Question 1

What is a fair scrap gold payout percentage?

Accepted Answer

A payout of 85-95% of melt value is generally considered fair for scrap gold from a reputable local jeweler or gold buyer. Pawn shops and mail-in services typically offer 70-85%. Anything below 70% is unusually low unless there are specific issues with the gold's condition, questionable purity, or unusual refining costs. The KaratWorth Scrap Gold Calculator shows you the expected payout range based on your gold's weight and purity, so you can evaluate any offer before accepting it. Always get quotes from at least 2-3 buyers before selling.

Question 2

Why do scrap gold buyers pay less than 100% of melt value?

Accepted Answer

Scrap gold buyers pay less than melt value because they must cover several costs before reselling the gold. These include: refining and assay fees to verify actual purity (which can range from $20-50 per batch), business overhead like rent, staff, and insurance, market risk since gold prices fluctuate daily while they hold inventory, and their own profit margin of typically 5-15%. A local jeweler who plans to melt and reuse the gold may offer 90-95%, while a refiner who must ship to a smelter might offer 80-88%. Understanding these costs helps you negotiate confidently and recognize truly lowball offers.

Question 3

What is the difference between melt value and buyer payout?

Accepted Answer

Melt value is the theoretical worth of the pure gold content in your item based on weight, purity, and the current spot price of gold. It represents 100% of the gold's metal worth with no deductions. Buyer payout is what a dealer actually pays you, which is always less than melt value because the buyer must cover their costs and make a profit. For example, if your gold ring has a melt value of $500, a fair buyer payout would be $425-475 (85-95%). The KaratWorth calculator shows both values so you can see exactly what margin the buyer is taking.

Question 4

Should I get my gold tested before selling it as scrap?

Accepted Answer

Yes, always have your gold tested or certified before selling as scrap. Many buyers use acid testing, electronic testers, or XRF scanners to verify purity on the spot. If your jewelry is stamped 14K but tests as 10K, the buyer will pay based on the actual purity, not the stamp. Some unscrupulous buyers may claim your gold is lower purity than it actually is to pay you less. Independent testing at a jewelry store or appraiser before selling gives you confidence in negotiations. Bring the test results with you when getting quotes.

Question 5

Where is the best place to sell scrap gold for the highest payout?

Accepted Answer

The best place to sell scrap gold depends on your location and timeline. Local independent jewelers often pay the highest rates (85-95% of melt) because they can melt and reuse the gold in their own workshop. Gold-buying specialists and pawn shops typically pay 75-85%. Mail-in services and TV-advertised buyers often pay the lowest (65-80%) due to higher overhead and shipping costs. Online marketplaces like eBay can yield higher prices for pieces with collectible or designer value. Get quotes from at least 3 sources and never feel pressured to accept the first offer.

Question 6

How do I calculate the value of broken or damaged gold jewelry?

Accepted Answer

Broken or damaged gold jewelry still has full melt value as long as the gold purity is unchanged. The KaratWorth Scrap Gold Calculator works the same way for damaged pieces — just enter the weight and purity as usual. Damage does not reduce the gold content. However, if clasps, stones, or non-gold components are attached, you should either remove them before weighing or estimate their weight and subtract it. A digital scale measuring to 0.01g accuracy is essential for accurate calculations. Remember: a broken 22K gold chain has the same melt value as an intact one of the same weight.

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