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Business News/ Money / Calculators/  Check-list for buying platinum jewellery
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Check-list for buying platinum jewellery

You should compare prices, ensure purity, look at making charges and ask about buy-back options

Shyamal Banerjee/MintPremium
Shyamal Banerjee/Mint

On 28 September, Thrissur-based Preeti Francis, a 36-year-old homemaker, walked into a plush jewellery store in her city with her two-year-old daughter to buy a pair of platinum bands. “I have been eyeing them for some time and want to buy them for my fifth wedding anniversary, which was on 30 September," said Francis. She said she had wanted a platinum ring for her engagement in 2009 but had to settle for gold instead because her parents preferred gold to platinum. “My parents are conservative and in Kerala everyone loves gold, so I had no choice. Now I have convinced my husband to buy these," she laughed.

Nivedita Tiwari (42), a homemaker who lives in Satna, Madhya Pradesh, bought a platinum ring for her daughter, Aditi, as a birthday gift. “I had insisted on a platinum ring," said Aditi, adding, “I had seen it at my aunt’s store—she is a jewellery designer. My mom also liked it so she bought it for me in February."

Jewellery retailers and industry experts say that earlier only the well-travelled or those living in urban areas purchased platinum jewellery. But the trend has spread to other parts of the country as well. The change in choice should translate into an increased demand for platinum. According to Platinum Guild International (PGI), an industry body supported by South African platinum producers and refiners, platinum jewellery demand is expected to grow over 35% during this calendar year. It said that from two manufactures and 15 retailers in 2000, the industry has now grown to 17 manufacturers and over 800 retailers in India.

Mint Money doesn’t advise buying jewellery as an investment. However, if like Francis and Tiwari, you, too, want to own platinum jewellery, here are four things you must know.

Check for certification

Purity always comes first for any precious metal as the price that you pay is directly linked to it. A hallmark identifies the type and purity of the metal. Different countries have their own symbols for platinum hallmark. In India, platinum jewellery is stamped with a Pt950 mark. It denotes 95% purity. Also check for a tamper-proof quality assurance card. In addition to these, each piece of jewellery has a Unique Identification Number stamped on it, which indicates the maker of the piece.

“Hallmarking of platinum and gold are very different. The testing process used for gold can’t be applied to platinum. So, to assure consumers of the purity of jewellery across authorized retail outlets, Platinum Guild India Pvt. Ltd has appointed Underwriters Laboratories (UL Inc., a US-based company) to check the authenticity of platinum jewellery, and audit and monitor the quality assurance scheme," said Vaishali Banerjee, country manager-India, PGI.

Like gold, there is an unorganized market for platinum jewellery too. Hence, only buy platinum that has Pt950 mark.

Making charges

This is the amount that you pay for the labour involved in making a piece of jewellery. Labour charges are usually a percentage of the current platinum price, and are generally higher than that of gold. So, the higher the price of platinum, higher would be the making charges.

“Platinum jewellery is usually not handmade in India. It is a hard metal which requires a high melting point and hence can only be made in factories. To make platinum jewellery, highly skilled craftsmen and expensive manufacturing facility is required. All this results in high making charges," said Neha Kapadia, partner, Design Jewels, a jewellery store in Mumbai.

India doesn’t have platinum reserves and imports mainly from South Africa. For machine-made jewellery, Mumbai is the main manufacturing hub. Bangalore-based brand Ganjam is a major manufacturer of handcrafted platinum jewellery in India.

In India, the making charges range between 11% and 25% of the cost of platinum. Generally, plain bands attract the least amount of making charges, whereas necklaces and designer bangles cost more. Remember that you can bargain on making charges.

Check pricing

Earlier, platinum was sold at a premium to gold. For instance, in 2000, the international price of gold was $265 per ounce whereas platinum was at $577 per ounce. But now the prices are almost at par—the international prices of gold on 27 October ended at $1,226.55 per ounce while platinum ended at $1,257.25 per ounce.

Price of gold changes every day based on the market rate and most jewellery shops display the bullion rate as on that day. However, in case of platinum, there is no standard pricing. “Till 2002-03, jewellers used to sell platinum at a fixed price. Now each jeweller has price of the day. However, there is no standard pricing for platinum and there can be a difference of 4-5% in platinum rates from store to store. This is because India is not a mature market when it comes to platinum pricing," said Vijay Jain, chief executive officer and board member, Orra, a retail jewellery brand that also sells gold and diamond jewellery. Jain said Orra has seen 25% growth in platinum jewellery sales so far this year, and expects to end the year with 30% growth in sales.

So, how does one calculate the price? “To get value for your money, check the pricing of the metal and the labour charges separately. Some retailers will increase the labour charges and decrease the platinum pricing. Also, you need to have an eye for craft to figure out whether the labour cost you are paying is worth it," said Jain.

What this means is that you will have to compare prices before buying platinum to get the best deal.

Buy-back scheme

It is unlikely that you want to sell the jewellery that your parents bought for you. But you may want to exchange the pieces in the future. To do so, you must keep the receipt of the piece mentioning the weight of platinum and the certificate of purity. If you go to the same jeweller, she may give you the entire amount for the weight mentioned.

Remember that, as is the case with gold jewellery, for platinum, too, all jewellers deduct making charges at the time of buying back platinum.

Platinum is known for its density and, hence, is considered the best option to set a solitaire. Keep a tab on things such as certificate of authentication, purity, making charges and buy-back offers before you place the solitaire in that platinum band you always wanted to buy.

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Published: 28 Oct 2014, 07:33 PM IST
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