One of the hardest issues in our business is the disappointment people sometimes feel when we make them an offer on their gold jewelry. This isn’t an issue when we buy mismatched earrings, twisted chains or old, broken items. Many times, when someone has emptied their jewelry box of things they haven’t used in years, they are pleasantly surprised at the amount a ‘pile of old junk’ will bring. However, when someone is forced by tough economic times to part with an item they may have recently bought, they can be sorely disappointed. Why is this?

The first thing you have to consider is the nature of the jewelry business. Raw gold, while intrinsically valuable, is always enhanced by the craftsmanship and artistry of a jewelry designer. Many times, you pay extra for a famous name, just as with designer clothing. Obviously, the more detailed and intricate the piece, the more work that goes into it and the more you pay for it.

Next, think about the typical jewelry store. Cases of stock, fancy alarm systems, salespeople in expensive clothing and even armed guards can be common. All of that costs money. When you look at all that goes into the presentation and sale of a piece of jewlery, it isn’t surprising to hear of 200%, 300% or even 800% markups.

It’s just like buying a new car. As soon as you leave the lot, you’ve lost thousands of dollars in value. As the car gets older and a little less shiny and new, the price also begins to drop. And if everybody is trying to SELL instead of BUY, the price plummets. If you wreck the car, you might be lucky to get a few hundred dollars for the car you paid tens of thousands of dollars to purchase.

Selling scrap gold is very similar. At South Kansas City Gold Buyer we deal in scrap gold. We don’t buy jewelry with the intention of reselling it. Virtually everything we buy goes to the refinery to be melted and processed (gold coins being one exception – unless they’re damaged). So what we pay is based on the actual gold content, regardless of any design or style issues.

As a case in point, we met a man who had paid $2850 for a man’s wedding ring at a local jeweler. It had seven small diamonds, totaling about one carat in weight. Unfortunately, the market for small diamonds is pretty weak, so the stones weren’t going to help him much. The original jeweler wouldn’t even consider buying it back. Another jeweler didn’t want it and said he would be surprised if the man could get $400 for it. When we checked it, it had about $150 worth of gold in the ring. Needless to say, the client was devastated and ended up not selling to us.

So who is to blame? Not South Kansas City Gold Buyer. Probably not even the designer, since he probably got a small fraction of the sale price. The high markup at the jewelry store is the prime suspect. They may have paid a few hundred for the ring and then doubled or tripled or quadrupled the price. Or worse.

So if you have jewelry to sell, please remember that we deal in scrap gold. We will always do our utmost to give you the best price on scrap gold in Kansas City, but there is a big difference between the cost of a piece of jewelry and the price of the gold that was used to make it.

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