Things to know before you sell your gold and silver to a pawn shop

Perhaps you have been investing in precious metals for many years and think it’s time to offload some of your collection. Or maybe you have inherited some of the collection from a family member. Whatever your case may be, we have helpful points to make sure that your transaction is as smooth as possible when buying or selling gold and silver from a pawn shop. As never have been so many choices on where and how to sell. 

Whether you sell your gold and silver online, at a local jeweler or through a pawn shop, it is possible, if you are not careful, to wind up with less than its full value. When selling gold or silver, keep the following points in mind:

• Pawnshops provide short-term, collateral-based loans to consumers. Getting a loan is fairly straightforward. You bring an item to the pawnshop. The pawnbroker looks over it and if they think it is something they can eventually sell; they will offer to loan you a fraction of its value. If you accept the offer, you get cash on the spot. You also have a set time- usually around one to four months- to pay back the money you borrowed from the pawnbroker, plus any interest or money. If you cannot repay the loan, you lose your collateral, i.e. the pawned item, which the pawnbroker can then sell to make a profit. 

 

• The pawn-shop loans are an attractive proposition for those on the financial fringes for a couple of reasons. Not only can a pawn loan be obtained without a credit check, but the debt is relatively low risk. If you cannot repay the gold and silver pawn shop, you lose the item, but you won’t receive a black mark on your credit report. Compare that to high-interest payday loans which can easily trap customers in a spiraling cycle of debt.

• No matter how or where you ultimately choose to sell, start locally. Take your gold or silver to a reputable local jeweler or pawnshop and get the value estimated. That way, you will at least have a base price in hand before you solicit online bids or other offers.

• Beware of ‘rouge’ buyers, also known as a hotel or pop up buyers. Be cautious while dealing with these transient dealers, they might blow into town, run promising advertisements with higher prices and after vacuuming up the city’s worth of jewelry and coins, they disappear. Before you sell your precious metals thoroughly check the business and see whether there are any complaints against the buyer.

• Pay very close attention to how your gold is being weighed. While the accuracy scales of jewelers and pawn shops are verified periodically by the departments of weights and measures, the same may not be true in the case of hotel or house party buyers. Some buyers pay according to grams others might use a system called pennyweight. A seller needs to make sure that he’s not being weighed by pennyweight and paid by the gram since that would allow the buyer to get more gold for less money. 

 

• Sellers should compare terms and conditions carefully, before making the end decision. For example, some websites offer free shipping to send in gold but charge very high shipping rates if the seller declines the offer and asks for his precious metals to be returned.

• Check the license and the credentials of the buyer carefully. Ask the potential buyer to show you their credentials, if they are legitimate, they will be licensed by the state to buy gold.