'Customers do not recover the original making charges paid on old jewellery. Sentimental value is lost when heirlooms are exchanged.'
Large jewellery retailers are promoting gold-exchange schemes.
According to the World Gold Council's Gold Demand Trends report, India's net recycling supply rose 20 per cent year-on-year and 44 per cent quarter-on-quarter to 31.2 tonnes in the first quarter of 2026.
Key Points
- Large jewellery retailers are promoting transparent gold-exchange schemes to attract customers looking to monetise old ornaments.
- Customers often lose original making charges and sentimental value while exchanging heirloom jewellery for newer designs.
- Experts recommend independent purity testing and comparing rates before accepting jewellers' exchange offers for old gold.
- Consumers should carefully review deductions, documentation and benchmark-linked gold pricing before finalising any jewellery exchange transaction.
Recycling Gains Ground
Recycling has always been a part of the jewellery industry.
"Customers exchange damaged pieces and ornaments they are bored of. Exchange volumes have risen sharply in recent times because of high gold prices," says Sangeeta Chetan, director, Zaveri Bros Diamonds & Gold.
"The sharp rise in gold prices, higher import duties and the focus on reducing import dependence are accelerating old-gold exchange," says Suvankar Sen, chief executive officer and managing director, Senco Gold and Diamonds.
Greater formalisation has accelerated this trend.
"Transparent exchange programmes by organised retailers are increasing trust in these schemes," says Shubham Gupta, co-founder, Growthvine Capital.
How Gold Exchange Works
The jeweller assesses purity using methods such as X-ray fluorescence (XRF) testing.
They weigh the jewellery after removing stones, enamel, pearls and other non-gold elements.
"The prevailing gold rate is applied after adjusting for impurities, stones, and wastage," says Gupta.
Watch For Hidden Deductions
Exchanging old jewellery involves value destruction.
"Customers do not recover the original making charges paid on old jewellery. Sentimental value is lost when heirlooms are exchanged," says Sen.
Disputes sometimes arise over assessment of purity.
Verify Gold Purity Carefully
Customers should know whether the purity is 916 (22 carat), 750 (18 carat) or 585 (14 carat), according to Chetan.
Exchange gold with reputed jewellers.
"Insist on purity testing in your presence through XRF testing," says Sen.
Observe the testing process and ask for a written breakdown of purity, net gold content, and deductions.
If one jeweller reports materially lower purity than others, seek further verification.
Customers can get their jewellery independently assessed before going for an exchange.
"Bureau of Indian Standards-authorised assaying and hallmarking centres test purity and weight for Rs 35 to Rs 200 per article," says Saurabh Bansal, founder, Finatwork Investment.
Private labs also offer XRF testing.
"An independent certificate allows customers to negotiate with more information," says Bansal.
Documents You Must Check
Jewellers carry out deductions for stones, pearls, enamel and other non-gold elements in the jewellery.
"The most important deduction is for purity if the jeweller finds the jewellery to be of lower caratage than expected," says Sen.
Jewellers may also account for melting or refining losses.
Stones, diamonds, meenakari work, beads and mixed metals are rarely valued fairly.
"The standard practice is to ignore stones entirely, or offer a nominal amount for them," says Bansal.
Separate all stones before exchanging jewellery.
Bansal recommends that their value should be assessed and they should be sold separately.
Compare the jeweller's rate with the prevailing market rate for gold on that day.
"Track the prevailing 24-carat market gold rate, typically quoted through Multi Commodity Exchange prices or leading bullion associations," says Gupta.
Since most jewellery in India is 22 carat, the exchange value will be adjusted lower based on purity.
"Some retailers may offer a higher headline exchange rate but levy elevated making charges on the new purchase," says Gupta.
Small jewellers use the touchstone or acid method to assess purity.
"This is less accurate than XRF testing," says Bansal.
The weighing scale should have a Legal Metrology stamp.
Insist on proper documents
- Written receipt must have customer details, date and item description
- Gross weight, net gold weight and declared purity should be recorded
- All deductions should be itemised separately
- Melting loss and making charges should be shown as separate line items
- Rate per gram should be linked to a benchmark such as MCX or IBJA
- Shop's GST identification number should be included
- Get purchase invoice with HUID number for new jewellery
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Feature Presentation: Ashish Narsale/Rediff
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