Exchanging old gold for new jewellery this Diwali? 6 things to check before accepting your jeweller’s valuation | Guide

Diwali is one of the biggest occasions for buying gold jewellery in India. While many households prefer purchasing new ornaments during the festive season, exchanging old gold for new designs can be a convenient way to upgrade jewellery without paying the entire cost upfront.

However, exchanging old jewellery is not necessarily the same as getting its full market value. The amount a jeweller offers depends on several factors, including the purity of the gold, its net weight, deductions for stones and other materials, melting charges and the jeweller's exchange policy.

Even a small difference in the valuation can affect how much a buyer ultimately pays for the new jewellery. Before handing over old ornaments this Diwali, here are six things you should check to ensure you get a fair deal.

The first thing to check is the purity of the jewellery being exchanged. An ornament purchased years ago may have a different gold purity from what the buyer assumes, particularly if it was bought without a hallmark or from a different jeweller.

Ask the jeweller to test the gold in your presence and explain the results. Do not rely solely on an old purchase bill or a verbal assurance about whether the jewellery is 22-karat, 18-karat or 14-karat.

If the jewellery carries a BIS hallmark, check its details, including the six-digit Hallmark Unique Identification (HUID), through the BIS Care app. However, a hallmark establishes the declared purity of the article; it does not guarantee the exchange price.

The Bureau of Indian Standards (BIS) also allows consumers to approach its recognised Assaying and Hallmarking Centres to get old gold jewellery tested on a chargeable basis. This can be useful if you are unsure about the jeweller's assessment.

The weight displayed on the weighing scale may not represent the amount of gold for which you will receive credit.

Jewellery often contains gemstones, diamonds, enamel, lac, beads and other non-gold materials. These components are generally excluded when calculating the value of the gold being exchanged.

For instance, if an ornament weighs 20 grams but contains 2 grams of stones and other non-gold material, the eligible gold weight could be only 18 grams.

Ask the jeweller to show you the gross weight, the weight of non-gold components and the final net gold weight separately. Ensure the weighing takes place in front of you and that the figures are recorded.

This is particularly important when exchanging studded necklaces, bangles and elaborate wedding jewellery, where the difference between gross and net weight can be significant.

Do not assume that the jeweller will value your old jewellery at the same rate at which new gold is being sold.

Jewellers may use a separate buying rate for old gold, depending on its purity and their exchange policy. Therefore, ask for the per-gram rate being applied to your jewellery and compare it with the prevailing market price for the same purity.

For example, the value of 22-karat gold should not be compared directly with the quoted rate of 24-karat gold. The purity adjustment matters when calculating the actual value.

You can check the day's benchmark gold prices through the India Bullion and Jewellers Association (IBJA) before visiting the store.

Also ask whether the jeweller is applying the same rate throughout the valuation or making any additional price adjustments. A seemingly attractive exchange offer may not necessarily translate into a better deal if the buying rate is lower.

One of the most important aspects of an old-gold exchange is understanding the deductions applied to the jewellery's assessed value.

Some jewellers may deduct charges towards melting, refining, testing or processing the old gold. The nature and amount of these deductions can vary across jewellers and their exchange policies.

Ask for a complete breakdown before accepting the valuation. Specifically, check:

• Whether any deduction is being made for melting or refining.
• Whether testing or processing charges apply.
• Whether the deduction is calculated as a percentage or a fixed amount.
• Whether additional deductions apply to jewellery purchased from another jeweller.

Do not accept a broad explanation such as 'standard deduction' without asking for the actual calculation.

Remember that the making charges paid when you originally purchased the jewellery are generally not recovered during an exchange. The valuation primarily reflects the eligible gold content, rather than the original retail price of the ornament.

A jeweller may offer an attractive valuation for your old gold, but that does not automatically make the overall exchange economical.

The final amount you pay also depends on the price of the new jewellery, its gold weight, purity, making charges and applicable taxes.

For instance, suppose your old jewellery receives an exchange value of ₹1.20 lakh, while the new ornament costs ₹1.80 lakh before applicable taxes. You will still have to pay the difference, along with any additional charges and taxes applicable to the transaction.

Ask the jeweller for a separate breakdown of the new ornament's gold value, making charges, stone value, if any, and GST. Also check whether the advertised festive discount applies to the making charges or the entire jewellery bill.

Compare the final payable amount with what you would spend if you sold the old gold separately and purchased the new jewellery from another retailer.

Before agreeing to the exchange, understand the jeweller's terms and conditions.

Some retailers may accept old gold purchased from any jeweller, while others may offer different valuation terms for jewellery bought from their own stores. There may also be specific requirements relating to purchase invoices, identity documents and the type of jewellery accepted.

Check whether the jeweller offers the same exchange value for hallmarked and unhallmarked jewellery, and whether the valuation changes for damaged or studded ornaments.

Most importantly, insist on written documentation showing the old jewellery's weight, assessed purity, applicable rate, deductions and final exchange credit. The new jewellery invoice should separately mention its description, net precious metal weight and purity.

BIS requires jewellers to mention details such as the description of each article, net weight of the precious metal, purity in carat and fineness, and hallmarking charges in invoices for hallmarked precious-metal articles. Keep the bill and exchange receipt safely in case of a future dispute.

Kirti jha

Kirti Jha is a Senior Content Producer at Mint, where she writes on mutual funds, taxation, personal finance and macroeconomic developments. Her reporting focuses on helping readers understand complex financial developments through data-driven, research-backed stories that explain how policy changes, market trends and regulatory decisions affect investors and households. <br><br> Before joining Mint, Kirti worked at ET Money, where she specialised in mutual fund research and investment analysis. She tracked portfolio disclosures, fund manager strategies, sectoral allocation shifts and investment trends, distilling large datasets into investor-focused insights. Her work combined quantitative analysis with consumer-centric storytelling, enabling readers to better understand fund positioning, portfolio changes and long-term investment opportunities.<br><br> Kirti holds a Bachelor's degree in Economics from Indraprastha College for Women, University of Delhi, and a Master's in Finance from the Jindal School of Banking & Finance at O.P. Jindal Global University. Her academic training emphasised analytical thinking, quantitative research and financial decision-making, providing a strong foundation in understanding capital markets, financial systems and economic policy. With a combined experience in investment research and financial journalism, she is committed to producing accurate, accessible and insightful journalism that empowers readers to make well-informed financial decisions.

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HomeMoneyPersonal FinanceExchanging old gold for new jewellery this Diwali? 6 things to check before accepting your jeweller’s valuation | Guide

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