FOR A LONG TIME, signs promoting ‘Cash for Gold’ were synonymous with pawn shops, but that changed during the Great Recession of 2007–2009. That was an unprecedented time in American history and was challenging to many jewelers, whose sales plummeted. As a result, buying gold over the counter took root as a revenue source.
Today, inflation, a contentious U.S. election and two wars have led to high gold prices yet again. At press time, the price of gold hovered close to $2,700 per ounce, near its highest-ever sum, and ‘Cash for Gold’ signs have returned to many upscale jewelry stores.
To help merchants get reacquainted with the ins and outs of gold buying or learn how to navigate this precarious landscape for the first time, INSTORE reached out to a number of jewelry retailers via its Brain Squad survey group. Respondents shared insights about the best ways to incorporate (or reincorporate) gold buying into businesses, what to look for in purchases (and what to pay!), and how to maintain a high-end brand image while doing so.
Gold jewelry being weighed at a National Rarities event. PHOTO BY NATIONAL RARITIES
FIRST, YOU MAY
NEED A LICENSE
Depending on your local laws, jewelers likely need to obtain a license of some sort, sometimes called a Precious Metal Dealer License, to buy gold; reach out to your local county government, sheriff’s office, or the Department of Consumer Affairs (in New York) for details.
“There are different legal requirements in every state, and we have a legal team that addresses those regulations with the jewelers we work with,” says Anne Howitt, director of inventory, National Rarities, a gold jewelry and estate buyer that partners with more than 350 retailers nationwide to host in-store buying events.
Terms of licenses, typically renewed annually or every two years (depending on the state), may include the need to provide a copy of a monetary bond upwards of $10,000, proof that your in-store scale is calibrated annually (or whatever timeline is established by the
state) and putting your fingerprints on file. All in all, the fees for these services are several hundred dollars.
Then there are specific steps to follow for the gold purchases themselves. These include making a copy of a seller’s government-issued form of identification, obtaining their contact information and taking photos of the items being sold. This information may need to be uploaded to a database where local officials or police or sheriff’s office authorities monitor it for stolen property.
Bangle bracelet in 18K gold with diamonds, Guzema
This is the case for Tim Wright of Simply Unique Jewelry Designs in Yorktown, VA. He fills out a form required by his state and county for each acquisition and uploads the details to leadsonline.com, an information clearinghouse used by law enforcement nationwide. Wright also keeps copies for himself for three years, just in case items are reported as stolen. In his years of business, he’s only had one instance of purchasing a stolen item: a class ring sold to him by a mailman. Police came to Wright’s store looking for it, and Wright had a record of its purchase. The postal worker claimed he didn’t know it was stolen and had two options: return the money he was paid for it or be prosecuted for the sale of stolen merchandise. Not surprisingly, he gave the money back.
Typically, there is a hold period by jewelers before they melt buys or put items into estate cases. These periods vary by jeweler — it’s five days for Cathy Calhoun of Calhoun Jewelers in Royersford, PA, and 30 days for Eric Stevens of Stevens Diamond Jewelers in West Springfield, MA — and can depend on local laws. The hold period is a cautionary exercise to ensure police aren’t seeking items as stolen goods, but Calhoun says there’s another reason for the move: It’s a ‘just in case’ measure if the client has second thoughts about the sale or if a relative comes in with a story like “My brother sold my mother’s jewelry without permission,” she says.
Mixed Link bracelet in 14K gold, Midas Chain
WHAT TO LOOK FOR
IN GOLD PURCHASES
When assessing over-the-counter jewelry purchases, retailers have a few tried-and-true first steps. They check quality stamps and test metals for verification of purity, then decide if items will be melted or put into estate cases — if that’s part of their business model. For those who do sell estate goods, off-the-street purchases can be a good deal.
A case in point is a gold Omega chain in ‘like-new’ condition that was purchased by Beth Greene of Conti Jewelers in Endwell, NY, for scrap. She phoned a customer whom she knew had been looking for one, and the woman bought the chain the next day.
“We made triple what we paid in scrap for it, and she purchased it for what today’s cost would typically be,” says Greene. “It was a win-win situation.”
Necklace in 18K gold with diamonds, Picchiotti
When clients want to sell what they think are branded items, true antiques or period pieces, or large important diamonds, having some expertise in that area is a must. If jewelry store owners don’t have the estate or significant diamond clientele, they can consult specialists to buy these items.
White Pine is one such company. While it buys gold jewelry, its focus is on pieces with larger diamonds. CEO Benjamin Burne knows how tricky the secondhand market can be. “There are a lot of fakes out there,” he says. Retailers can certainly see what branded items are selling for online — think eBay — but if stores lack the expertise to properly identify important pieces, they “won’t value the premium that these pieces can command, whereas we are always in search of them,” adds Burne.
Howitt is routinely amazed at how quickly the value of broken chains and single earrings adds up today because of the high price of gold. “There are so many things you can do — buy a new custom piece, something for your home, or help a grandchild — with the gold that clients have just sitting around,” she says.
equestriStarburst earrings in 18K and 22K gold with diamonds, Lika Behar Collection
HOW DO YOU
DECIDE WHAT TO
PAY FOR GOLD?
Every merchant’s formula varies, but it’s always related to the weight of the gold. For straight cash-for-gold transactions, Brain Squad respondents pay anywhere from 50% of what they’ll get from the refiner to 80% of scrap value. Not surprisingly, there’s also an app for scrap: ScrapIt! from Kitco, which Amanda Lanteigne of Gold-N-Memories, Ltd, in Steinbach, MB, uses.
Others have formulas.
“I never take anything as plumb — always a quarter karat lower,” says David Blitt of Troy Shoppe Jewellers in Calgary, AB. “Then I offer 75% of the spot price.”
J. Mason Cutchin of J Mason Custom Jeweler in Chapel Hill, NC. pays spot x percentage of gold x weight x 0.80 minus unsetting charges, while James Doggett of Doggett Jewelry in Kingston, NH, offers “a formula based on the previous 10-day average of what my refinery would pay me, minus a percentage.”
The calculations that James Sickinger of Sickinger’s Jewelry in Lowell, IN, uses involve a lot more math.
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“For gold, we sort by karat and weigh in grams,” he begins. “If the scrap is 14K, we multiply the current gold price by .01 and multiply that by the gram weight. For 10K, we use .007 as the multiplier. For sterling silver, we weigh in grams. We then multiply the current silver price by .01 and then by the gram weight. For platinum, we use the same formula with a multiplier of .01. We have successfully used this formula for many years. It keeps us competitive with other gold and silver purchases in the area and still brings us a good profit.”
Wright updates an Excel chart daily with metal prices and generates a “per pennyweight to pay that day for the different karats of gold, all based on a certain percentage,” he explains. “For custom work, we will add 10% to what we pay in trade price, and for friends and family, we pay a higher percentage.”
When it comes to gemstones and diamonds, retailers are split on how those are handled.
“If it was not purchased from our store, we figure scrap weight plus diamonds at 25% of the wholesale price less cost to breakout,” says. J. Dennis Petimezas of Watchmaker’s Diamonds & Jewelry in Johnstown, PA.
Wright doesn’t offer any payment for stones or melee. Cindy Stafford of Wades Jewelers in Southport, NC, also doesn’t buy gemstones, nor does she pay for diamonds that are under a half carat. Mark Robinette of Robinette Jewelers in Seneca Falls, NY, only pays for natural diamonds over 0.33 TCW, but offers nothing for other gems.
Handcrafted band in 18K gold with milgrain, Chris Ploof
Payment prices change if sale items are saleable in store.
“We decide per piece if we are willing to pay more if it is something we would resell in our store,” says Stafford.
It’s a similar scenario for Chrysa Cohen of Continental Jewelers in Wilmington, DE. “We resell a lot of preowned jewelry, so we tend to consider what we can resell something for then work backwards,” she explains.
At Scottsdale Fine Jewelers in Scottsdale, AZ, Scott Lefcourt pays 20–30% below retail and 20 below melt for everything else “if the items we buy can be resold,” he observes.
For Andrea Riso of Talisman Collection in El Dorado Hills, CA, cash-for-gold transactions are often trade-ins toward purchases. “I appraise items based on scrap value or wholesale liquidation value and take into consideration what we already have in stock for stones, as well as how to best benefit the client wanting to sell the jewelry,” she reveals.
And while every merchant wants to make a healthy margin, some take less to lure in a new client.
“We pay a strong price to our clients, sometimes working on 10% margins,” says Eric Stevens of Stevens Diamond Jewelers in West Springfield, MA. “I have had clients go elsewhere to shop prices and return realizing we offered a lot more than our competitors. These clients can become retail clients, and I want them to come in for their future purchases.”
Ring in 18K gold with diamonds, Verragio
HOW TO MAINTAIN
AN ELEVATED STORE
IMAGE WHEN BUYING GOLD
It can be done — classy jewelry stores can buy gold off the street and still look high end. How you execute the move just requires a little finesse.
For starters, consider only buying off the street from regular customers, a move that will eliminate the need to advertise ‘Cash for Gold’ or have store signage to that effect. Alternatively, you can call it something else — like ‘gold recycling services’ or ‘works with estates.’
Stores that do sell antique and vintage jewelry can enlist the help of companies like National Rarities, which helps merchants hold in-store buying events. Both Sue Parker of Nyman Jewelers in Escanaba, MI, and Calhoun have utilized them with success.
While White Pine doesn’t offer in-store events, it does buy estate pieces and important diamonds from retailers.
“It’s something customers want, so if you’re not offering it, you are sending them elsewhere,” Burne says. “Buying gold is about helping your customer. It can sometimes be tricky because consumers don’t know about all the markups in jewelry or about diamond prices dropping and can be disappointed about what value they think their items are worth, but it’s a service people need.”
Others agree.
Jewelry being inspected for sale at a National Rarities buying event. PHOTO BY NATIONAL RARITIES
“Clients understand it is part of our business,” says Stevens. “We have always bought gold from the public. We are and have an upscale image and attract upscale clients. And, we have private offices set up for these transactions.”
More jewelers dismiss the cash-payment moments altogether by taking in old jewelry for store credit only.
“We offer more than just cash for gold buying, giving in-store credit in greater amounts than the cash price toward immediate or future purchases,” says Petimezas. “We can also offer to repurpose what’s being sold.”
Holly McHone of Holly McHone Jewelers in Astoria, OR, also favors this approach. “So many of our street buys come from our established customers and customers that trade them in toward repairs and custom,” she notes.
Greene agrees, too. “We encourage our customers to put their scrap gold as a credit toward a new piece or a custom design instead of taking cash,” she says. “We try to make it an experience instead of a quick transaction for cash.”
Equestrian Collection Horse Bit-motif bracelet in 18K gold with diamonds, VAHAN
THE BEST WAYS
TO ADVERTISE
GOLD BUYING
From small signs on countertops to online ads, social media posts and signage on buildings, retail jewelers have many ways to get the message out that they buy gold.
Of the merchants who use the Internet to spread the word, tactics vary. Parker uses email and Facebook, while Bob Almond of Lane Jewelers in Burlington, NC, lets clients know that he “works with estates” by way of Gold Buying and Appraisals & Repairs sections on his website. Dennis Miller of Millers Fine Jewelry in O’Fallon, MO, relies on “social media, mass mailings, print and television,” he says. “We hit those hard three times a year.”
Despite the rise of the digital world, there are still plenty of clients to reach in newspapers.
“We have ‘Cash for Gold’ ads, which are always the same format,” explains Petimezas. “If we include gold buying in a display ad, we refer to it as ‘Gold Recycling.’”
Jill Hornik of Jae’s Jewelers in Coral Gables, FL, agrees with the printed approach. “Target the right demographic,” she says. “We post [ads] on the front page of the local newspaper because mostly older people who are downsizing are the ones who still have a hard copy subscription.”
Other non-digital means include a small countertop sign at Amber’s Designs in Katy, TX, and a modest tasteful neon one reading “We Buy Gold” in a front window at Stevens’ store.
One of National Rarities’ appraisers evaluating a diamond ring at an in-store jewelry buying event. PHOTO BY NATIONAL RARITIES
For other jewelers, only talking will do. Amanda Lanteigne of Gold-N-Memories, Ltd, in Steinbach, MB, prefers word of mouth, as does Micky Roof of The Jewelbox in Ithaca, NY, who works the topic into client interactions, the gist being that “gold is money and can be traded against work.”
Wright does, too, but for a different reason. “It’s strictly word of mouth [for us], designed to keep ‘riff raff’ out of the process,” he says about preferring to offer the service just to his well-known clients.
Finally, jewelers can also consider hosting an in-store buying event. That’s what National Rarities does for jewelers nationwide.
“Most stores have three to four events a year, though one store we work with has 20 events a year,” says Howitt. “We have a three-day buying event and pay for all advertising in mailings, newspaper and social media ads. The ads bring in new customers and traffic, with some people living right by the store and not realizing it was there! We typically see a minimum of 150 people in three days, and we give the jeweler 10% of whatever we buy. The jeweler doesn’t pay anything out of pocket.”
Venetian Link Collection bracelet in 14K gold with diamonds, Phillip Gavriel for Royal Chain
16 WAYS THE INDUSTRY IS HANDLING HIGH GOLD PRICES
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- I’ll Take 10K. “For a price point, we will offer more 10K goods.” — Sue Parker, Nyman Jewelers, Escanaba, MI.
- Estate Boom. “Our consignment cases have grown, and they are promoted as the best deals. Estate sales are big in our store, and profit from no inventory cost is very good.” — Tim Wright, Simply Unique Jewelry Designs, Yorktown, VA
- Re-Tag & Repeat. “I am pleasantly surprised to see more than understanding and acceptance not only from my retailers, but also from collectors at the trunk show level. The biggest nightmare came from having to re-cost and re-tag everything and realizing that I had not kept up with gradually rising gold prices.” — Lika Behar, Lika Behar Collection
- Reprice Fast Sellers. “Biggest issue is fast sellers being repriced to current cost so you don’t lose money on them. As far as the consumer, my feeling is if we as salespeople do not make a big issue about it, the consumer will not really notice.” — Tom Nelson, Nelson Jewelry, Spencer, IA
- Replenish Best Sellers. “I don’t think high gold prices are too big of a problem, and honestly, we have been here before. Consumer perception is rising with price, and I tell retailers to focus on replenishing best sellers. We are releasing a new collection in the beginning of 2025 that will cater to various audiences and price points.” — Phillip Gabriel Maroof, Royal Chain Group
- Lightweight Designs. “Ring styles are definitely lighter than in the ‘80s and ‘90s. With CAD, we can make a lighter product than hand carving wax.” — Amanda Lanteigne, Gold-N-Memories Ltd, Steinbach, MB
- Very Demure, Very Mindful. “We don’t sacrifice design, but we certainly work more mindfully, carefully, and creatively when gold prices are high.” — Beth Greene, Conti Jewelers, Endwell, NY
- Just Sell It. “Sell it — it is what it is, life is short. We need to give our clients permission to purchase.” — Brenda Newman, The Jewelry Source, El Segundo, CA
- Think About Platinum. “We’re shifting our design emphasis toward daintier pieces, and we’re encouraging our customers to consider more platinum.” — Gretchen Schaffner, Eytan’s Designs, Sherman Oaks, CA
- Price Check, Please. “Be sure you check prices at the time of a client’s inquiry. Don’t cite past prices, even if they were recent. It will cost more than you expect and will probably go up between the design time and the casting time.” — Jill Hornik, Jae’s Jewelers, Coral Gables, FL
- Mixing Metals. “As the price of gold continued to climb in the early ‘90s, our founder, Leon ‘Sacha’ Der Calousdian, saw the need to pivot from all gold designs to mixed metals using the beautiful contrast of 14K gold and sterling silver. To this day, VAHAN Jewelry continues to work carefully with these materials to offer our clientele the perfect blend of luxury and quality at a price that meets expectation.” — Nathalie Der Calousdian, VAHAN Jewelry
- Time for Trade-ins “We have conversations with customers about bringing in their old gold or broken chains [to scrap] to help minimize the cost of repairs or custom work.” — Holly McHone, Holly McHone Jewelers, Astoria, OR
- Wide Open Spaces. “We are making lighter, more open space, and bi-metal or mixed-metal pieces, or ones with larger colored gems.” — Micky Roof, The Jewelbox, Ithaca, NY
- More for Melt. “Soaring gold prices have led to some ‘sticker shock’ for most of our customers. As gold buyers, we hate to scrap heavy figaro chains and omegas, but we’re finding we can get more for them as melt than what our customers are willing to pay for them in our store.” — Bill Elliott, Ross Elliott Jewelers, Terre Haute, IN
- Legacy of Gold. “After 2008, we learned that a fine jewelry customer loves 18K gold and cherishes their jewelry. Rather than purchase alternative metals, they’ll have a heightened sense of the value of gold as the price rises. So, this time, we’re focusing on the inherent value of gold and emphasizing the lasting legacy of fine jewelry.” — Sophia Macris, Verragio Fine Jewelry
- Hungry for Gold. Our customers tell us that there’s still an appetite for gold among the end users. The secret is making unique, trend-forward designs that the consumer can wear every day.” — Jeanie Risso, Midas Chain
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