How much do gold buyers pay versus melt value

Know how much do gold buyers pay before you hand over a ring or chain. The short answer: a percentage of the melt value, never the full spot price. A fair offer for common 10K or 14K scrap falls between 60% and 80% of melt value.

Gold buyers pay less than melt value because they cover three fixed costs plus their own profit. First, the item must be refined: melted down and purified to 24K. Refining losses run 1% to 5% of the gold content. Second, an assay, a test that determines exact purity, costs time and equipment. Third, the buyer adds a profit margin. A cash-for-gold shop may deduct 20% to 40% of melt value as their combined margin; a direct-to-refiner payout may deduct only 5% to 10% for large lots.

The US Federal Trade Commission's consumer guidance on selling gold (16 CFR Part 23) covers karat marking but not payout percentages. No regulation sets a minimum payout. Calculate melt value yourself and compare offers as a share of that number.

Different buyers pay different shares of melt value. Knowing which type you face tells you whether the offer is reasonable or a lowball.

Pawn Shops

A pawn shop gold price is usually the lowest. Pawn shops take scrap gold as a side business, not a specialty. They pay 50% to 70% of melt value for common karats, and they often use a scale that may not be NIST-certified. The US FTC advice on cash-for-gold notes that pawn shops are not required to explain how they calculated their offer. Ask for the weight and karat they used, then verify it yourself.

Cash-for-Gold Stores

These stores buy scrap gold. They pay 60% to 80% of melt value for 10K and 14K items. They may deduct a refining fee or quote a flat payout share. Their scales should meet NIST Handbook 44 Class II standards, which require a resolution of 0.01 grams for loads up to 1200 grams. Ask to see the scale's certification sticker.

Jewelers and Refiners

Many local jewelers buy scrap gold as a sideline. They often pay 70% to 85% of melt value because they can reuse the metal. A jeweler may also recognize a piece as worth more than melt: a branded design, an antique setting, or a valuable stone. Let them see the item before you mention scrap value. A refiner payout is the highest you can get, often 90% to 98% of melt value for large lots. But refiners set a minimum weight, usually 50 or 100 grams of pure gold. They pay by bank transfer after an assay, not cash on the spot. For a few rings or a single chain, a refiner will not be an option.

Online Buyers

Mail-in gold buyers quote a payout share upfront, then send a check after they receive and test your items. Their offers range from 70% to 85% of melt value. The risk: you lose control of the piece. The US FTC warns that some mail-in buyers have been cited for under-weighing or misrepresenting karat. Use a buyer who publishes the LBMA Gold Price they use and who guarantees to return your items if you reject the offer.

Before you say yes, ask these five questions. Their answers tell you whether the offer is fair.

• What is the weight you measured, and on what scale? Ask to see the weight displayed.
• What karat are you using? A 14K stamp is allowed to be off by 0.5 karat under US FTC rules (16 CFR 23.4). If the buyer's karat is lower than the stamp, challenge it.
• What is the spot price you are using today? The LBMA Gold Price is set twice daily. If the buyer uses a different price, ask why.
• What is your payout share? A direct statement like “70% of melt value” is better than a dollar offer you cannot check.
• Are there any fees? Some buyers deduct an assay fee or a handling charge on top of their margin.

Never let a piece out of your sight until you agree to sell. The buyer should weigh your item on a scale you can see. NIST Handbook 44 Class II scales are required for trade in precious metals. A scale reading 0.01 grams high on a 5-gram piece adds about $0.64 to the melt value at $2,000 per troy ounce. Small on one piece, but a pattern of over-reading across many customers is real fraud.

After weighing, the buyer should test the karat in front of you. The most common test is a nitric acid test kit. The kit uses acids for 10K, 14K, 18K and 22K. The buyer should wear gloves and eye protection, and the test should be done on an inconspicuous spot: a file mark on the inside of a ring band, not the visible face. If the buyer refuses to test in front of you, or says they will send it to an assay lab, walk out.

Not all gold items should be sold as scrap. A piece from a known brand (Tiffany, Cartier, David Yurman) can sell for more than melt on the secondhand market. An antique or vintage piece may have value as jewellery that exceeds its gold content. Stones are another case: a diamond, sapphire or ruby can be worth many times the gold they are set in.

If a piece has a designer mark, a hallmarked fineness like 750 or 585, or visible stones, get a separate appraisal before you sell it as scrap. A local jeweler who buys scrap gold may recognize the piece and offer above melt, but they will not pay full retail. A specialty vintage or estate buyer is the right outlet for branded or antique pieces. For stones, remove them first if you can; a jeweler can do this non-destructively. Then sell the gold separately.

Some items should never be sold as scrap gold. Gold-filled items have a layer of gold bonded to base metal, but the minimum gold content is only 1/20 of total weight under US FTC rules (16 CFR 23.6). A 10-gram gold-filled piece contains at most 0.5 grams of gold. Melt value: about $32 at $2,000 per troy ounce. A gold buyer may still offer $5 to $10 for it, but you would be better off keeping it as a wearable piece.

Gold-plated items have an even thinner layer. The FTC requires a minimum of 0.5 microns of gold for a piece to be called gold-plated. At that thickness, the gold content is negligible. A magnet test often reveals the base metal. Do not expect any payout for gold-plated items.

Dental gold is another tricky category. Most dental alloys are 10K to 18K, and many are classified as noble (25% to 60% gold) or high-noble (60%+ gold) by the ADA. A crown or bridge that looks heavy may contain less gold than you think. A refiner who specializes in dental scrap can give you an accurate assay, but a cash-for-gold shop will likely lowball you on karat.

Use this checklist before you sell. Each item protects you from an unfair deal.

• Weigh the piece yourself on a scale that reads to 0.01 grams. A kitchen scale is not accurate enough. A jeweler's scale that you calibrate with a known weight is better.
• Find the karat stamp. Common US stamps are 10K, 14K, 18K.
• Look up the LBMA Gold Price for today. It is published twice daily.
• Calculate melt value: (weight in grams / 31.1035) × (karat / 24) × spot price.
• Ask the buyer for their payout share. Multiply melt value by that share. If the dollar offer is lower than that number, you know the buyer is deducting more than stated.
• Watch the weigh and test happen. Do not let the piece leave your sight.
• Get the offer in writing. A buyer who will not write down the weight, karat and payout share is a buyer to avoid.

The most common mistake sellers make is assuming the spot price is what they will receive. It is not. The spot price is the benchmark for one troy ounce of 24K gold on the LBMA. Your 14K ring has less than 60% of that value per gram, and the buyer deducts their costs from that. A seller who walks in expecting $2,000 for a 10-gram 14K chain, when the melt value is $376, has already lost the negotiation. Calculate melt value before you enter the store. That number is your starting point, and the buyer's offer should be a share of it, not of the spot price.