In the last 5-6 years the number of new “Gold Refiners” opening doors had run
rampant. This happened as a result of the “Cash for Gold Craze” that swept the
globe.
Many of these new Precious Metal consumers or processors had little to no
experience in the industry, but saw it as a quick way to make a lot of money while
the kettle was hot. Often quoting pricing that is “too good to be true” and touting
false claims about “superior analytical methods” among other things, created a
very confusing dilemma for the Pawnbroker and Jeweler looking for the very best
outlet to sell their scrap gold accumulations.
After over thirty years in the Precious Metal Industry, having to now compete
against so many unethical operators was my motivation to develop this short but
concise list of suggestions to help the gullible gold seller “see through the
smoke”. Thus I present my 10 recommendations to maximize the returns on
your karat gold scrap and limit your exposure.
#1: Get References!
- When considering a refiner, make sure they provide you with several solid customer references that have been doing business with them for at least a year.
#2: Do the Math!
- When a refiner quotes you terms that seem too good to be true, chances are they are.
- Watch out for promises like:
- 99% with No Charges
- Free Shipping
- Free Stone Removal, etc.
- Is it a reasonable number that enables them to do all the required processing and analysis and still make a profit?
#3: Check Shipping Terms!
- If the refiner arranges for shipping, confirm how it is being insured (G4S, Parcel Pro).
- If refiner carries separate insurance, request an endorsement on their policy.
- Fed Ex and UPS do not provide insurance for Karat Gold.
#4: Pack Your Shipments Carefully!
- Double Box all shipments.
- Always include a packing list or invoice detailing your weights and a description of the contents.
- If you are requesting your lot be processed for Diamond and Gemstone Recovery, make sure your instructions clearly state that.
#5: Seek Representation!
- Visit the facility at least once to see what kind of assets they have, amount of personnel, equipment, capabilities and procedures that follow proper protocol.
- Do they have their own onsite lab?
- If representation or access to view their processing area is not allowed, you should avoid working with them.
- Lack of Insurance allowing you plant access is not a truthful excuse.
#6: Request Complete Data!
- Make sure your settlement provides all melt and assay data.
- Monitor your melt losses on each and every lot. Any un-dissolved metal or skimmings should be held, in case you require their return.
- Note: The refiner should explain Melt losses in excess of 2% without excessive stones or skims.
#7: Require an Umpire Provision!
- Make sure the refiner agrees to, and has provisions to enable a “third party assay” (Umpire) in the case of an assay dispute.
- Get their list of acceptable Umpire Assayers.
- Umpire Analysis should always be stipulated as Corrected Fire Assay methodology.
#8: Request Samples!
- Make sure to request customer samples be returned from every melt.
- Require the refiner to hold additional samples from each melt in case an umpire situation presents itself.
#9: Request Corrected Fire Assay!
- Insist that your assays are done by Corrected Fire Assay, when possible.
#10: Read All Terms Carefully!
- Don’t agree to contracts or terms that force you to have accepted their settlement as final by cashing their check.
Jack Brown’s 10 Recommendations to Maximize Returns on Karat Gold Scrap & Limit Your Exposure
1. Get References – When Considering a Refiner, make sure they provide you several solid customer references that have been doing business with them
for at least a year.
2. Do the Math – When a Refiner quotes you terms that seem to good to be true, chances are they are. Watch out for promises like: 99% with No Charges,
Free Shipping, Free Stone Removal. Is it a reasonable number that enables them to do all the required processing and analysis and still make a profit.
3. Check Shipping Terms – If the Refiner arranges for shipping, confirm how it is being insured (G4S, Parcel Pro). If a Refiner carries separate insurance
request an endorsement on their policy. Remember, Fed Ex and UPS do not provide insurance on Karat Gold.
4. Pack Your Shipments Carefully – Double Box all shipments. Always include a packing list or invoice detailing your weights and a description of the
contents. If you are requesting special services like Diamond and Gemstone Recovery make sure your instructions clearly state that.
5. Seek Representation – Visit the facility at least once to see what kind of assets they have, amount of personnel, equipment, capabilities and procedures
that follow proper industry protocol. Do they have their own onsite laboratory? If representation or acces to view their processing area is not allowed you
should avoid working with them. Lack of Insurance allowing you plant access is not a truthful excuse.
6. Request Complete Data – Make sure your settlement report provides all melt and assay data. Monitor your melt losses on each and every lot. Any
undisolved metal or skimmings should be held in case you require their return. Any melt losses in excess of 2% on lots free of stones or metal skimmings
removed should be explained.
7. Require an Umpire Provision – Make sure the Refiner agrees to, and has provisions to enable a “third party assay” (Umpire) in the case of an assay
dispute. Get their list of acceptable umpire assayers up front. When using an Umpire you should stipulate the analysis is done by Corrected Fire Assay.
8. Request Samples – Make sure to request customer samples are returned to you for every melt. Require the Refiner to hold additonal samples from
each melt in case an umpire situation presents itself.
9. Insist on Corrected Fire Assay – Other methods of analysis will not provide the same level of confidence and accuracy.
10. Read All Terms Carefully – Do not agree to contracts or terms that force you to have accepted a Refiners “Settlement Offer” as final by cashing their
check.