry buyers are also the best bet for selling outdated jewelry that includes large, attractive or valuable gems. Scrap dealers and refiners are interested in the metal value, not necessarily in resetting the gemstones.

A jeweler, on the other hand, might be interested in buying nice gems to place in an updated setting.

If no jeweler or estate buyer is willing to give you what you think the item is worth, try peddling it on EBay or Craigslist, where you connect directly with other consumers, who may have the same taste as you.

What if all you've got are the ugly but heavy gold chains from the "Saturday Night Fever" era? With these, your best bet is selling to a refiner for the melted-metal value, said Jeff Clark, editor of an industry newsletter called BigGold.

With gold prices near historical highs, heavy rings and chains could bring a pretty penny -- about $850 per troy ounce of pure gold.

To figure out how much you'll get for an individual piece, look for a karat stamp. This is normally on the inside of a ring, and on or near the clasp of a necklace or bracelet.

If the stamp shows that it's 24-karat gold, your item is pure and likely to be worth nearly the current spot price of the metal. But it's more likely to be 14 karat (about 58% pure), which means you need almost twice as much weight to get the same gold content and payoff.

Can't find a stamp? The piece may have been sized, filed or cleaned so much that the stamp was cut or worn away. Or it could be that your item simply isn't gold.

A quick way to determine whether it's not gold is to expose it to a magnet. If it sticks, and it's not gray or green in color, it's something else. Gold is not magnetic, Clark said. (Gold is sometimes alloyed with iron, which is magnetic, but that alloy will make it turn gray or green.)

Once you determine the gold content, weigh all the pieces with the same gold content and multiply the total weight by 0.912. Why? A troy ounce is a touch heavier than an ordinary ounce, so you have to adjust.

If you have a full troy ounce, you can now multiply the spot price by the percentage of gold content. (See chart.) In other words, if gold is selling for $850 an ounce and your gold is 14 karat, or 58.3% pure, it's worth about $495. ($850 times 58%.)

Dillon Gage Refinery in Dallas pays 98% of the gold's value, after subtracting a $30 assay fee per lot, Clark said. Precious Metal Recovery in Farmington Hills, Mich., pays 95% of the value but doesn't charge an assay fee, which is a charge for verifying the gold content.

The catch with selling to a refiner? You'd better not want the item back. Refineries determine the metal's purity by melting it. If you don't like the price after the jewelry is melted, you can ask for the blob of gold back, but the necklace is gone for good.

Then there are scrap dealers -- including many companies that advertise on television that they will give you cash for your gold. But they will turn around and sell it to a refiner. Which means that in order to make a profit for themselves, they'll pay you less, Clark said.

"It's a popular movement for people to try to turn their jewelry into cash," Clark said. "But you're going to get a lot less from these scrap dealers than you would from a refinery."

kathykristof24@gmail.com

source: LA Times