DOES YOUR JEWELER BUY AND RESELL GOLD?

I’m watching TV the other day and I see this commercial for a local jewelry store.

It shows an image of some gold bars, gold coins, assorted jewelry and gold chains. The announcer says:

“We buy gold.”

It makes me curious that they’re advertising something like this at Christmastime. You’d think they’d be selling diamonds or one of the top ten jewelry gifts, but nope…

Buying gold? Hmmm…

And then back to back, another commercial comes on for the same jeweler. This ad was a different. They used the same image of the gold bars, chains and coins, but now the announcer says “Huge clearance! Tons of gold jewelry, chains, rings and earrings, all 50% off.”

Buying and selling?

I had to laugh at this. One second they’re “buying gold” and the next they’re “selling gold“?

How convenient.

The fact is, just about every jeweler across the country is doing this. Everywhere you turn there’s an advertisement stating “buying gold – We pay top dollar – Turn your unwanted jewelry into cash” Everywhere you look, there’s another ad.

With all this gold being bought, what are they doing with it?

Reselling it?

I know of some jewelers that have advertised nothing else other than the fact that they buy gold for the past year. Some have even put it on huge billboards that must have cost them tons of money. So it must be worth it, right? (huge profits?)

I’ve even seen stores that have nothing to do with the jewelry industry buying gold. Places like clothing stores, supermarkets and even restaurants. What is everybody doing with all this gold? I mean, are there still people left who have gold to sell?

One jeweler I know has a 6 foot safe filled to the brim with jewelry and diamonds they’ve bought this year. There’s so much of it, they don’t even know what to do with it. It’s crazy.

So what do they do with it?

They sell it. It’s quick money to be made. Most of the time jewelers break up the jewelry, remove all the gems and diamonds, sort out the metals into piles of 10kt gold, 14kt gold, sterling silver, and platinum, then send them off to the refineries where they’ll be melted down, purified, and repackaged once more to be sold. It’s a never ending cycle.

The diamonds and gems that they pull out of the pieces either get reused into new merchandise, or if they’re chipped or broken, they get pitched (unless they’re big enough to have recut).

This is the way it’s supposed to go…

Break it up… Scrap the gold. Save the stones.

But some jewelry stores don’t scrap everything. They hang on to some of the better looking goods and resell them again. No biggie… They polish them up again so they all look brand new, put huge discounts on them and sell them back to the public. This is all fine… There’s nothing wrong with this, as long as they let the customer know…

And that’s where the problem lies…

Jewelers can’t resell these pieces as “new” anymore. Not that it matters much because people are always looking for a deal (half-off is hard to pass up). But because these are used pieces, the jewelry is, well, used. The shanks may be thin, the prongs may be low, the stones may be worn. You get what you pay for. Used is used. But at 50% off??? That is a steal.

Jewelers that resell jewelry usually have them tagged as “estate“, “refurbished“, “used“, or even “previously owned“. This all means the same thing. Some even label them as “antique“, but they may not be. To qualify as an antique, merchandise needs to be at least 25 years old.

And then we have the shady jewelers…

(There will always be a few…) These are the jewelers that polish up these used pieces and stick them in their showcases to sell them an “brand new” items. Not cool. They’re getting full retail price for used goods.

So if you’re shopping at a jeweler that both buys and sells gold, be extra careful of what you purchase. Not that there’s anything wrong with “used” items, but you should knowthat they are used before you buy them (not be surprised later that the shank was so worn and thin it broke in 2 months).

My advice?

I suggest customers to look over any jewelry good. Use a microscope or a 10x jeweler’s loupe and check out the gemstones. Are they worn down? Rounded off? Scratched? Chipped? Are the prongs durable?

Prongs should be built up and holding in the stones securely (you don’t want the prongs looking thin like a pancake). Check out the shank of the ring, make sure it’s not thin and on the verge of breaking. Search the item for pits in the gold, dents, scratches, any indication that the merchandise might be used.

If you have doubts, don’t buy it.

Better safe than sorry. I’m not saying this will happen to you, or anyone, I’m just saying “Heads up.” Look before you buy. It’s the wise thing to do.

One last really good indicator that the ring you’re looking at might be previously worn…

The ring size.

If the ring size isn’t a standard default size (which is usually a 6 or 7), then that ring has probably been sized for someone else, worn, and either sold or returned. Make sure you check it out well. :)

Jewelers buy goods “cheap” and should sell them “cheaper“. What goes around comes around. We hope…

So I ask you: Are you buying new?

Cheers! :)