What To Expect When Pawning Jewelry

Brian McCracken


If you were curious to know what you should expect to happen when you take your jewelry into a pawn shop, then this post is for you!

My friends are always curious about the pawn industry. They don’t understand what it is that I do every day and I never really have a problem telling them.

The one question that does come up regularly however is, what should I expect when pawning jewelry?

They are typically asking about what we are looking at when examining the jewelry brought into the shop.

Sometimes they just want to know how we go about pricing jewelry. Other times, they want to “Know the secrets” about how we can tell right away when something is fake, gold plated, or not genuine in any way.

Well, all of these things are reasonable questions. I think that I will answer them all individually at another time though.

Instead the focus of this article will be all about what the average person can expect when they take their jewelry into a pawn shop to get a quick loan, or just sell it outright to them.

I suppose the best place to start with all of this is the basics about what kind of jewelry that pawn shops most often accept and why.

A lot of people are unsure what they should expect when they take their jewelry into a pawn shop. Don’t worry, it’s a very straight forward process. A pawnbroker will inspect your jewelry, determine the value of the metal it is made out of, taking the stones into consideration, and make you a fair offer based on it’s true value.

The Types Of Jewelry That Pawn Shops Accept

When it comes to what kinds of jewelry that pawn shops will typically accept, it normally all comes down to what type of metal the items are made out of.

Gold Jewelry

For instance, almost every pawn shop that I know of will gladly accept gold jewelry.

However, they will not accept gold plated jewelry.

The reason is that gold, as a precious metal, has significant intrinsic value and can be melted at any time to get the money back out of.

This is important in the event that the person who brought the items in has to forfeit them because they didn’t pay back in loan in a timely manner. (The time is determined by state law in your local area.)

The pawn shop can’t possibly resell all of the jewelry that comes in, so melting it is their best option to get the money back out of it.

However, when we are talking about gold plated jewelry, it’s not actually made out of gold.

Instead, the items are made out of another base or ‘Core’ metal and then a very thin layer of gold is applied to the surface of that base metal.

In other words, the majority of that item is actually something like aluminum or copper for instance, which has very little value and certainly not enough to loan against.

Silver Jewelry

While all pawn shops will take gold in, most will also take silver in as well.

Mind you, not all pawn shops take silver. The reason is that the value of silver is significantly less than the value of gold.

To put it in perspective, Gold is currently worth approximately $1,100 per troy ounce (which is 31.3 grams.) When you break that down, it’s worth about $35 a gram, and depending on if your item is 10 or 14 karat, that comes down to $14 and $20 a gram respectively.

Silver on the other hand is currently worth $14 per troy ounce. That comes out to about $0.44 a gram, or about $0.41 a gram for the sterling silver that most silver jewelry is made out of.

There’s a huge difference between $14-$20 a gram and 41 cents!

Since most rings only weigh a few grams, most silver rings are only worth $1-$3 in silver value.

That low value makes them hard to loan on unless you are bringing in a lot of it at a time, which some people do.

That having been said, even though they have difficulty making loans on silver jewelry, most pawn shops will often buy it.

Just keep in mind that it is not going to be worth a whole lot, and that’s not the pawnbroker “Ripping you off.” It just what the silver is worth, which is completely out of their control.

Costume Jewelry

Unlike jewelry that is made out of a precious metal like gold or silver, very few pawn shops will take costume jewelry in.

In case you aren’t sure what costume jewelry is, it is jewelry that’s not made out of a precious metal and doesn’t contain real precious or semi-precious stones.

It’s meant to be fake, which is useful if you are going someplace where you are afraid that someone might try to take your jewelry because it has almost no value.

That having been said, because it has no value, pawn shops have no interest in it.

How Pawn Shops Evaluate Your Jewelry

When you bring something into a pawn shop, you may have an appraisal with it.

Appraisals don’t really have any meaning to pawn shops. All that they are is a statement about what the estimated retail value of your item is when it’s new, from a jewelry store.

Jewelry stores have markups as high as 1000% in many cases, and a pawn shop can’t give you money based on another company’s markup.

What a pawn shop is look at is the actual value of the item itself.

That means the weight and purity of the metal, as well as the diamonds or other stones involved.

Gold & Silver Evaluation

Gold and silver are priced on an international level by their weight.

The standard measurement for gold & silver is what is known as a “Troy ounce.”

A troy ounce is 31.3 grams. So, when you see that gold is worth $1,100 an ounce (as it is at the time of this writing), you then take that number and divide it by 31.3 grams to determine the value of the metal at 100% purity per gram.

Gold & Silver Purity

Gold is typically made in 10k, 14k, and 18k for common jewelry needs. Each “Karat” is a measure of the gold’s purity.

That is, the amount of the metal that is actually gold versus other metals in the allow that makes up the ring.

These other metals can be things like copper, or even silver, which make the gold harder. Read more about how to determine the value of gold here: How Do Pawn Shops Price Gold

Silver is typically known as “Sterling” when it is made into jewelry. That is approximately 92.5% purity.

For more help in understand how the value of silver is calculated, read: How Do Pawn Shops Price Silver

How Pawn Shops Evaluate The Stones In Jewelry

The next major part of evaluating jewelry when it comes into the pawn shop is looking at the stones that may be in it.

Often times, you will have three types of stones.

  1. Diamonds
  2. Lab-made diamonds or fake diamonds.
  3. Semi-precious stones.

Diamonds are typically the only thing that pawn shops will really be concerned with, and of that, typically only diamonds that are approximately .25 carats or larger.

To understand how diamonds are evaluated at pawn shops read: How Pawn Shops Price Diamonds

Lab-made stones have basically no value at pawn shops. To understand why that is read: Will A Pawn Shop Take A Ring With A Lab Created Diamond

Fake diamonds have absolute no value at all to a pawn shop. To understand more about that, read: Do Pawn Shops Buy Cubic Zirconia

Semi-Precious or colored birth stones have very little value to a pawn shop typically (except for rare exceptions). To understand more about that, read: Do Pawn Shops Buy Semi-Precious Or Colored Birth Stones

A quick primer on this is that pawn shops will pay for diamonds based on their size and quality, and no other stones will really be taken into account under most circumstances.

How Pawn Shops Come Up With The Final Price On Your Jewelry

So, looking at all of these things, the pawn shop will combine the total value of the metal (gold or silver) with the total value of the stones and make their offer based on that.

Typically speaking, their offer will be between 60-70% of the final value that they calculate, and it may be higher if they are buying it as opposed to just loaning on it.

The reason for that is two fold.

The Price Of Metals Move Daily

When you make a loan on your items at a pawn shop, it may be 3, 4, 6, or even 12 months before the items forfeit and the pawn shop has to melt them to get their money back out of it.

In all of that time, the price of gold or silver may drop significantly.

In the event that gold was worth $1,100 when they made you the loan, and then when the loan forfeit, it was only worth $800 – the pawn shop would have lost a lot of money by making you that loan at the full value of the metal.

Obviously no business, including pawn shops, exist to lose money. So for that reason, they have to offer you less than the going market price because ultimately, they have no idea if you will pick your items back up and when.

Reasonable Profit Margin

As previously expressed, pawn shops aren’t in business to lose money.

Because of this, they have to make you an offer that is slightly lower than the market price of the jewelry because they are in business to make a fair profit.

There is a lot of confusion on this point however because when someone buys a ring at a jewelry store, they might pay thousands for it.

However, jewelry stores have a huge markup (sometimes 1000%!), and a pawn shop can’t pay you for another businesses profit margin – they can only pay you for what the item is actually worth.

Because of this discrepancy in prices, people assume that pawn shops “Rip you off” but that’s not at all true. They are just giving you a realistic price for your item based on it’s actual value – not it’s marked up value in a jewelry store.

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