Selling
Selling scrap gold: what is deducted and why, and how to avoid losing money
When you sell used gold the buyer pays its melt value less a deduction and never refunds the making charge. We explain every deduction one by one, how to compute what you will receive at today's price, when an exchange beats a sale, where to sell, and the mistakes that cost sellers the most.
Selling scrap gold: what is deducted and why
Gold you bought as jewellery comes back to the market under another name on the day you sell it: scrap. Scrap is bought by its weight of pure gold at today's price, not at the price you paid, and not at the price of a new piece in the window. Knowing what is deducted and why lets you sell at the right price, or decide not to sell yet. This article explains each deduction with numbers, compares selling with exchanging, and lists the mistakes that cost sellers the most.
What happens to the piece after you sell it
A buyer of scrap rarely sells the piece as it is; it is melted, refined and re-made or sold as a bar. So the buyer pays only for what survives the melt: the pure gold. The making charge you paid was the price of a shape that will disappear, the hallmarking fee paid for a stamp that will be melted, and the tax went to the state. That is the first truth of selling: you recover the value of the metal and nothing else.
Deduction one: the making charge is never refunded
A 10 g chain of 18K bought with a making charge of 15% of the gold value cost you 15% extra on the day; on the day you sell that money is gone. The rule: the higher the making charge (light pieces, intricate designs, brands, stone-set work), the larger the certain loss on resale. That is why people who buy to save are told to choose heavy, simple pieces, coins and bars.
Deduction two: the scrap discount
On top of losing the making charge, the buyer deducts a share of the melt value for refining, margin and the risk that the karat is not what it says. Usual deductions:
| Type of piece | Usual deduction from melt value |
|---|---|
| Bars, coins and stamped pieces in their packaging | 1–3% |
| Plain hallmarked jewellery in good condition | 3–6% (reputable buyers in the US and UK pay 85–95% of melt) |
| Old, worn or unclearly marked jewellery | 6–10% and more |
| Very light, plated or mixed-karat pieces | more, or refused |
A 10 g chain of 18K (7.5 g of pure gold) has a melt value of $981.91 today (November 7, 2026); at a 5% deduction you receive about 95% of that figure.
Deduction three: stones and settings
Stones carry no value at the melt (except genuine diamonds, which are valued separately), and their weight is subtracted from the piece before the calculation. A 12 g piece with 2 g of stones is priced on 10 g. Some buyers estimate the stone weight as a flat share of the piece; if the stones are many, ask for them to be removed or weighed precisely.
Deduction four: melting loss and the karat test
Some buyers deduct a small percentage for metal lost in melting, and on old pieces the buyer may test the karat (acid on a touchstone, or an XRF analyser) and pay on the result rather than the stamp. A piece with a clear hallmark and a purchase invoice usually escapes this argument.
How to compute what you will receive before you go in
- Net weight = weight of the piece − weight of stones.
- Pure gold = net weight × (karat ÷ 24).
- Melt value = pure gold × today's 24K gram price ($130.92, £98.02).
- Expected amount = melt value × (1 − the deduction).
The sell your gold tool does all of this, gives the amount at three deduction rates, and computes your profit or loss against what you paid if you enter it.
The break-even point: an example
You bought a 10 g 18K chain two years ago for $1,100 including making charge and tax, when the gold in it was worth $800. Today its melt value is $981.91 and you will receive about 95% of it after a 5% deduction. Your break-even is the 24K gram price at which 95% of 7.5 g equals $1,100, that is $1,100 ÷ 7.125 = $154 per gram. If today's price is above that, you are ahead; if it is below, selling now turns the making charge you paid into a realised loss.
Sell or exchange?
If you are going to buy new gold anyway, ask about an exchange: many jewellers take your old piece at melt value with a smaller deduction than a scrap sale (or none at all if you bought it from them), and charge you only the difference in weight plus the new making charge. That saves the scrap discount and sometimes part of the making. If you need cash, selling is the route; compare two buyers' offers on the same day, because the raw price is the same and the whole difference is the deduction.
Where to sell
- Traditional gold districts: usually the best scrap prices, because shops compete and know the market.
- The shop you bought from: may offer a smaller deduction with the original invoice, and is the best place for an exchange.
- Bullion dealers: best for stamped bars and coins, at a 1–3% deduction.
- Avoid: selling in a hurry to the first offer, to anyone who will not weigh in front of you, or to anyone who refuses to state the deduction before weighing. Mail-in "cash for gold" services typically pay less than a local buyer.
When to sell
Nobody knows tomorrow's price, but three things are in your control: know the melt value now before you walk in, compare today's price with recent weeks in the price archive to see whether you are selling near a high or a low, and compute your break-even, the price gold must reach for you to recover everything you paid including the making charge. If the current price is below it and you can wait, holding keeps the loss unrealised; selling makes it real.
Mistakes that cost sellers
- Selling on the gross weight without subtracting stones, then accepting a second "stone" deduction.
- Using the price in the news (the selling price to a buyer) instead of the scrap buying price.
- Forgetting the invoice and the hallmark, so the karat is tested on the buyer's terms.
- Selling coins or bars out of their packaging; a sealed pack reduces the deduction.
- Selling everything at once on a down day because you need cash; if you can, sell only what the need requires.
Frequently asked questions
How much does a buyer deduct on scrap?
Usually 3–10% of the melt value depending on condition and karat, and 1–3% on stamped bars and coins; the making charge is never refunded.
Do I get the advertised price or the buying price?
The scrap buying price, which is below the advertised selling price by the deduction above; the live price on this site is the melt value both are computed from.
Is an exchange cheaper than a sale?
Usually yes if you are buying new, because the exchange deduction is smaller or nil at the same shop, and you pay only the difference in weight and the new making charge.
What if the piece has no hallmark?
It will be tested and paid on the result, often with a larger deduction; show it to more than one buyer.