One of the things few people really understand is what a pawn shop does with your jewelry after they buy it. What do they do with it if they aren’t selling it to a buying customer that walks in the door?
The truth of the matter is that it’s not nearly as glorious as you might think it would be.
9 out of 10 times a pawn shop will just sell their scrap metal to a company that is known as a ‘refiner.’
A refiner will take all of the rings, necklaces, bracelets and other items and melt them.
Truly professional outfits will then begin to remove impurities from the metals until they get something close to pure gold or pure silver.
Of course, they aren’t able to get it to 100% purity, but typically they will be able to refine it to 98-99% purity.
How Do Pawn Shops Sell Their Gold And Silver?
The process of dealing with refiners is normally very easy. It all starts with a phone call and talking to the refiner to figure out what their intake process is and what criteria the pawn shop may need to deal with them.
Assuming the the pawn broker satisfies any requirements the refiner has, they will typically ship the refiner the jewelry and the refiner handles the whole process from there. Within a few weeks the pawn broker will be sent a check for the gold or silver that was recovered from the jewelry they sent in.
How Much Do Pawn Shops Get Paid?
If you’ve read our blog for any length of time than you know that pawn brokers buy jewelry based on it’s weight and ‘spot’ value. That ‘spot’ value is based on the price of gold in the stock market on that particular day.
Well, the same thing goes for pawn shops when they sell their gold to the refiner. The refiner will weigh the gold, determine it’s purity and then send the pawn broker a check for the amount of actual gold that they sent it.
Of course the refiner will typically take a fee out of the settlement check to cover their costs – which is how they do business. These fee’s vary but are typically between 2-10% of the total value of the parcel sent.
Can Anyone Send Jewelry Into A Refiner?
You might ask yourself why you don’t just send your gold or silver jewelry directly to the refiner instead of taking it to the pawn shop.
Unfortunately it’s not that easy. Refiners will typically have minimum quantities of metals that they will accept and work with.
They normally will want several pounds of the material to work with and very few of us have pounds of gold sitting in our jewelry boxes.
So, unfortunately it’s just not possible for individuals to deal with refiners on a case-by-case basis.
That About Does It…
If you have any questions or comments about how refiners work feel free to leave me a comment in the comment field below and I’ll be happy to get back to you as soon as possible. Thanks for everything, The Head Nerd
