Do Pawn Shops Pay a Fair Price for Gold?

If you are looking for some extra cash, jewelry is one of the most viable options. You can get a substantial amount from jewelry you have which can help you in your time of need. There are a number of ways to sell your gold, each with its own pros and cons. One such option which is always available are pawn shops.

Gold is a heavily traded item which is traded in the open market and has a varying price similar to those of currencies. An advantage of gold being a heavily traded item is the fact that at any given point of time, the price of gold is constant regardless of your location. You can reliably predict how much gold would cost you, if you were to buy it or how much you can get, if you were to sell it.

Before going to sell your gold, know its value

You should be aware of the value of your item before you go to a shop to sell it. One way to do that is to get a qualified appraiser. They can determine the properties and value of your gold in order to give you an idea of how much your jewelry is worth, if bought new. Getting it appraised from multiple sources is also a good idea, since it allows you to fetch a higher appraised value as well as having multiple sources of confirmation about the gold’s value.

You should be familiar with the current market and fashion trends. A good appraiser and jewelry salesperson can answer your questions, so inquire as much as you can. A piece of jewelry which is currently in trend might sell for more than a piece which is not.

Another important factor is, does the jewelry have history? Your jewelry or item might be worth more than its raw gold If it belonged to someone prominent, or if it has some historical significance, you can expect a much higher offer than you would get for gold of same weight.

There have been auctions where items sold for tens of thousands of dollars because of their historical significance, which would otherwise not have a worth of more than a few hundreds of dollars if purely judged by their material. Before you decide to scrap the piece or sell it purely based on its weight, make sure to dig deep into its history.

Prepare the item for sale

Appearance can go a long way in convincing the pawnbroker to give you a good deal. A dusty and old looking necklace you bought for $10,000 might not even sell for 10% of its value because the pawnbroker was not convinced of its market value. However, a necklace which looks new might fetch a lot more if it can appeal to the pawnbroker’s eye.

You can clean the item for yourself with a few household items, there are a number of helpful guides available on the internet. Or, if you are not comfortable handling this yourself, you can ask your local jeweler to do this for you. They handle most cases of maintenance fairly economically, and you would often end up spending fairly less on maintenance than the money you would gain while selling the jewelry.

How much would your gold fetch you at a pawn shop?

This obviously depends on a number of factors. However, you will certainly be getting significantly less than the original price you paid for the jewelry. The same goes for the appraised value of the jewelry. The appraised value gives you the price for the piece when it is bought new when you factor in the cost of manufacturing, store operations, etc. Selling it back to the store or a pawn shop loses a lot of that value.

You can get anywhere between 30-70% of the value of the raw gold the jewelry has, since the pawn shop also has to factor in the cost of melting it down and to form it into new jewelry or into raw gold bullion. Some plain chain appraised at $250 was offered between $130-150 at several jewelry stores as well as at pawn shops. Similarly, a $600 necklace was not offered more than $320 at several shops and stores.

You can get a higher value if the piece itself is marketable, has a history, or if you sell it for scraps. Selling it for scraps means that you have melted the piece yourself and are selling the raw materials. It also makes it easier for you to get an offer, and can be beneficial if you have a number of smaller items. However, you should be well aware of the quantity of gold and quality of jewelry before you decide to melt it, so make sure to get it evaluated from one or more appraisers.

Selling it to a pawn shop does not have any distinct disadvantages when compared to selling it to a jewelry store. Due to the heavily traded nature and market of gold, both tend to offer similar prices. A pawn shop has the advantage of being more flexible and can even offer you loans or various deals which might suite you better.

As always, an option is to sell the gold directly to a buyer, which generally has the highest return. This skips the costs a pawn shop or a jewelry shop might have for gaining a profit and can fetch you a price closest to what the piece is worth. However, that may require you to search for a buyer and wait. If you do not wish to go through this ordeal, then selling it to a pawn shop is a good option. They offer fair prices when you factor in their costs and are very competitive to jewelry shops. You can find a number of trusted pawn shops who are known to trade in gold at our site.

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