Akshaya Tritiya 2022: Selling old gold jewellery? Getting cash in return is difficult

If you are looking to sell an old jewellery piece, then make sure you have the old invoice.

If you are among those who wish to buy gold jewellery this Akshaya Tritiya, then just pause for a moment and read this.

When the price of gold shot up to Rs 48,000 per 10 grams on March 27, interior designer Sharanya Sudha headed to her local jeweller.  

Sudha, 43, wanted to sell her wedding jewellery, which she had purchased in 2004, when prices were around Rs. 6,400 per 10 grams. 

On paper, she had an annualised return of 11.87% over 18 years, but realising the value of the 82 gram gold necklace and a set of gold bangles wasn’t easy. 

“As my mother had lost the bills for the jewellery, I didn’t know which shop she purchased it from, in my native place. The jewellers I visited declined to offer cash in exchange for the jewellery,” Sudha said. 

Many like Sudha have been told that gold is a safe haven and  offers protection during difficult phases of life so they should park all their extra funds in such tangible assets. 

But when Moneycontrol.com visited 25 jewellery shops in Tier 1 and Tier 2 cities to check on the day the price of gold touched Rs 48,840 per 10 grams, all refused to offer cash in exchange for gold jewellery. 

They were ready to offer new jewellery equivalent to the weight of the old jewellery. This reporter offered to sell some of her gold coins, which too were rejected. Forget gold, there were no takers for even cheaper metals such as silver in exchange for cash. 

Also read | Why digital gold is not a good option

Why you can’t sell it to jewellers?
One thing that needs to be understood is that most jewellers in India are gold retailers. Just like everyday goods aren’t purchased back by retailers, these jewellers too don’t accept old jewellery.

Also read | All you need to know about free insurance offered by jewellers on gold purchases

“Jewellery retailers will not accept old jewellery. There are specific jewellers who accept old jewellery and they display this fact outside their stores. So, in Mumbai jewellers around Zaveri Bazaar and Opera House would accept old gold in exchange for cash,” says Rajiv Popley, director of the Popley Group of jewellers. 

Price of selling
Even at these stores, you may or may not be able to unlock the value of your gold. When this reporter asked one of the jewellers why he would not accept the jewellery, he said: “The price of gold has increased for external factors like war and oil price movement and uncertainty. This trend will be reversed shortly. We will be at a loss.” This jeweller tried to dissuade her from selling the old jewellery on the day the metal’s price peaked. 

Since buying rate and selling rates are different, it’s tough to recoup the value of your precious metal. You can check the selling rate (amount at which you purchase it) rate and buying rate (price of gold purchased from you). You can get the rates from the Indian Bullion and Jewellers Association website and social media handles. A missed call to 8955664433 too can help you with the rates of the day. 

Invoices
If you are looking to sell an old jewellery piece, then make sure you have the old invoice. Head to the same jeweller to sell the piece with the invoice and you would have a better chance of getting cash in return for the jewellery. 

At least 20 retailers declined to accept gold jewellery that hadn’t been made at their own store. How can they gauge the difference? 

Well, apart from the purity mark and the hallmarking mark, jewellers have been etching their own store symbol on every jewellery piece that they craft. 

“Apart from purity and make, valid invoices also tell a jeweller that the gold is genuine and doesn’t come from questionable sources,” said Popley. 

Non-hallmarked jewellery
Since hallmarking has been made mandatory in India only for the past one year, your old jewellery may or may not be hallmarked. 

If you as an individual were to ask a jeweller to hallmark your old gold and then accept it, they aren’t ready to accept it out of fear that the old metal would be of lower caratage.

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“The low caratage value affects the image of a jeweller as we have a registration number with the BIS (Bureau of Indian Standards) and the piece is notified under that registration number. We can’t accept this non-hallmarked piece,” a person from LMS Jewellers said to moneycontrol.com.   

Gold jewellery is not investment
In conversations, many jewellers said buying jewellery was not investment in the metal, which they added should be treated as an ornament.   

“Jewellery is sold as adornment and gold bars and coins, etc are sold as investment. If a customer has purchased gold jewellery, paying for the design, making and other parameters over and above the market-linked value of the gold alone, then she is in the adornment market… Money being offered is not the focus, in that case,” says Nishit Nanda, executive director at Khimji Jewels and CEO, Youlry.com. 

When you purchase jewellery on online platforms, the mode of payment and source of the metal are also taken into account when you attempt to resell the gold. 

“In online, the money cannot be returned to the original payment mode, months or years after the sale. One more reason of course is the security and validation of the transaction. There are many online platforms for direct and indirect investments in gold. An online gold jewellery store is not one of those options,” added Nanda.  

Better alternatives
So, if you are looking to accumulate gold for a future goal such as a child’s marriage or for investment purposes, then gold exchange traded funds (ETF), gold savings funds (mutual fund schemes) and sovereign gold bonds (SGB) would be your ideal investment avenues. 

ETFs offer a liquidity option and immediate selling option on trading days and SGBs provide interest twice a year. While a demat account is essential to invest in ETFs and SGBs, those who do not have a demat account can opt for gold savings funds offered by mutual funds. 

Alternatively, you can consider purchasing gold in commodity exchanges during dips in small unit lots.