Selling scrap gold: karats, hallmarks and how the payout is calculated

A drawer of broken chains, single earrings and outdated rings can hold a surprising amount of gold. Selling it as scrap is straightforward once you know how buyers value it: they pay for the fine gold it contains, not for the object. This guide explains what scrap gold is, how to read the stamps, how the offer is calculated and how to avoid the most common ways of being underpaid.

What counts as scrap gold

“Scrap” means any gold item that will be melted down for its metal content rather than resold as it is. Typical examples:

• broken or tangled chains, bracelets and necklaces;
• single earrings, damaged rings, bent clasps;
• old dental gold (crowns and bridges, usually an alloy containing gold);
• jewelry that is simply out of fashion and that nobody will wear;
• small bits and offcuts from jewelry repairs.

What scrap is not: gold-plated or gold-filled items. A thin layer of gold over a base metal contains very little gold, and most buyers will not accept it as gold scrap. Stamps such as GP (gold plated), GF (gold filled), RGP (rolled gold plate) or HGE (heavy gold electroplate) signal plated or filled items.

Reading karats and hallmarks

Gold jewelry is almost never pure. It is alloyed with other metals for strength and color, and the purity is shown by a stamp, usually on the inside of a ring or on a clasp. In the US the stamp is typically a karat mark such as “14K”; in Europe and the UK it is often a three-digit number giving the gold content in parts per thousand.

A small magnifying glass helps, as stamps wear down over the years. If a piece has no stamp at all, it is not necessarily fake, but the buyer will need to test it, and you should not assume a purity until it has been tested.

How the payout is computed

Scrap buyers use the same basic formula everywhere:

Payout = weight × purity × gold price per gram − buyer’s margin

The gold price used is based on the spot price, which is quoted per troy ounce (31.1035 g) in US dollars, or on the LBMA Gold Price set at 10:30 and 15:00 London time. The buyer’s margin covers testing, refining, handling and profit, and it is where offers differ most.

Worked example, using a hypothetical gold price of $2,000 per troy ounce and a hypothetical buyer paying 80% of melt value (illustrative figures only, not current market data):

1. Price per gram of pure gold: 2,000 ÷ 31.1035 = about $64.30.
2. You bring 10 g of 14k jewelry. Fine gold content: 10 × 0.585 = 5.85 g.
3. Melt value: 5.85 × 64.30 = about $376.
4. Offer at 80% of melt value: 376 × 0.80 = about $301.

The same calculation, done per karat, lets you check any quote in a few seconds. If a buyer cannot or will not tell you the weight, purity and price per gram behind its offer, that is a warning sign.

Tips for getting a fair price

1. Weigh at home first. A small digital kitchen or jewelry scale that reads to 0.1 g is enough to know roughly what you have. Weigh again in front of the buyer and compare.
2. Separate by karat. Put 9k, 14k, 18k and 22k pieces in different bags. If everything is weighed together, some buyers will pay the lowest karat rate for the whole lot.
3. Remove stones where you can. Gemstones, pearls and settings add weight but no gold value to a scrap buyer. Small diamonds may have value of their own; ask for them back or have them removed first.
4. Get several quotes. Offers for the same lot can vary widely. Compare at least two or three buyers on the same day, since the gold price changes constantly.
5. Ask for the calculation in writing. Weight, purity, price per gram and percentage paid should all be clear.
6. Be wary of mail-in schemes. Services that send you an envelope and post back an offer can be convenient, but some rely on low first offers that sellers accept because the jewelry is already gone. Keep photos and your own weights, check the return policy and how long you have to refuse an offer.
7. Keep valuable pieces out of the scrap pile. Signed jewelry from known houses, antique or period pieces, fine craftsmanship and items with collector interest can be worth far more than their metal. Have them assessed by a jeweler or auction specialist before selling them by weight.
8. Check identification rules. Many jurisdictions require gold buyers to record the seller’s identity. A reputable buyer will ask for it.

Scrap versus bullion

Scrap gold is the least favorable way to turn gold into cash, because the metal has to be tested and refined before it can be sold again. Investment bars and coins of known weight and purity are bought back on narrower margins. If you are thinking about the other side of the trade, see our guides to gold bullion buyers, gold bullion prices and gold bars.

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