Buying Back Used Gold and Exchanges: How to Calculate It Correctly

When a customer walks in with an old bangle to sell, or to trade toward a new bridal set, the first question is: how much will you give me? This is where most disputes between customers and shops start, because people expect to get back what they paid. This guide walks through the calculation for both sides: customers who want to understand the number, and shop owners who need to calculate and record it correctly.

Selling price vs buying price

Every shop quotes two prices per karat: a selling price (what it charges customers) and a buying price (what it pays them). The buying price is always slightly lower. The spread covers testing, melting or repair, and the risk that prices fall before the gold is resold. The figures below are illustrative: 21K selling at 6,300 EGP/g and buying at 6,220. Actual prices change daily; check today's gold price.

The buyback formula

• Net weight: stone weight is removed. Ordinary stones usually have no resale value; diamonds are appraised separately.
• Karat: confirmed from the hallmark and invoice, and tested with an electronic analyzer or touchstone if in doubt. If the piece tests lower than stamped, it is valued at its actual karat.
• Deduction: some shops deduct a small percentage for heavy soldering, dirt, or damage. It should be stated to the customer before the calculation.

Why the making charge is not refunded

The making charge paid for design and workmanship, and the shop has already paid the workshop for it. When a piece comes back, the shop will usually melt or rework it, so it is buying metal only. Take the bangle from how to calculate gold price with making charge:

That is why heavily worked jewelry is a poor vehicle for short-term saving. For storing value, 24K bars or coins carry lower making charges; see the difference between 24K, 21K and 18K.

Exchanges: trading old gold for new

In an exchange, the shop credits the old gold's buyback value and deducts it from the full price of the new piece (gold plus making charge). The customer pays the balance.

Many customers think of it as weight for weight: their 15 g covers 15 g of the new set, and they pay the making charge on the whole set (3,960), the extra 3 g at the selling price (3 × 6,300 = 18,900), and the spread on the 15 g swapped (15 × 80 = 1,200). The total is the same 24,060 EGP. Both views are correct, as long as the invoice shows every line.

ID, receipts and customer trust

Buying gold from the public carries responsibility. Reputable shops record the seller's details from their national ID, ask for the original purchase invoice where available, and give a receipt showing weight, karat, gram price, any deduction and the amount paid. This protects the shop against buying stolen goods and protects the customer if there is a disagreement later. Detailed requirements can vary, so confirm the rules that apply to your shop.

• Weigh the piece in front of the customer on a scale whose display they can see.
• Put gross weight, net weight, karat, gram price, deduction and reason on the receipt.
• Quote the buying price before weighing, not after.
• Record the gold in that karat's scrap balance immediately.

For shop owners: one ticket, not two

A manual exchange means two calculations, two invoices and two stock movements, which is an easy place for errors. In GoldCore's POS the cashier weighs the old piece and captures the seller's details; the system values it at the buying price, deducts it from the new piece, prints one itemized exchange invoice, and updates both the scrap balance and the stock in the same step. You can try GoldCore free for 14 days.