Gold is seldom sold, goes a popular saying. Yet, many people sell off their old gold jewellery for various reasons. That includes buying newer ones that can make a fashion statement. Every time you buy new gold jewellery, the main concern is about its purity. That, along with its weight, is mentioned in the invoice given by the jeweller. The invoice comes in handy when you want to exchange the ornament with new jewellery in the future
Where such exchange is involved, the process should be straightforward—the old ornament is tested for purity and valued based on the current price of gold. This amount is then adjusted against the price of the new jewellery bought. However, in reality, the exchange is not that simple.
Pune-based Archana Manjavkar realized this when she visited jewellery brand Tanishq recently to exchange her mother’s five-year-old gold jewellery bought from a different jeweller. She was informed that the ornament’s purity will be evaluated in two steps. First, the ornament in its current form is scanned in a Karat metre machine that measures the purity of the outer layer of the ornament. Second, it is melted and checked again to ascertain the purity of the entire gold piece. Manjavkar agreed to go through the process, but was left unsatisfied. “The melted gold was scanned thrice and each time the purity grade reading was different. The jeweller valued the gold at the lowest purity grade. How can I believe the accuracy of the machine,” said Manjavkar.
To be sure, the X-ray fluorescence spectrometer or the karat meter machines used by jewellers to assess the purity of gold are not issued by any regulatory or government authorised body.
Manjavkar visited another jeweller but was told the gold would have to be melted again.
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Melting the gold is the standard practice followed by most jewellers, especially big reputed brands, to check purity of ornaments bought from other jewellers. even if you have a purchase bill. This also applies to gold coins and bars. Melting is not required if you take the jewellery to the same store from where you bought it in the first place.
Some small jewellers agree to exchange gold without melting it but deduct as much as 25-30% of its value as wastage charges.
Udit Narang, owner of Delhi-based jewellery brand Narang Legacy, said the ornament is melted to determine the percentage of gold in it. “Old jewellery that are not hallmarked can show different purity values at different points when tested under a XRV purity testing machine. That is because the jewellery is soldered by an alloy and the purity is not homogeneous . When it is melted and properly mixed, it becomes a solid one piece bar with homogeneous purity,” he said.
Melting gold may result in a slight reduction in weight of your gold due to removal of dirt, colouring or loss of metal in the process.
Melting is not required in case of hallmarked jewellery as the caratage (22k/18k/14k) is certified by a Bureau of Indian Standards (BIS) centre. Hallmarking accurately determines and records the content of different metals, such as silver, copper, etc, apart from gold in an ornament. If you’re exchanging hallmarked jewellery, you should verify the hallmarking number embossed on the ornament and check the purity on the BIS Care app using this number.
However, mandatory hallmarking is a recent rule. The website of the department of consumer affairs says consumers can get their old gold jewellery hallmarked through a BIS registered jeweller, but, in reality, it’s easier said than done. Narang explained that an individual cannot get jewellery hallmarked directly at a BIS centre as hallmarking requests are accepted from only those with a BIS certificate. Certificates are issued only to entities with GST details and not individuals. “Most jewellers will refuse to get your old jewellery hallmarked as it will get included in their stock,” he said.
Hence, those looking to exchange their old jewellery that is not hallmarked will most likely have to get its purity tested through the process of melting.
Surendra Mehta, national secretary, India Bullion and Jewellers Association (IBJA,) said that customers should only go either to the original jeweller to test old ornaments or to a jeweller they trust. “Customers shouldn’t agree to melt their jewellery at the first jewellery shop they visit. Check with several jewellers about their purity evaluation method and who is giving a better price,” Mehta said. All jewellers offer a different gold rate after factoring in their costs on logistics, insurance, etc.
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Since the process of jewellery exchange is not standardized, different jewellers have different charges on exchange. Most deduct a 3-6% wastage charge on the value of the ornament exchanged. For instance, Senco Gold & Diamond deducts 6% in waste charges if the old jewellery is below 22k in purity. Among other major jewellery outlets, Kerala-headquartered Malabar Gold and Diamonds deduct 3% in wastage, whereas Tanishq doesn’t deduct any wastage charges.
Do note that there is a formula to calculate the value of your gold jeweller and arrive at the right price. For instance, if you are exchanging 18k gold ornament for a 22k one, the formula is derived thus: the value of 22k gold*(18/22). This is the minimum price at which the gold should be valued. Similarly, if the gold exchanged is 22k, then its value will be as per the 22k rate offered by the jeweller on that day.