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How To Get The Most For Your Unwanted Gold

By David Bakke

get the most for your goldIf you haven’t been exposed recently to at least some form of advertisement regarding what to do with your unwanted gold, you have probably been living under a rock. The “great ideas” range from sending it through the mail, to dropping it off at a “We Buy Gold” place, to attending a gold buying party.

Where To Go To Sell Your Gold?

Little pop-up walk-in gold stores have flooded my town over the past several months. They are literally everywhere.

The problem with so many options is deciding where to go to get the most for your gold. To make things even more difficult, there are many people out there trying to rip you off, and the resulting losses could be huge.

What I’m going to do is outline the options that you have and guide you a little as far as which direction to go in:

From The Beginning

So, let’s start from the beginning. You’ve got some gold that you no longer want or need, and you want to get rid of it. Keep in mind that all gold is worth money, whether it is broken, tangled, mismatched, whatever. Gold is gold. It’s worth money, and it’s never ever been worth more money than now. Even in its worst shape, gold can always be melted down to retain its value.

First off, there are a few no-brainers to the process. The first one is to never ever send your gold in through the mail to one of those companies telling you how awesome the process is that they’ve created and how efficient it will be for you. They are an absolute rip-off 100% of the time, no questions asked. They pay you pennies on the dollar without a doubt. I’ve seen negative newspaper articles, local news investigative pieces on the subject, and things written by former employees of these places. Never ever…just don’t do it!

Second, I would never sell to the first place that I got an offer from before checking out other options. The gold market right now is incredibly competitive, and the chances are slim that the first place you check out will offer you the best rate. Get a feel for the going rates in the market by checking out your various options.

Third, I would do a little bit of legwork before proceeding. By that I mean, at the very least, I would weigh your gold and get an idea of the current price of gold. Don’t meet with people if you have no knowledge of the topic or you’re bound to get ripped off. This is just a small measure to keep from getting “taken” by not knowing how much you have.

The Bad News

Keep in mind, however, that you will more than likely not get anywhere near the current price of gold. If gold was currently trading at $1,200 per ounce, changes are you will only be able to sell for significantly lower than that. The reason is that the buyers of your gold are basically “middle men,” and are taking on risk by buying your gold. Because they have created a market in which you can sell your gold, you need to pay what can be considered a convenience fee to them. Even with all this said, it doesn’t change the fact that there is still a “best deal” to be had for you out there.

The Options

You have three options:

1) Take it into one of those walk-in, “We Buy Gold” pop-up buildings. If you can’t find one near you, I would be shocked. You go in there, they weigh your gold, and they give you a quote,usually in just a few minutes. But keep in that they can be a little on the “slick” side. In my case, I knew how much gold that I had in grams since I did some prep work ahead of time. Just for kicks, I asked them how much I had. They gave me the weight of my gold in something called “penny-weight” which is another valid way to weigh gold, but few people know what it means or how much weight it really translates into. These places do this simply to confuse you. And it increases the need for you to weigh your gold, so you knew what you’re getting offered. In my case, I made sure they converted to a weight I was more familiar with so that they couldn’t pull a fast one on me.

Some Quick Guidelines Before You Go To One of These Places

Pure gold is currently paying about $1250 per ounce. By going through the math, this means that 10 karat gold will “scrap” at about $16.35 per gram. And 14 karat gold will “scrap” at $23.50 per gram. Scrap prices refers to what these large companies get paid when they send in this gold to be melted, which is what most of them do with your gold. This means that it’s nearly impossible for you to ever get offered more than this amount for your gold. In fact, more than likely, it won’t even be close to this number. As I mentioned earlier, this is because of the “convenience charge” these stores get for being market makers. However, the closer you can get to these numbers, obviously the better.

2) Your second option is to go a pawn shop. Many people recommend going to pawn shopes over the “We Buy Gold” places because often these shops pay significantly more. I recently sold some gold myself and this is exactly what I did. I’ll detail my experience selling gold later in the post.

3) Finally, you can always just wait. Hold on to your gold and wait for the price to go up. Gold fluctuates. But in the long-term, it has always gone up. If you don’t really need the money, it might be the way to go. Save it for that “rainy day.”

My Gold Selling Experience

I recently sold some gold and went with a combination of the first two strategies here. I knew that I would be going to a few pawn shops since I had heard that they pay more than the “We Buy Gold” places. But first, I went to one of the pop-up stores. They offered me pennies on the dollar. About what I expected. Sure, the process only took a few minutes, and they did try to confuse me by telling me the amount I had in “penny weight.” As I got up to leave, they asked me how much I was looking for. What I had was 14 karat, and I told them I wanted to be paid $20 per gram for my gold. I didn’t have much, and I knew I probably would never get this amount, but it is a great negotiating technique to start high.

Then, a strange thing occurred. This person gave me a card which guaranteed me 10% better than any other offer I received out there. I tucked that in my wallet and left.

Next, I went to a few pawn shops. Don’t worry, they are OK to go into. The ones I found were pretty clean as well. I went to one “chain” pawn shop and a few mom and pop shops. What I found was that the national chains will offer you considerably more for your gold because they have more financial backing.

I got a great offer from the national chain pawn shop, got the offer in writing, and decided to go back to the “We Buy Gold” place to show them the offer. Boy, did they have a cow! What they originally offered me was about $8 per gram ($163) and what the pawn shop offered me was $18 per gram ($375). According to the card they gave me, they would have to pay me $19.80 per gram. This woman made about five phone calls to her higher ups, and none of the people on the other end of the line were very happy. They eventually said they would “match” this pawn shop offer so I didn’t have to drive all the way back over there. Even though they didn’t honor the 110% promise, I decided to take the $375 from them.

So you see, I more than doubled the money I would have gotten by just doing a little bit of research and leg work. If I had been more fickle, I probably could have forced the 110% promise, but I was happy with the $375 overall.

Any reader stories out there about selling your unwanted gold? What’s worked and what hasn’t worked? We’d love to hear about your experiences.

(photo credit: briangiesen)

David Bakke
David started his own personal finance blog, YourFinances101, in June of 2009 and published his first book on ways to save more and spend less called "Don't Be A Mule..." Since then he has been a regular contributor for Money Crashers. He lives just outside Atlanta, GA and most all of his free time is taken up by his amazing three year old son, Nicholas.

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  • Mike Z

    I think it is interesting that everybody is talking about SELLING gold – not BUYING it. I really think they should be doing the opposite and after your readers Google Peter Schiff and/or visit financialsense.com, I am convinced that trading the gold for worthless American paper money is silly.

    However, if you have any readers that are looking to sell their gold or silver (coins, ingots, bullion) – send them my way and I’ll buy it for a better price than any dealer would offer.

  • http://www.pawnzone.com usoopblake

    sell or buy gold? well no one can said it’s wrong idea. you would never know their condition. one think that made me interested is your story when your selling gold. great story, it’s didn’t like what I expect from pawn shop. good think to know.

    • David

      Hey there

      I think that (some) pawn shops are underrated in this area.

      They certainly didn’t seem to be out to rip me off as much as the We Buy Gold places.

      Thanks for commenting

  • andres

    thank you for the idea of 10% more cash

    • David Bakke

      Thanks for commenting!

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