FinancialSelf Management

Considerations for purchasing Gold Jewellery

Buying, Selling or Exchanging Gold Jewellery implies certain significant charges apart from the actual gold price. Here are some of the basic details about considerations to be made during a Gold Jewellery purchase.  I’ve also included a table of comparison of all these factors across three Jewellers that I visited on 20-09-2015.

Gold Purity:

Pure Gold:

Most of us have heard mention about the 24 Karat or Pure Gold.  The 24 Karats or Pure gold does not contains any impurities in it.  The pure gold usually be softer and thus requires alloying to give strength to the items made out of it.  The 24 Karats usually be available in the form of Coins and Bars.  The Price of the Pure/24 Karat Gold serves the 100% value of the Gold. The remaining Gold is valued based the price of Pure/24 Karat Gold on any given day. The Gold price will be same across all of the Jewellers in a locality. Say, in Hyderabad *all* Jewellers will be selling gold at a defined rate. You can find the latest gold price in  Gold Rate in Hyderabad.


Ornamental Gold:

Most of us have heard mention about 91.6% or 22 Karat gold for Ornaments which is also referred as Ornamental gold.  The 22 Karat or 91.6% references actually means the purity of the Gold used in the ornament/item.  A 22 Karats item usually contains 91.6% of gold and remaining are the metals used for alloying.  The addition of 8.4% metals  to pure gold gives it more strength, color, and longevity.  The price of 22 Karat gold would be 91.6% of the Pure/24 Karat Gold on any given day.


Ornamental Gold Quality Assurance and Benchmarking:

BIS (Bureau of Indian Standards) HALLMARK:

The BIS HALLMARK is a accurate determination and official recording of the proportionate content of precious metal in precious metal (Gold)  articles done by Bureau of Indian Standards (BIS).  A BIS Hallmark logo on the ornaments assures that the Jeweller has used the exact 91.6% of gold in the certified ornament.  On BIS Hallmark certified ornaments/items/articles you’ll find below logo. The BIS Hallmarking uses following notation which contain various helpful details as listed below.



Assaying and Hallmarking Centre’s Mark

Year of Marking

Jewellers Identification Mark


Value Addition (VA) charges (Wastage/Mazoori/Tharugu/):

All of the Jewellers will levy certain percentage of charges clubbed under Value Addition (VA). These charges usually refers to  Wastage (called Mazoori/Tharugu in regionally).  Some Jewellers includes Making charges as well under the Wastage charges.  These wastage charges usually range from as low as 3%  and to as high as 22%.  On chains it usually ranges between 6% and 14%.  These charges will be varying across the Jewellers and you need to negotiate for best price.


VAT (Value Added Tax):

All of the Jewellers will levy 1% VAT on all of the transactions.


Exchange and Returns:

Most of the Jewellery vendors provides a #7 days free exchange facility of the Jewellery without additional charges or wastages. Some vendors also accept complete return of the Jewellery and cash refund within #7 days.  I learned this facility is available in Reliance Jewellery where they return the complete payment including VAT back to the customer.


AnyTime BuyBack:

Lately Jewellers have started accepting buyback of the Gold ornaments at a price that is less by certain percentage of gold price prevailing on the buyback day.  This increases the easy liquidity of your investments in the Gold Jewellery.  Most of the Jewellers deduct 1% and refunds you the money of 99% of your gold value on that day. The refund is usually made to customer bank account. Some Jewellers make cash refunds in case if the refund value is less than Rs. 20,000.


One Year Insurance:

Some of the Jewellers tie up with the Insurance providers and will let you take an insurance for your precious Jewellery.  Currently its offered by TanishQ for online purchases as well as Kalyan Jewellers for in-store purchases.  The Insurance charges in Kalyan are  0.63% and it covers the Jewellery for one year only. In case of any loss, you need to produce the original bill, FIR and other proformas as prescribed by the Insurer.


Value Added Services:

Almost all of the Jewellers offers various maintenance activities free of cost to their customers. These includes:

  1. Life Time free repairs – like making joints, etc. Any gold requirement in making the broken links should be borne by the customer
  2. Free Polishing
  3. Free Cleaning
  4. Free Purity check for any Jewellery (includes any items bought even outside)


Choosing Hand made or Machine made Jewellers:

Most of the local/regional Jewellers claim that articles/ornaments/items they have are of hand made and thus remains long lasting.  The other obvious secret is that they add more impurities to the ornaments to make them more stronger. However, in case of banded Jewellers with Hallmark’ing, they claim that their hand made articles contain 3 links whereas the machine made articles will have 8 links at each element of the ornament.  Thus, they recommend hand made Jewellers for daily wear like mangalsutra.  Hand made Jewellers also said to have less wastage charges compared to that of machine made articles. 


Example of purchasing Gold chain:

Below is a table indicating values of various factors that are described above. The values represented below refers to purchase of a Gold chain for mangalsutra.

Factor (as on 20-09-2015)




New Jewellery Purchase

Gold Price (per Gram)




Gold Purity (Percentage or Quality)

91.6 (22K)

91.6 (22K)

91.6 (22K)

Benchmarking (Quality Assurance)

BIS HallMark

BIS HallMark

BIS HallMark

Value Addition (V.A) Charges (Wastage/Mazoori/Tharugu)



10.1% to 11.6%

Final VA (I was given)




VA Value in INR (Per Gram)




Making Charges



Nil (on Negotiation)

Free Exchange Duration  (days from Purchase Date)

7 Days

7 Days

7 Days

Complete Return Duration  Including VAT (days from Purchase Date)

7 Days



AnyTime Buy Back Facility (% Deduction value from Market price)




Mode of payment during Buyback

To the bank Account

To the bank Account

Direct cash if item worth is less than Rs. 20,000. To the bank Account otherwise

















OLD Jewellery Exchange

Gold Price (per Gram)

Based on Purity

Based on Purity

Based on Purity

Reduction Of Wastage weight (as they mention)