The reasons for surrendering gold are different for everyone. Someone urgently needs money for treatment, loan payment, or an unexpected purchase. Some people get rid of broken or tired jewelry this way. I will tell you how to profitably hand over gold to a pawnshop, what is better to pawn or sell.
Below you will find comprehensive information about collateral options, required documents, learn what to look for when choosing a pawnshop or buying one, and how the price per gram is formed.
Where can I donate gold?
There are a lot of places where gold items are accepted. You can get money for precious metals at a pawnshop, a thrift shop, a thrift store, a bank, or from collectors. Where to go depends on the type of product and the desire to buy the product. For example, banks buy bullion from individuals. Collectors will give the best price for coins.
But most often the items that are handed over are jewelry. In this case, two popular options are purchasing and pawnshop. Let's talk about them in more detail.
Pawnshop
The essence of its activity is to issue a loan for a certain period secured by valuable property. A jewelry pawnshop must have a license to carry out pawnshop activities from the Central Bank, a certificate of state registration, and a specially equipped safe for storing items accepted from clients.
Determining the value of the jewelry and the maximum loan amount takes a few minutes. You can’t borrow all the money, but only the amount you need, on which interest will be charged. Until the end of the contract, the company undertakes to store the product safe and sound. If the deadline has passed and the surrendered product is not redeemed or interest is not paid, the financial institution sells the collateral, thus covering its losses.
Purchase
Such organizations accept jewelry under a purchase and sale agreement without the right of further repurchase. This means that you cannot hand over an item and pick it up after a certain time. Money is issued immediately depending on the weight and purity of the precious metal. The price per gram when put up for sale is slightly higher than what is offered in pawn shops.
Buyers accept jewelry in any condition. They will not take nuggets, gold dust, or ingots.
Buying activities are also subject to licensing. Illegal purchases are not uncommon. To avoid falling for scammers, I advise you to pay attention to the availability of permits.
What are the differences between a pawnshop and a purchase
A pawn loan is issued for a specific period. Usually for a week, maximum a month. After this time, the client, who is also the borrower, pays the interest and takes the gold. If you do not plan to pick up the returned item, notify the employee immediately. The pledge agreement will be issued for a minimum period.
The purchase does not provide for the right of redemption. You can only hand over your jewelry without returning it. This is the main difference. A pawnshop is an organization that issues a loan under a collateral agreement. The purchaser acquires under a purchase and sale agreement.
Official registration of the license
Rules that must be followed when registering:
- the name indicates the word “pawnshop”;
- the premises should not be residential;
- the type of activity is selected in accordance with No. 196-FZ;
- Availability of authorized capital – 10,000 rubles;
- registration of a license: the pawnshop must be registered in the register of the Central Bank.
To obtain official status, you must submit an application and pay a state fee. Moreover, it is recommended to complete these actions before July 9, 2021, then the organization will not be able to carry out the functions of a pawnshop.
Buying is also coming out of the shadows. In 2021, Russian President Vladimir Putin signed a law on licensing such organizations. They must apply to be included in the register by January 1, 2022.
Advantages and disadvantages of pawnshop and buying
Advantages of pawn lending:
- Quick assessment, execution of an agreement, and therefore receipt of cash.
- Minimum documents - you only need a passport.
- Early redemption with interest recalculation is available.
- Your credit history with other financial institutions is not important.
- The most important thing: having handed over products that are valuable to you, you do not lose them and have the opportunity to buy them back.
The disadvantage of such a loan is the high interest rate for using the money. And prices per gram are significantly lower than market prices.
The advantage of buying is the high cost per gram. As a rule, they give 10-50 rubles more than in a pawnshop. The issuance of money also occurs quickly and is completed with a minimum of documents. Disadvantages:
- The terms of the transaction and the legality of the buyer’s activities are not always transparent.
- Delivery of products without redemption.
What are the guarantees for the return of valuables to the owner?
In accordance with Article 358 of the Civil Code of the Russian Federation and the Federal Law “On Pawnshops” No. 196-FZ of July 19, 2007, the borrower receives a pledge ticket, which reflects all the data about a specific transaction.
A pledge ticket is a document that confirms the client’s ownership of the jewelry pledged as collateral. To return valuables back, the pledgor must provide a passport and a pawn ticket to the pawnshop. This guarantees the owner of the jewelry the return of his property, since the issuance of valuables is possible only in the hands of the owner or his representative with a notarized power of attorney.
Ways to donate gold to a pawnshop
The choice depends on the desire or unwillingness to buy back the pledged product. A pawnshop can offer two options - collateral with the right of redemption or an unsecured option.
Pledge
Pawnshops usually accept gold for a certain period of time. Based on the estimated value of the item, the client will be given cash. The pledge agreement is concluded for a certain period. Upon completion, the borrower undertakes to buy the product or renew the contract by paying interest for the past period.
If it is not possible to repay the loan amount with interest, the company waits for the client under the collateral agreement for some time, usually no more than a month. After which the surrendered item becomes the property of the pawnshop and is sold.
No collateral
In this case, a purchase and sale agreement is concluded. The gold becomes the property of the pawnshop immediately after the money is issued. The very next day the jewelry can be put up for sale, naturally at a higher price.
Per gram of precious metal they give more than with a pledge agreement. The condition of the decoration is not taken into account. Everything is accepted at the price of scrap.
What is the difference
Each option has its pros and cons. The difference lies in the client's desire to keep the gold. Depending on this, a pledge or purchase and sale agreement will be drawn up. In the latter case, the price per gram will be offered more, because the pawnshop does not have to wait for the loan to be repaid.
Restrictions
Pawnshops do not accept products and items prohibited by law as collateral, even if they have jewelry or other value. For example, it is prohibited to pledge:
- poisons;
- weapon;
- things with high background radiation;
- medals, orders, other signs of military valor;
- jewelry that is included in a special list approved by the state;
- food products;
- cultural and historical values, in respect of which the authorities prohibit the use of collateral to maintain state security.
According to Russian legislation, pawnshops do not have the right to accept real estate as collateral: houses, apartments, dachas and other buildings. They are also prohibited from doing business. Only issuing loans secured by valuables and consulting activities.
It is also prohibited to enter into transactions with minors. The collateral property can be collected either by the citizen himself who completed the transaction, or by another adult person with a notarized power of attorney.
Pawnshops cannot pawn items pledged. Institutions are also prohibited from using or renting out existing mortgages. In case of damage to the property pledged, the pawnshop is obliged to compensate the cost of the damage caused.
Funds issued by pawnshops can be used by the client for any purpose. All restrictions at this point are unfounded.
Sell or pawn – which is more profitable?
When selling gold jewelry, you will get more money than by selling it with the right to buy it. This is a short term benefit.
I advise you to immediately assess your financial capabilities in the future. Interest is accrued daily on the amount of the loan issued. If your financial situation improves in a week, a month or a long period of time, then it makes sense to pay the interest and subsequently return the jewelry that is dear to you. However, if no income is expected in the near future, you risk losing gold, and:
- Get less money when you change.
- You might even pay interest one or more times.
When the client cannot pay, the pawnshop will wait a little and sell the gold anyway. This scenario leaves the owner of the surrendered gold in the red, because the amount received as collateral is reduced, plus interest is paid for use.
Also keep in mind that the cost of precious metals has been steadily increasing over the years. In a year, for example, you can get much more for the same weight. I advise you to take this factor into account before handing over your gold forever.
Lost ticket
What's the worst thing that can happen after you take your gold to a pawnshop and return it? According to consumer reviews, this is the loss of a security ticket. However, according to pawnshop employees, this is a completely solvable situation. If the security ticket is lost, stolen or unreadable, you can get a copy of it. To do this, a statement is written according to the sample, which will be issued at a pawnshop, after which the owner of the pledged property will be given a duplicate.
Important information: to obtain a duplicate security ticket, a passport is required, and it is issued only to the owner of valuable property. If he is unable to come on his own, then a legally issued power of attorney for another person is needed.
What do you need to take precious metals to a pawnshop?
Precious metals are accepted only from adults with a passport. It will be useful to understand whether you want to buy back the pawned jewelry in the future. You will need the collateral itself. You can grab preserved tags and certificates.
Submission rules
First of all, the appraiser will ask whether you plan to pick up the product. The type of contract and its duration depend on this. To complete the transaction and issue money, the appraiser determines the authenticity of the precious metal and its purity. Evaluation and weighing must be carried out in the presence of the client.
Persons over 18 years of age can apply for a pawn loan or hand over gold by presenting a passport. Valuables not redeemed upon expiration of the contract become the property of the pawnshop.
What kind of gold can be donated?
Jewelry, coins, orders are accepted in any condition, including scrap. It is not necessary to have the stamp of the state Assay Office or the manufacturer's stamp. The appraiser will determine the type of metal and its sample using reagents.
Samples from 333 to 999 in the metric system are accepted. The minimum weight of a product or individual part is 0.1 g. A smaller part simply cannot be verified for authenticity.
Some pawn shops have appraisers on staff who understand stones. They will be able to evaluate the donated rings, pendants with precious and semi-precious stones. In others, money will be given for the net weight of gold, after having previously taken away the approximate weight of stones. You will not be able to hand over gold leaf, weapons, ammunition, laboratory glassware, nuggets, or gold dust.
How does the delivery procedure work?
Obtaining a pawnshop loan proceeds according to the following scheme:
- Providing the client with a passport and collateral.
- Weighing the product with an accuracy of 0.01 g.
- Authentication and proofing.
- Announcement of the maximum possible amount to be issued.
- With the client's consent, preparation and signing of documents.
- Receipt by the client of money, a copy of the pledge agreement, and a receipt.
What do people pay attention to in a jewelry pawnshop?
The appraiser will pay attention to the following parameters of the gold product:
- weight, purity (the larger and higher, the more expensive);
- appearance, condition (presence of scratches, deformations, other defects);
- design, brand.
Selling precious metals
How to hand over gold to a pawnshop without returning it? In essence, we are talking about a regular sale. And it should be noted that a pawnshop is not the most profitable way to sell. There are plenty of other alternatives, for example, you can go to a thrift store, a consignment store or a jewelry store. However, sometimes pawnshops offer a good rate - it depends on the specific establishment. Therefore, before selling, you should contact several places in order to find out how much and where you can sell the gold item.
If a more attractive offer was at a pawnshop, then the seller will need a passport and, if available, a certificate or jewelry tag. The latter is not necessary, but with such papers there are fewer questions about the authenticity of the metal. They also indirectly confirm that the seller is the owner of valuable property.
A passport is required. Firstly, to make sure that the seller is over 18 years old. Secondly, everyone who sells gold is entered into a special register book.
How to hand over gold to a pawnshop without ransom? In the presence of the client, the pawnshop worker weighs the gold and checks for the presence of a hallmark. In the case where there is no embossing, the receiver makes a small notch on the gold or checks the metal chemically, so that small marks remain on the product.
When the sample and weight are established, the pawnshop employee recalculates these parameters into monetary units, for example, if for 1 gram of 585 sample they offer 1,500 rubles, then a ring weighing 2 g will be valued at 3,000 rubles.
Factors affecting cost
The price per gram of gold in a pawnshop depends on the fineness of the gold alloy and the category of the product. Whole, exclusive, high-quality branded jewelry is valued at more than scrap.
The maximum amount possible for issue is calculated based on the Lombard rate of gold of a certain standard, category and net weight. When calculating, the weight of stones, base metal inserts, and contaminants is subtracted from the total mass.
The repayment period of the loan received also affects the cost. The longer the contract period, the greater the risks for the pawnshop, which means the lower the amount per gram.
Many organizations have discount programs for their clients. A regular customer card gives better conditions and a larger amount.
How is a gold item appraised?
The client must see the process of receiving, weighing and testing gold. Weight is measured on ultra-precise scales with an accuracy of hundredths of a gram.
To determine the sample, a small cut is made, into which the evaluator drops a chemical reagent. Based on the reaction of the alloy and the degree of burn, the ratio of pure gold and impurities present in the alloy is determined.
Remortgage service
In essence, this is an extension of the contract term. If the time for redemption has come and there is not enough money, you can only pay the interest for the past days. The pawnshop will postpone the redemption period and issue you another agreement with new dates.
Along with interest payments, it is possible to repay part of the loan amount. The advantage of such partial repayment is that the loan amount is reduced, and therefore the accrued interest.
Short description
It is important to be able to distinguish a real pawnshop from a consignment store or a regular purchase of things. To do this, you need to know how this system works. First of all, all institutions of this type must have a license to operate.
Pawnshops are prohibited from selling pledged items before the expiration of the period for which the valuables were pledged. At the conclusion of the transaction, the collateral owner is given a personalized collateral ticket. The type of this document is approved by the Ministry of Finance of Russia. The institution independently insures the item for the period while it is stored in the pawnshop. The financial institution does not have the right to force the client to pay for insurance.
The essence of the activity is that the client provides value and receives cash for it. Other details are specified in the contract. In addition, for each client, the pawnshop draws up an inventory of the property deposited for storage with a detailed description of the condition of the item at the time of application.
Tips on how to donate gold
Before going to a pawnshop, decide how valuable the product is to you and whether you want to buy it back later. Based on this, choose a suitable organization - a pawnshop or a purchase.
When going to a pawnshop, don’t forget your documents. Without a passport, the contract will not be executed.
I advise you to monitor several companies, find out prices, terms of registration, percentage. This information can be easily found on the Internet on the websites of organizations offering similar services.
Choosing a pawnshop: where is the best place to donate?
Determining the place where to carry gold as collateral should be approached responsibly. Otherwise, there is a risk of ending up with a shell company that will cease to exist by the time the buyout time comes. I advise you to choose a pawnshop that is not only profitable, but also reliable.
Pawnshop activities are subject to licensing. Copies of the permit to provide services and the certificate of state registration must be in an accessible place for review. I advise you to find out how long the organization has been operating on the market, what reviews clients give about its work.
Company verification
Reliable pawnshops, as a rule, have been operating on the market for a long time and have a wide network of branches. Their permitting documentation is in order, the terms of transactions are transparent, and there are no hidden fees. You should be wary of a too high gold rate if it differs significantly from those offered by competitors.
Terms of a transaction
The procedure does not take much time. It will take no more than 20 minutes to familiarize yourself with the conditions, evaluate the delivered item, draw up and sign an agreement, and receive money. Gold can be pledged or sold only with an identification document. Some purchases accept, in addition to passports, driver's licenses and international passports.
A properly executed contract must contain the following conditions:
- redemption period;
- accrued interest for use;
- possible fines, penalties for late redemption or payment of interest;
- terms and procedure for transferring the surrendered property into the ownership of the pawnshop.
Features of receiving luxury jewelry
If you are planning to pawn an expensive piece of jewelry with diamonds, and at the same time count on an adequate amount, then it is worth spending time searching for a specialized institution that purchases luxury jewelry. This task is not easy, because there are few such organizations.
However, in standard pawn shops, jewelry will be valued only based on the weight of the materials from which it is made. With a high degree of probability, they will not take into account the rarity and purity of the stone, as well as the fame of the brand that made the jewelry. As a result, you will receive no more than 10% of the actual cost of the product.
In specialized pawnshops that work with valuable jewelry, the value of the product is assessed according to many criteria . In this case, factors such as:
- Size of stone . Products with large stones are priced more expensive. That is, you can earn more for a ring with one large diamond than for a product with many small stones.
- Quality and color shade . Pure colored diamonds have the highest value.
- Elite brand . Each piece of jewelry has its own manufacturer, but we are talking about the luxury of the brand. As a rule, these are foreign manufacturers. However, each pawnshop has its own list of preferred jewelry brands, and this information should be clarified in advance.
- Aesthetic value . The originality of the jewelry design is of considerable importance when assessing. This is especially true for antique jewelry. Earrings from a limited collection will be valued significantly more than similar products of a standard design.
Reference! In general, handing over precious stones to a pawnshop is not very profitable for the client, however, in specialized institutions that accept exclusively elite jewelry, you can get a very decent price for your jewelry - up to 70% of the cost.
Is it possible not to buy gold from a pawnshop?
The client is not obliged to redeem the gold item returned with return. Despite the fact that the terms of repurchase are specified in the contract, no penalties are charged for refusal to repurchase. After the storage agreement ends, the deposit will wait for the client for some time. During this period, increased interest is charged on the loan amount issued.
The pawnshop will wait if the client has expressed a desire to buy the product, but asks to wait a little, or there is no contact with him. In case of failure to pay at least interest within the period specified for deferment or refusal to repurchase, the pledged property becomes the property of the organization. The donated gold will be sold in a store, at an auction or at a jewelry factory for melting down.
Next, see how buying gold works:
What happens to collateral if it is not applied for?
The pawnshop provides the opportunity to resell jewelry that its owners did not ask for. It is considered correct to immediately warn the organization’s employees that there is no opportunity to buy the item. When leaving the pawnshop, you need to prepare for the subsequent actions that will be performed with the decoration:
- sale in jewelry stores: if the item is well preserved, after cleaning and polishing it can be sold, such stores belong to pawnshop owners, it is customary to sell items there (and quite expensively, as for used items) that were not returned to the owner, but the price is still lower compared to new jewelry;
- auctions for branded items: such events and organizations, operating on an ongoing basis, are also most often the result of the activities of pawnshops, they allow you to sell branded jewelry at a high price; there are also more famous organizations that conduct such auctions;
- sale of scrap to factories: products that have lost their attractiveness, are broken, but contain a significant proportion of gold, can acquire a second life; scrap of precious metals is resold to jewelry factories for melting down.
How and where do pawn shops sell gold later?
Large pawnshop chains have their own jewelry stores where they offer unredeemed jewelry for sale. The advantage of such stores is that the price of high-quality jewelry is lower than in retail chains.
Unique, branded or antique items are sold at auctions. The one who offers the highest price can buy them.
Pawnshops sell broken, unsalable, and deformed items to jewelry factories and factories. There the scrap is melted down and new jewelry is made.
What you can't take
When a person pawns certain things, he may get into trouble, because some items are prohibited from being handed over. Pawnshops that operate officially (have a license) will not accept them. List of prohibited things:
- medals with valuable metals;
- Gold leaf;
- jewelry blanks;
- dentures, elements from them;
- precious metal for industrial use;
- small gold waste (shavings, etc.);
- nuggets, ingots, wire, gold concentrate.
Jewelry companies are interested in buying gold from pawn shops
For jewelry factories and private jewelers, buying gold at a pawnshop is a profitable option for obtaining raw materials. This is a mutually beneficial cooperation. The pawnshop needs to sell unredeemed collateral items.
For jewelers, scrap gold is cheaper than bank bullion. Its price does not include VAT. According to the Tax Code, a pawnshop does not pay value added tax, since the sale is considered to have arisen from the pledgor.
So, I told you about all the nuances of the pawnshop’s activities. You learned how the procedure for registering a pledge and appraising a product is carried out, what documents are needed to hand over gold, and how to choose a pawnshop. Subscribe to our updates so you don't miss anything interesting. And don’t forget to share with your friends, because this information may also be useful to them.
Question-answer section
What to do if there is not enough money for the ransom?
Expert opinion
Zilbertrud Dmitry
Lawyer, legal bureau "Verdict", Voronezh
Pawnshops may wait to sell items if the owner warns of delays. You need to prepare for an increase in interest rates during this period. This applies to products of various types, including the most common (585 samples). It is necessary to find funds by all means to return the gold, otherwise you can lose it forever, since the maximum period after extending the redemption period is 1 month.
Is the price of gold the same in pawn shops? How to choose an honest one?
Expert opinion
Pribrezhny Gennady Valentinovich
Jeweler 6th category
The cost in pawnshops that are licensed by the Central Bank is approximately the same, with some exceptions. You can choose any of them, but it is better to enter into an agreement with organizations that already have a reputation, and a good one at that. It is recommended to study reviews of pawn shops in your city. Today, users leave their impressions of cooperation with various organizations. Such a system works not only in the Russian Federation, but also in Kazakhstan (Astana and other cities), in Belarus, etc.
What other documents can I provide besides a passport?
Expert opinion
Grishanov Mikhail Petrovich
Jeweler, director of the Grishanov and Co. workshop
Most often, a passport is enough. But some of the organizations offer advanced features. You can present a foreign passport, military ID or driver's license. In order not to waste your time on a trip to a place where loan conditions are more stringent, you need to first clarify by phone what documents will be required.
At what age can you go to a pawnshop?
Expert opinion
Zilbertrud Dmitry
Lawyer, legal bureau "Verdict", Voronezh
Only an adult citizen of the Russian Federation can receive a loan against collateral. At the same time, none of the organizations makes exceptions, since the work of pawnshops today is gradually being brought out of the shadows, all actions can be verified. Some of them even refuse to cooperate with potential clients under the age of 21.
Gold jewelry and Russian passport
What to do if your deposit ticket is lost?
Expert opinion
Zilbertrud Dmitry
Lawyer, legal bureau "Verdict", Voronezh
Pawnshops that accept gold as collateral for a loan maintain cash books where all receipts must be reflected. If you lose your deposit ticket, you must contact the organization that provided the funds again. You need to have your passport with you.
Types of pawnshops
Pawn shops vary in the type of collateral they accept. The most common are:
- jewelry;
- acceptance of technology;
- antique;
- clothing;
- automobile.
Jewelry
Products made of precious metals, pearls, amber and precious stones are accepted as collateral. The authenticity is verified by an appraiser using special equipment. Such products are highly liquid. They are easy to sell at any time and lose little value over time.
Therefore, up to 80% of the market value of jewelry can be given in cash. But some pawnshops work with any jewelry as if it were scrap. Therefore, he accepts them at reduced prices.
Equipment pawnshops
They issue loans for household appliances. The product is not as liquid as other types of collateral. Equipment quickly becomes obsolete and loses value. Pawnshops are more willing to accept products that are in perfect condition and preferably within the warranty period.
Cash can be issued from 30 to 45% of the market value. Most often, expensive smartphones, tablets, laptops, and less often household appliances are pawned.
Antique
Pawnshops of this type offer clients amounts of up to 60% of the cost. Objects of art, antiquities, rare publications, paintings, porcelain, coins and other things of cultural and historical value are accepted as collateral.
Not all owners of such things know their real value, so before contacting a pawnshop, it is better to contact an independent appraiser. The examination will show what to focus on and which proposals to definitely reject.
Clothing
Fur, leather or designer items that are of real value are suitable for pawning. You can get up to 40-50% of the market value for clothes. Pawnshops of this kind provide special places for storing these items.
Motor transport
Such institutions specialize in pledging personal cars. In rare cases, the car is stored on an equipped site. Much more often, the client only leaves the title as collateral, and the pawnshop issues CASCO insurance. In case of troubles with the mortgage, the lending institution in any case receives insurance on the property.
At the same time, the organization does not have the cost of storing a car in the parking lot. The amount the client will receive depends on the condition of the car. For new cars, a pawnshop can give up to 80% of their market value, for old cars - up to 40%.
Some pawnshops are of a mixed type, they are also called universal. They combine 2-3 or even 4 types of mortgages at the same time.
Hidden nuances
When contacting a pawnshop, look for online reviews or use real comments from users of this establishment. Reputation is the main criterion that your property will return to you when obligations to repay borrowed funds and accrued interest are fulfilled. Not all institutions provide such information in the public domain. If the information is not on the stand, there is no copy of the license, and they refused to provide it to you, go to another institution
Another point that you should pay attention to when contacting a pawnshop is that the financial institution has the right to terminate the agreement for storing the item early. This situation arises if the Department of Internal Affairs presents documents for confiscation of collateral property. The lender notifies the client within 3 days of the current situation.
