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# Dos and don’ts of buying gold jewellery

## If a piece of jewellery has intricate design, the making charges are higher and can go up to 25% of the cost of gold

In a recent television commercial, actress Deepika Padukone and her parents Prakash and Ujjala, talk about how over the years nothing has changed during Diwali—be it cleaning the house or decorating it with diyas, rangoli and lamps or buying gold jewellery. If you, too, buy gold jewellery every Diwali, here is a list of dos and don’ts that you should know about before you pay for it.

The dos

Check for purity: When you buy gold jewellery you should always check for its purity. The easiest way to check for purity is to look for hallmarking. A hallmarked piece of jewellery tells you the official proportion of the metal. The Bureau of Indian Standards (BIS) is the accreditation agency that certifies and hallmarks gold jewellery.

How do you read the hallmark? Any jewellery that has a hallmark will come with a number attached to it along with a BIS stamp on it. It also has a jeweller’s identification mark and the year of hallmark. To understand the caratage, look for the letter ‘K’ which stands for karat and denotes the percentage of purity. For instance, if it says 22K, it means 91.6% purity (percentage of gold content) or 916.

“You should always look for hallmark to understand the authenticity. There isn’t a better way to get it right," said Arvind Kumar, proprietor, Chokshi Arvind Jewellers, a bullion shop in Mumbai.

Cross check the pricing: Gold pricing is determined based on the purity of gold. The price of gold changes every day based on the market rate. All jewellery stores display the daily bullion rates for the consumers. To give you a sense of how the price is calculated, you should first look at the bullion price and then discount it based on the purity of gold. . Let us say, the cost of 10g gold is 25,854 at bullion rate. The price of 22K gold (91.6% purity) will be around 23,682.

While bigger jewellery shops display bullion rates prominently, the smaller shops don’t. Therefore, always check prices before visiting the shop.

Negotiate making charges: Jewellery involves labour cost and all jewellers pass on this cost to the buyers in the form of making charges. Making charges are usually a percentage of the current gold price. Hence, depending on the gold cost, the amount you pay as making charge can vary.

Generally, machine-made jewellery or jewellery with little art work will come with lower making charge and ranges between 6% and 14% of the cost of gold. Some jewellers offer fixed making charges on purchase of ornaments in bulk.

If a piece of jewellery has intricate design, the making charges are higher and can go up to 25% of the cost of gold. You can always bargain on making charges as these costs are unorganised.

The dont’s

Avoid stone-studded jewellery: Do you find jewellery studded with precious or semi-precious stones prettier than a simple gold piece? Then you should know that you are paying more than it is worth. Firstly, it is difficult to check the purity of the stones embedded in the gold. Next, you should always check the exact net gold weight before buying the stone-studded jewellery.

“You don’t want to get cheated while buying gold. So, always ask for the breakup for the net gold and the stones. If a piece of jewellery weighs 30gm, out of which 3gm is stone, you should know about it and then pay accordingly," said Mehul Choksi, chairman, Gitanjali Group.

Also, since jewellery studded with stones requires intricate patterns and designs, you may have to pay more as making charges.

When you want to sell the jewellery, you will have to forego both the cost of the semi-precious stones as well asthe making charges.

Avoid selling to other jewellers: Though you may never want to sell the jewellery that you bought for yourself or have got as a gift, it is prudent to know its resale value. This can come handy if you want to exchange a piece for a better design or want to sell it in case of an emergency. Most branded stores as well as local ones have a buyback policy where they will give you 100% of the value of gold. And it is always better to go back to the store from where you bought the jewellery. Here as well, you will have to let go of the making charges and other costs attached to it.

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Updated: 09 Nov 2015, 12:13 AM IST
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