How Gold Buyers Calculate Their Offer (% of Melt)
Published June 19, 2026 · updated August 24, 2026
When you hand a gold buyer your jewelry, they run a simple calculation and then take a cut. Understanding that calculation is the single most useful thing you can do before selling, because it tells you the maximum anyone could fairly pay and how far below it you should accept.
Start with melt value
Every offer begins with melt value, the worth of the pure gold in your item if it were refined. The formula is spot price per gram times karat purity times weight.
Spot price per gram is the per-ounce price divided by 31.1034768 (one troy ounce in grams). Purity decimals are 24K = 0.999, 22K = 0.9167, 18K = 0.75, 14K = 0.585, and 10K = 0.4167. Weigh in grams. If a buyer quotes in pennyweight, remember 1 dwt = 1.55517 g, so 20 dwt make one troy ounce.
Worked example at a $3,350 spot price for 15 grams of 14K.
- $3,350 ÷ 31.1034768 = $107.70 per gram
- $107.70 × 0.585 = $63.00 per gram of 14K
- $63.00 × 15 g = $945 melt value
That $945 is the ceiling. No buyer will pay all of it.
Why buyers pay a percentage of melt
A buyer is not a charity. They have to cover refining fees, assay and testing, shipping, insurance, rent, and a profit margin, plus the risk that spot price drops between the day they buy and the day the refiner settles. To stay in business they pay a percentage of melt, not melt itself.
Payout ranges vary by who’s buying.
- Refiners buying direct pay 90–98% of melt, but usually require minimum weights and an account.
- Local jewelers pay 80–90%, especially on clean, karat-sorted lots they can reuse.
- Coin and metals dealers pay 80–90% on coins and bars, sometimes lower on scrap.
- Pawn shops pay 50–70%.
- Mail-in and TV buyers often pay 40–60%, the worst deal going.
So on that $945 melt example, a fair jeweler offer lands around $760–$850, while a mail-in service might quote $400–$550.
What buyers actually publish
The ranges above are the working rules of thumb of this trade. The figures below are different: each one is quoted from a company’s own published terms or from a named test, so you can check them yourself before you accept an offer. Read them as the documented end points, not as what every buyer in your town will pay.
Midwest Refineries publishes a flat number rather than a range. It states “We pay 95% of the pure gold contained in your order”, settling that at 100% of market price on the settlement day, and lists its minimum order as none, with all amounts welcome. That last part matters, because the common advice that refiners are closed to small sellers is not true of every refiner. It also states it charges no refining, assay, treatment or handling fee, and that for orders of three troy ounces or more it melts and assays the material to determine the exact gold content. Payout is by check or bank wire, with a $35 domestic and $60 international wire fee.
Dillon Gage sits at the other end and shows why lot size decides everything. It charges 1% on gold karat scrap lots over 50 ounces and 2% on lots under 50 ounces, plus a $30 assay fee per lot, and states those fees are based on incoming gross weight received rather than on recovered fine gold. On a karat item you therefore pay on the alloy, not on the gold inside it. Its minimum is written as an either/or and is worth quoting exactly: it requires that “the pure gold (or combined gold, silver and platinum) contained in the lot have a minimum value of $10,000”. One ring does not reach that. Turn-around on high grade karat scrap is 24 to 48 hours from receipt.
For the low end, the most-cited independent measurement is old and should be read as history rather than as today’s rate. In a Consumer Reports test published in the magazine’s November 2009 issue and reported by The Globe and Mail on 6 November 2009, mail-in cash-for-gold companies paid 11 to 29 percent of the day’s market price while pawn shops paid 35 to 70 percent. The same test sent identical 18 karat chains and pendants, each with a $175 retail price and a meltdown value of about $70, to three mail-in buyers and to jewellery stores and pawn shops in three states. Consumer Reports advised sellers to aim for at least 50 percent of meltdown value. Those figures are seventeen years old and the mail-in market has changed, so treat the 50 percent benchmark as the durable part and the exact bands as a snapshot of 2009.
The practical read across all three: the spread between the best and worst documented payout is far wider than any negotiating you will do inside one shop, so which type of buyer you walk into matters more than what you say once you are there.
The math the buyer does
Internally the buyer computes melt exactly as you did, then multiplies by their payout rate. If their rate is 85%, the offer is $945 × 0.85 = $803. If they come back with $650, they’re effectively paying 69%, which is low enough to negotiate or walk away.
Some buyers instead quote a flat per-gram price per karat. Compare that number to the live per-gram melt rate for your karat. Divide their per-gram offer by the melt per-gram and you get their true percentage. The 14K gold price per gram page shows the live 14K rate to check against.
How to push the percentage up
You can move a buyer closer to the top of their range. Sort your pieces by karat so 18K isn’t lumped at the 10K rate. Weigh at home in grams to catch scale errors or unit tricks. Know the spot price at the moment you walk in, and quote it. Then get two or three offers, because competition moves the number more than anything you say. Run your melt figure first on the gold calculator so you can recognize a fair deal in seconds.
Common questions
- Is “percentage of melt” the same as spot price? No. Spot is the market price for pure gold. Percentage of melt is the share of that value a buyer pays after their costs and profit. They are different numbers.
- Why did two buyers give very different offers? Payout rates vary by business model, and a refiner pays more than a pawn shop. It usually reflects overhead, not the gold itself. Always compare.
- Should I sell coins differently than scrap jewelry? Yes. Coins and bars often sell at or near spot to a dealer, while scrap jewelry is almost always priced as a percentage of melt.