Gold Selling Avoid rip-offs and earn the most cash

To value gold, you need to know two things: the carat and the weight. For a thorough evaluation, you need to be in the business, but it's possible to have a crack at it.

Step 1. Weigh it

To weigh your gold, you need to be in possession of some minutely-accurate electronic weighing scales, as used by jewellers. Kitchen scales are an option if they measure by the 1/100th of a gram, but these are generally less accurate.

A great tip if you don't have scales is to use the franking scales at work. Professional pocket scales can cost sub-£10, so if you've a vast pile of bling and understand hallmarks, this is another option.

Step 2. Find out the carat

The first thing to note's that very little jewellery is pure, 24-carat gold. Pure gold's too soft for everyday use, so it's alloyed with other metals. The majority of British jewellery's nine carat, which is only 37.5% pure gold.

Check your hallmarks

In Britain there are standard marks indicating that a piece is made from gold and prove its purity and origin. The system's massively complicated, and even the most learned gold experts carry a hallmark identification book.

But here's how to roughly estimate the price. For very detailed hallmarking how-to, including other metals, read the Assay Office's hallmarking guide. If you're serious about getting to grips with gold, a copy of Jackson's Silver and Gold Marks of England, Scotland and Ireland will identify other marks.

The maker/sponsor's mark

Some gold items may have additional initials before the hallmark, representing the maker. Depending on the maker's importance, these marks can often add value.

The carat/fineness mark

This mark shows the gold's purity. As an example, a 9-carat piece contains 37.5% gold, so it's usual to find the numerals 375 stamped on the item; 18-carat gold is 75% gold, hence the 750 mark.

The metal

This optional mark shows the metal. The crown pictured means gold.

The Assay Office

British gold should carry the stamp of the Assay Office that hallmarked it. There are four marks; one for each of the offices (pictured right).

Of course, there's no need for international gold to carry these marks.

The date mark

While this is optional, it's still included on many hallmarks. Since it bears no obvious relationship to the date signified (the K pictured means 2009 and varies by assay office, you'd be best off confirming with a jeweller..

So, put them all together, and the standard mark for 18ct gold hallmarked in London is:

What if it doesn't have a hallmark?

One of the biggest issues is that Hallmarks differ the world over, so if your jewellery's from overseas, chances are it will have a different hallmark, so it's difficult to verify the gold content at home.

Plus under UK law, gold weighing less than 1 gram, eg, earring butterflies, doesn't need to have a stamp.

Just because it has no hallmark, it doesn't mean it's not valuable. In this case, get a valuation from a jewellers, as they have special equipment to check gold content.

Post it to a gold site with no idea of its value and the company may say what it likes about the gold, ie, it has fewer carats than it really does.

To test how much cash you can get for gold, Martin gave me an £100 budget and told me to grab as much jewellery as possible. It's not often I get to buy accessories with the office credit card, so I wasn't about to say no.

I grabbed 11.6 grams of gold from eBay: 3 rings, a heart charm, four earrings and two broken chains – all nine carat. Now I just needed to score a fair price.

Test 1. Jewellers. Best offer £100

It was off to London's Hatton Garden district to hawk my bag o' bling. I posed as an unsuspecting shopper at a busy jewellers on the main drag, muttering “Erm I'm not sure what carat it is ... what's a hallmark?”.

The jeweller plonked my gold on the scales, declared it 11.6 grams of 9 carat and offered £75. I showed a print-out from a postal gold quote which offered £100, but he stuck firm. “Pah! Those gold sites never pay what they say.”

The next bloke upped it to £80. I was unimpressed, and concerned Martin might dock £20 from my pay to cover the loss. Scrap metal buyer Do-By 925, a few yards further on, offered £95. That was more like it.

But I pressed on to a back-street shop piled high with thousands of gold trinkets, where I was offered £90. When I told the jeweller others were talking £95, he leant in cheerfully, “Okay love, I'll tell you where you can get £100, if you buy me a drink with the difference. Go round the back, and down the steps and look for Lois.”

Suspecting I was close to infiltrating London's gold underworld, I found myself in a dark corridor with bullet-proof steel door. The door clicked open and the bloke behind the counter offered £100 – result!

Test 2. Pawnbrokers. Best offer £70

No such rich pickings at pawnbrokers. Most pawn shops buy gold permanently, not just for pawning, but have fatter profit margins than jewellers.

H&T Pawnbrokers on Hammersmith High Street offered £65 for my treasures, raising it to £70, after some haggling. “It's only scrap though, so you won't get that much for it,” he said. I politely told him to get knotted.

The final stop was national chain the Money Shop. A woman suggested £64, which I declined so she offered £70.

Test 3. Postal gold. Best offer £110

Sure enough, the chat forum was full of angry stories from people who'd seen a telly advert and got cheque for a fraction of gold's worth.

But some happy stories became slowly visible among the angry posts. Lots of people were pleased with how much they got, and most had used postal site Hatton Garden Metals.

Gold comparison site Comparethegoldmarket.com showed the cheapest Postgold.co.uk would have paid £23.60 for my treasures and Money4Gold £59. The Hatton Garden Metals' calculator predicted it would give £112 for my stash, beating even the top jewellers.

The bling was posted special delivery, with a home address (no mention of MoneySavingExpert). The next day a cheque arrived for £109.78 and cleared.

• Step 1. Get a valuation

  Once you know the gold's carat and weight (see value your gold above), use our top gold site pick Hatton Garden Metals's* calculator. The actual price depends on the day the company receives it, as gold's value fluctuates daily. But the price shouldn't be too different, unless the markets go bonkers.

  Fill out the form, wait for an email and print off the results to include in your parcel. You also need to pick whether you want to be paid by cheque or directly into your bank account via BACs (you can opt for Paypal, but you'll need to pay Paypal fees).

• Step 2. Make an inventory

  Before you post your gold, photograph it and note down the carat and weight. This is for two reasons: you'll have proof if anything goes wrong at the dealers' end and, it will help your claim if the package gets lost in the post.

  Be very wary of sending off clear stones. Like other gold sites, Hatton Garden won't pay for them or return them. See gemstones notes above.

• Step 3. Post your gold

  Be sure to package up your gold nicely in a padded envelope and double check the address, enclosing a print out of your email quote.

  You MUST use Royal Mail Special Delivery and keep the receipt, to have any hope of claiming compensation if gold goes astray.

  Do bear in mind that posting valuables is risky. While it is rare that Special Delivery items get lost, you're not guaranteed to get compensation if you've no proof of gold's value.

  You may be able to get a similar price going through jewellers, especially if you live in London or Birmingham with its gold districts. This means no risk of it getting lost in the post. Read more on Royal Mail's compensation scheme.

  If the parcel goes missing the post, you need to fill in a Royal Mail compensation form online. Yet if you've no receipts or certificates showing the value, it can be tricky to get full compensation.

  Royal Mail requires proof of the item's value, such as receipts, bank or credit card statements, invoices, valuations, and repair costs in the case of damage claims. Read Royal Mail's full compensation policy.

  It's vague about exactly how it decides whether to issue compensation – presumably so people don't learn how to abuse the system.

  The official quote from the Royal Mail is “We would always look at each claim individually. If a customer is unable to produce any of the documentation we have requested, we would know the weight of the item as this is printed on the certificate of posting. With this information we will look further into the claim and may well request further details.”

  A official valuation from a jewellers would help, but they charge £20.

• Step 4. Show me the money!

  Depending on how you asked to be paid, you'll get cash in your bank account or a cheque through the post in the next few days.

  If you have already sent your gold to a website not included in this guide, it's always worth asking for more, as often gold sites will up their offers. (This doesn't work with our top picks, as they usually offer the max possible.)

The simplest option is to flog your haul to a jewellers in person. Even if you don't want to sell it, it's a great way to get it valued. Of course, you're under no obligation to sell.

Here you simply go door to door, haggle and hand over the goods there and then. The advantage is there's no risk it'll get lost in the post, but, unless you live near London & Birmingham's jewellery quarters, the top postal gold sites usually beat it.

Yet jewellers are the best option if jewellery's un-hallmarked, as the jeweller can do a test in front of you to check its purity. Plus if the trinklets have stones, they will tell you if they're worth owt.

• Take it to three jewellers .

  Don't target jewellers in isolation. As a rule of thumb, always try at least three jewellers and try to play them off against each other. This has two advantages: it gives solid foundation and prods sellers' competitive instincts in your favour to give you a better price. If you have a huge stash, try more shops to max the cash.

• Check out London & Birmingham's jewellery quarters

  Londoners and brummies can take advantage of precious metal dealers on their doorstep. The UK has two world famous jewellery districts: Hatton Garden in London and Birmingham's Jewellery Quarter.

  These are full of hyper-competitive specialist merchants, which deal in bulk and pay more cash than normal high street shops. So if you've more gold than the A-team's Mr T, consider making a special trip.

  This is a decent option even if they offer a few quid less than the top postal gold site, as it avoids c.£5 for delivery and the small risk that the gold's lost in the post. Here are some top tips …

• Do it with chutzpah!

  Chutzpah's a powerful weapon when hawking your gold. Aim for polite, firm, non-combative and maybe just a touch flirtatious. If you're polite, charming and treat the whole process with humour, you'll get further.

• Get postal gold prices on the high street

  Print-outs of results from the top gold sites can be a useful haggling tool. Some jewellers will price-match postal gold prices if you push them. If they do come within a few bob, take it, as you'll save on the hassle and risk of posting.

• Act like you know what you're doing

  As one MoneySaver says, “I felt like the jeweller was appraising me, and not the jewellery!”. The more knowledgeable you seem, the more likely they are to give a fair price.

  So once you know the carat and weight, march in and confidently say “What are you paying for 15 grams of nine-carat?”. As opposed “um, erm, I don't know much about gold …” or they'll think you're easy pickings!

• Make an inventory

  Ask the jeweller to weigh your gold, verify the carat and test everything that isn't hallmarked. Plus if there are any clear stones, ask them for their clarity. If you want to sell it to a postal gold company later, note all these down so you'll know how much you can expect.

• Get 'em to do a trade in

  A top tip is many jewellers let you trade in old scrap for brand new bling. Several MoneySavers have been offered excellent deals when part-exchanging the gold against another purchase. As an example, a broken necklace may be worth £100 as scrap, but they'll knock off £200 off a new watch.

• Find a registered jeweller

  Look for members bodies such as National Association of Goldsmiths and the British Jewellers' Association.

• Ask where they sell to

  If you get friendly with the jeweller, ask them who they sell their scrap gold to. There's likely to be one big trader in town, who, if they sell to the public, will pay you the most.

Ebay isn't just for posh jewellery. There's a brisk trade in scrap gold on there too (just search for 'scrap gold' to see examples), as many postal gold traders buy up gold from eBay.

The closing prices aren't bad and are similar to the best postal gold sites or jewellers. Yet the big downside is you have to pay a listing fee, c.10% on your item as a closing fee and Paypal fees on top.

If you do want to sell it that way, here are some top tips. For a full guide to making £100s on eBay, read Ebay Selling Secrets.

• Check for completed items

  To quickly estimate what you'll get for your scrap, simply go on eBay and do a 'completed items' search.

  Just type in your search, eg, '11.9 grams 9 carat'. Then click 'completed items' on the left-hand bar. It'll come up with a list of prices' similar auctions have already fetched. Now compare the price you can get at top gold site Hatton Garden Metals*.

• List the weight

  Most eBay sellers photograph their loot on electronic scales, so buyers can be sure of its weight.

• Make sure it's got a hallmark

  To sell on eBay, you must have a very clear idea of the jewellery's weight and carat. (See Valuing your gold). It's illegal to advertise it using the word 'gold', unless it has a hallmark. If it doesn't, you will have to list it as 'gold coloured metal'.

• Have some feedback

  If you have a low feedback score you might not get its full value as people will be suspicious. Buy a few small items first to build your score.