It seems like wherever you go these days, there’s a business nearby offering cash for gold, from jewelry shops to mall kiosks. Actually, you don’t even have to leave the house: Plenty of mail-in services are ready to buy your unused jewelry or bullion coins.

But before handing over that old necklace, understand that some businesses may offer you quite a bit more than others. Though the global price for melted-down gold is published daily and easy to find (see Understanding Gold Quote Prices), sellers are only going to give you a portion of that sum. The more you know about how the buy-back industry works, the better your chances will be of getting a favorable deal.

Sell for Scrap?

First of all, try to determine the type of buyer for your piece. True, most items are valued for the amount of gold they contain (the melt-down value). But jewelry from high-end retailers like Tiffany & Co. or noted designers often has a collectible value above and beyond its scrap price, especially if it's an old piece. If you’re in doubt as to whether your item has any special cachet, it doesn’t hurt to get an appraisal from a reputable jeweler or a dealer in estate or vintage jewelry. The same goes for old coins: That gold dollar found in the back of Dad's closet may well fetch more than its face value, as a numismatist or coin collector will tell you.

Getting an expert opinion can also act an insurance policy of sorts. Should you decide to mail your gold to a company later on, and the piece gets lost en route, that appraisal acts as an indication of the item's worth. 

Know Your Seller

If you do end up selling, you can save a lot of time and aggravation by doing some basic research on potential buyers. If you’re planning to visit a local shop, pawnbroker or kiosk, first make sure it has the relevant licenses for a business purchasing metals in your state. The lack of them doesn't prove the place engages in deceptive valuing or predatory tactics, but it doesn't inspire confidence, either.

It’s also a good idea to do a quick search of the place with the Better Business Bureau. Keep in mind, though, that the rating system on the BBB site offers higher letter grades to companies that have been in business longer and have a lower volume of complaints. 

As an added precaution, you can also look for shops that are members of the Jewelers Vigilance Committee, an industry group that promotes ethical practices.

Know Your Piece

The next step is figuring out how much gold is actually in your jewelry. A humble kitchen scale will give you a ballpark approximation. Metal dealers use a special unit of measurement known as a “troy ounce.” At 31.1 grams per ounce, troy ounces are actually slightly heavier than the standard ounces your scale will provide (28 grams per ounce).

The weight doesn't reflect the exact amount of gold, however. The gold in most jewelry is actually an alloy (a mix of the yellow stuff and more base metals). Given gold's relative softness, a piece with no “filler” metals within it could damage quite easily. 

The “karat” rating indicates how pure the gold really is. A 24-karat item is 100% gold, while a 12-karat piece is only half gold. So, for example, a 5-gram ring made of 14-karat gold only contains 2.92 grams of actual gold (5 grams x 14 ÷ 24).

The good news is that jewelry often comes engraved with the karat grade already – 14K and 18K are the most common in better-quality pieces – though you may need a loupe or magnifying glass to spot it. If not, a jeweler can perform a test to give a pretty good approximation. You can also go online and find testing kits costing between $20 and $50.

Know the Going Rate

Once you’ve figured out how much precious metal is in your item, it’s pretty easy to look up the world spot price for gold using online resources like Kitco and Goldprice.

Chart. The global spot price of gold since 2000. 

Source: Kitco.com

Granted, the price you’ll find on these sites is not what you’ll get from a buyer, who has to factor expenses and profit margin into his or her bid. The more competitive ones will usually offer around 70% to 80% of gold's current market value for jewelry. Gold bars and coins usually reap a bigger payday – often more than 90% of their melt value. 

Even if you visit a buyer and get what sounds like a reasonable offer, it doesn’t hurt to shop around a bit. You can even play one buyer against the other, seeing if they’ll match or beat each other's quotes.

The Bottom Line

Lots of businesses are interested in buying gold, but the prices they offer tend to be all over the map. Consequently, you’ll typically snag a better deal if you walk in with a good understanding of how a piece is valued, what gold is going for – and how competitive the market is. What's your gold object worth? To a large extent, whatever someone is willing to pay for it.

For more thoughts, see How To Cash In Your Heirlooms.