We Buy Gold | Richashell.com

1982 The classic investigative piece on diamond trade and how the diamond ring was literally made into a luxury item.
An unruly market may undo the work of a giant cartel and of an inspired, decades-long ad campaign
http://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/

Quote from the middle of the article: Since "young men buy over 90% of all engagement rings" it would be crucial to inculcate in them the idea that diamonds were a gift of love: the larger and finer the diamond, the greater the expression of love. Similarly, young women had to be encouraged to view diamonds as an integral part of any romantic courtship.
Except for those few stones that have been destroyed, every diamond that has been found and cut into a jewel still exists today and is literally in the public's hands. Some hundred million women wear diamonds, while millions of others keep them in safe-deposit boxes or strongboxes as family heirlooms. It is conservatively estimated that the public holds more than 500 million carats of gem diamonds, which is more than fifty times the number of gem diamonds produced by the diamond cartel in any given year. Since the quantity of diamonds needed for engagement rings and other jewelry each year is satisfied by the production from the world's mines, this half-billion-carat supply of diamonds must be prevented from ever being put on the market. The moment a significant portion of the public begins selling diamonds from this inventory, the price of diamonds cannot be sustained. For the diamond invention to survive, the public must be inhibited from ever parting with its diamonds.

Edward Epstein explains why you can’t sell used diamonds for anything but a pittance:

Retail jewelers, especially the prestigious Fifth Avenue stores, prefer not to buy back diamonds from customers, because the offer they would make would most likely be considered ridiculously low. The “keystone,” or markup, on a diamond and its setting may range from 100 to 200 percent, depending on the policy of the store; if it bought diamonds back from customers, it would have to buy them back at wholesale prices.

…

Most jewelers would prefer not to make a customer an offer that might be deemed insulting and also might undercut the widely held notion that diamonds go up in value. Moreover, since retailers generally receive their diamonds from wholesalers on consignment, and need not pay for them until they are sold, they would not readily risk their own cash to buy diamonds from customers.

If you decide to sell look at price listings at a site like Pricescope.com to see what new, unset, diamonds are selling for at bottom retail.

If you can get 40% of that you are doing great because the seller is already buying at 50% to 60% of that price so anything more than 40% means it would be easier to just buy from his normal supplier rather than deal with an off the street buy. Diamonds and jewelry are NOT investments. They are luxury items. Very very few things maintain their value once you walk out of the store with them. Cars, boats, airplanes and so on. Luxury items. To think you can sell it back for anywhere near what you paid is unrealistic to begin with. And one last thing. If anyone that tells you a diamond is an investment, run.

We Buy Broken Gold
Why would a wealthy diamond merchant in a three-thousand-dollar suit want to cheat me out of a hundred bucks’ worth of gold?
By Clancy Martin
http://laphamsquarterly.org/swindle-fraud/we-buy-broken-gold

Armand Hammer practiced jewelry scams no one would dream of attempting today, counterfeiting Fabergé eggs that he then promoted with “newsletters” and “editorial reviews,” written by “independent experts” who were all in fact pseudonyms for Armand Hammer. He and many others like him sold white gold as platinum and silver as white gold, and stamped the metal with fake hallmarks; he held museum showings of “rare Russian artifacts” that he’d had mass-produced in Europe; he sold garnets as rubies, topazes as sapphires. When he got out of the jewelry business and became one of the most powerful oil men in the country it was because he realized the scams he could pull in the oil business paid a lot better than those in the jewelry business.

Gold and Silver Exchange - "We’ll Pay Cash for Your Old Gold and Silver”
Almost all of it was on consignment from jewelry wholesalers and counterfeiters—our counterfeit but solid-eighteen-karat-gold Rolexes were handmade in Brazil. Discreetly brokering the private estates of well-established clients was another matter,

The real money was in cheap chains and college rings and old wedding bands. They won’t pay you what it’s worth—nobody can, that’s not how this works. The key is to talk rapidly but with complete confidence—like a man too busy to waste either his own time or the seller’s—and to be quicker than a stenographer or a magician on the calculator.

The most ingenious trick in Ronnie’s bag: because the young men and women working the buys were innocents, brand-new to the business, and because they had to get their prices from the old experts who worked desks in the back, we made our buy offers with a sincerity, trustworthiness, and enthusiasm that could never be duplicated by even the cleverest old diamond man. We were too young, too dumb, and too smartly dressed to cheat anyone.

I’ll tell you how it’s done. Let’s say you have a fourteen-karat gold ring that weighs fifteen grams, or about half an ounce, and gold is at one thousand dollars an ounce. First you weigh it and show the customer that it’s fifteen grams. Then you take the price of an ounce of gold and divide it by thirty-one to get a gram price for pure. “Now we multiply that by fourteen for fourteen karat and divide it by twenty-four for twenty-four karat, which is what it would be if it were 100 percent gold,” you explain to the seller. “That gives us the price for your fourteen-karat gold. Multiply that by fifteen, for fifteen grams. Now, fourteen karat is 56 percent gold and 44 percent base metal, which burns off at the smelter, so we multiply that by 0.56. Finally, we deduct 10 percent for the smelter, and 15 percent for my profit. Most gold buyers will charge you 20 or 25 percent, which is a reasonable profit margin, but we do such high quantity of gold-buying here that we can afford very low margins. That gives us a final figure of…” You get the picture.

The customer’s ring is worth $280 in real gold value. But you just offered $120, with a seemingly sound mathematical justification.

And you’ve left yourself plenty of wiggle room if they want to haggle your profit down from 15 percent to 10 percent or even 7.5 percent. The real key to this scam is that you’ve deducted for the impurity of fourteen karat not once but twice: first, when you calculated the per-gram price and again when you “deduct for the base metal.” Furthermore, your smelter will charge you at most 5 percent—often less, depending on the quantity—and if it’s a nice piece you’ll never melt it down anyway. You’ll send it to your jeweler to make it look brand-new and put it in the showcase for retail. The key, as with my diamond buy back at Fort Worth Gold, is not to let them leave your office. And you do that by staring them in the eye and lying: “No one will offer you a better price. That’s the reason you’re here. Everybody knows we pay the highest.” Hold the customer’s gaze until they look away. Push their jewelry toward them, as though you really don’t want to buy it. Ninety-nine times out of a hundred— especially if you have a luxurious, busy store—your customer will wilt. The fact is, they’re already weakened: that’s what they’re doing in your store in the first place.

Royal Jewels measured in Centuries not Carats

SEE THE JEWELS OF ROYALTY
OF THE 1% BY THE 1% FOR THE 1%
Jewelry and Clothes are the Symbol of Power, Strength, and Opulence.

Contents

Royal Jewels measured in Centuries not Carats