Gold Jewelry Scam in India; Be Very Careful,
How Jewelers Cheat Customers
During my childhood days, one of my dad's friends was a Jeweler.
Whenever we used to go for Jewelry purchase, I used to pity on him as i used to think that how this poor chap earn his living. He used to sell gold at market rate i.e. same rate at which he has bought. Now I pity on my thought process as the same poor chap is now richest person of town.
In my opinion, Jewelry purchase is the only domain where females don't bargain at all and women can be cheated easily. I have closely
observed purchase cycle and found out many loopholes in entire chain.
It's very high margin business and customer can be easily fooled to the extent of 35%-40% of total sale value (Which is clean profit margin for jeweler). In my opinion, its not cheating but a fraud in broad daylight. Let's discuss these points in details.
1. Making Charges: The biggest culprit among all. Jewelers can charge making charges up to 40% of sale value. The sale and purchase of Jewelry is a mind game. The Jewelers play with the mind of the customers especially females. This is the smartest trick of any trade. If you have observed closely then most of the salesmen try to convince
accompanying female member specially in real estate and jewelry purchase. Once they gauge the mind then price is being quoted. You
will never find price mentioned on any of jewels unit. Instead of price, some code is being mentioned so jewelry price is not
standardized. Some time back, I visited one of the reputed Jewelers with pan India presence. He quoted price of necklace as 1 Lac Rs. when
I asked him price breakup, he became uncomfortable and told me that no
one ask for breakup. He was trying to show that as if I am some idiot who has come for jewelry purchase for the 1st time. When i insisted, he
gave break up as 70k is value of gold and 30k is making charges. He pitched that making charges are just 30% of this beautiful necklace
but way to look at it is that for 70k asset you are paying 30k making charges i.e. approx 43%. Now you can image the extent of cheating.
2. Gold Purity: The purity of Gold is measured in carat. 24 Carat is purest form of Gold available but you cannot make any jewelry from 24 Carat Gold. 24 Carat Gold can be held only in the form of gold coin or gold brick. 18 Carat Gold means that it contains 18 part of Gold and 6 part of another metal i.e. 75% purity. Purest form of jewellery
is 22 Carat. The Hallmark gold contain Gold Purity seal but to value conscious customers, Jeweler pitch low carat gold and charge high.
Reason for this is customer has particular budget in mind and jeweler try to fit customer's requirement in customers budget with low carat
gold. In this bargain, he cheat customer on Gold Purity. In small towns, still the Jeweler's word is final on Gold purity. They sell 18
Carat gold and charge for 22 carat gold. The oral guarantee of Jeweler in small towns is biggest guarantee for customer.
3. You are Paying Gold Rate for Ordinary Stones: Any piece of jewelry is incomplete without colorful stones. When you are buying
this jewelry piece then jeweler weigh the entire piece and charge @ Gold Price but have you thought that you are paying the price of Gold
for ordinary stones costing few hundred bucks embedded in jewelry.
If you go for exchange of same piece then jeweler will deduct the weight of stones as impurity from total value. Assuming these stones weigh 10% of total weight then at the time of purchase, you are paying 10% extra and at the time of sale, you will get 10% less value. It's a double loss for customer.
4. Wastage: Normally Jewelers charge 5%-7% of total gold weight as wastage during making. It is different from making charges and it implies the qty of gold wasted during making. Trust me not even a single gram gold is wasted during making as Gold can be melted and used again.
5. Jewelry Cleaning: This is complementary service from Jewelers and as customer we thank Jeweler that he is such a nice human being
that he is cleaning jewelry for FREE....Friends, there are no free lunches in this world. For cleaning gold jewelry, the jeweler put
the jewelry in one solution which is basically acid. Whenever gold is put in this acid then gold particles are dissolved in this acid. If you weigh the jewelry before and after cleaning then you will
observe the difference of a gram or few fraction of same. So if jeweler is cleaning 100 pieces in a month then he can easily extract 60-70 gram gold from acid solution which will cost approx 2 Lac today.
6. Converting Gold Coins to Jewelry: Many people invest in form of Gold Coins from bank or jeweler. If you are selling Gold Coins back to jeweler from whom you bought the same then you will get complete value. But if u are selling or converting Gold Coins purchased from bank to jeweler then no one will buy at market rate. Despite being of
24 carat purity gold coins of banks are accepted @ 20% to 25% discount by Jewelers. Gold coins of other Jeweller's are accepted at 5%-10%
discount. Its a heavy loss for customer and nothing less then cheating.
7. Under Valuation of Gold Jewelry: If you buy any gold jewelry worth 1 Lac today then i can bet and give it in writing that no other jeweler will value the same more then 95k at same gold rate same day.
Jewelers tend to undervalue the jewelry purchased from other Jeweler.
I hope that this article will be useful for readers to make informed and correct decision while buying Gold jewelry. You cannot avoid 100% cheating but can minimize the extent of loss by questioning the
jeweler regarding pricing.
During my childhood days, one of my dad's friends was a Jeweler.
Whenever we used to go for Jewelry purchase, I used to pity on him as i used to think that how this poor chap earn his living. He used to sell gold at market rate i.e. same rate at which he has bought. Now I pity on my thought process as the same poor chap is now richest person of town.
In my opinion, Jewelry purchase is the only domain where females don't bargain at all and women can be cheated easily. I have closely
observed purchase cycle and found out many loopholes in entire chain.
It's very high margin business and customer can be easily fooled to the extent of 35%-40% of total sale value (Which is clean profit margin for jeweler). In my opinion, its not cheating but a fraud in broad daylight. Let's discuss these points in details.
1. Making Charges: The biggest culprit among all. Jewelers can charge making charges up to 40% of sale value. The sale and purchase of Jewelry is a mind game. The Jewelers play with the mind of the customers especially females. This is the smartest trick of any trade. If you have observed closely then most of the salesmen try to convince
accompanying female member specially in real estate and jewelry purchase. Once they gauge the mind then price is being quoted. You
will never find price mentioned on any of jewels unit. Instead of price, some code is being mentioned so jewelry price is not
standardized. Some time back, I visited one of the reputed Jewelers with pan India presence. He quoted price of necklace as 1 Lac Rs. when
I asked him price breakup, he became uncomfortable and told me that no
one ask for breakup. He was trying to show that as if I am some idiot who has come for jewelry purchase for the 1st time. When i insisted, he
gave break up as 70k is value of gold and 30k is making charges. He pitched that making charges are just 30% of this beautiful necklace
but way to look at it is that for 70k asset you are paying 30k making charges i.e. approx 43%. Now you can image the extent of cheating.
2. Gold Purity: The purity of Gold is measured in carat. 24 Carat is purest form of Gold available but you cannot make any jewelry from 24 Carat Gold. 24 Carat Gold can be held only in the form of gold coin or gold brick. 18 Carat Gold means that it contains 18 part of Gold and 6 part of another metal i.e. 75% purity. Purest form of jewellery
is 22 Carat. The Hallmark gold contain Gold Purity seal but to value conscious customers, Jeweler pitch low carat gold and charge high.
Reason for this is customer has particular budget in mind and jeweler try to fit customer's requirement in customers budget with low carat
gold. In this bargain, he cheat customer on Gold Purity. In small towns, still the Jeweler's word is final on Gold purity. They sell 18
Carat gold and charge for 22 carat gold. The oral guarantee of Jeweler in small towns is biggest guarantee for customer.
3. You are Paying Gold Rate for Ordinary Stones: Any piece of jewelry is incomplete without colorful stones. When you are buying
this jewelry piece then jeweler weigh the entire piece and charge @ Gold Price but have you thought that you are paying the price of Gold
for ordinary stones costing few hundred bucks embedded in jewelry.
If you go for exchange of same piece then jeweler will deduct the weight of stones as impurity from total value. Assuming these stones weigh 10% of total weight then at the time of purchase, you are paying 10% extra and at the time of sale, you will get 10% less value. It's a double loss for customer.
4. Wastage: Normally Jewelers charge 5%-7% of total gold weight as wastage during making. It is different from making charges and it implies the qty of gold wasted during making. Trust me not even a single gram gold is wasted during making as Gold can be melted and used again.
5. Jewelry Cleaning: This is complementary service from Jewelers and as customer we thank Jeweler that he is such a nice human being
that he is cleaning jewelry for FREE....Friends, there are no free lunches in this world. For cleaning gold jewelry, the jeweler put
the jewelry in one solution which is basically acid. Whenever gold is put in this acid then gold particles are dissolved in this acid. If you weigh the jewelry before and after cleaning then you will
observe the difference of a gram or few fraction of same. So if jeweler is cleaning 100 pieces in a month then he can easily extract 60-70 gram gold from acid solution which will cost approx 2 Lac today.
6. Converting Gold Coins to Jewelry: Many people invest in form of Gold Coins from bank or jeweler. If you are selling Gold Coins back to jeweler from whom you bought the same then you will get complete value. But if u are selling or converting Gold Coins purchased from bank to jeweler then no one will buy at market rate. Despite being of
24 carat purity gold coins of banks are accepted @ 20% to 25% discount by Jewelers. Gold coins of other Jeweller's are accepted at 5%-10%
discount. Its a heavy loss for customer and nothing less then cheating.
7. Under Valuation of Gold Jewelry: If you buy any gold jewelry worth 1 Lac today then i can bet and give it in writing that no other jeweler will value the same more then 95k at same gold rate same day.
Jewelers tend to undervalue the jewelry purchased from other Jeweler.
I hope that this article will be useful for readers to make informed and correct decision while buying Gold jewelry. You cannot avoid 100% cheating but can minimize the extent of loss by questioning the
jeweler regarding pricing.
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