I don’t know about you, but when I sent out my gold to the refiners, it never seemed right. With my suggestions you should earn an extra 5% of gross profit. In my 25 years as a pawnbroker, the number one focus on operations was having honesty and integrity within my ranks, including your vendors. You must create a log of the results from the refiners you utilize. You will see comparative results. It's that accounting, bean- counting stuff I learned. And let me tell you, those refiners have the same issues with employees stealing as we have, except the refiners loss is your loss. Their employees steal from the gold batch before it is refined. So it is very difficult for you to know where the slippage comes from. And who believes that refiners are 100% honest. And even if we are giving them the benefit of the doubt, how competent are they? So there are three factors in the refining process that you must rely on.
1. Refineries employees being honest
2. Refineries themselves being honest.
3. These companies are competent and accurate.
There is a very simple process to follow, and as I like to say, "You will only know, when you know". Here is my recommended scrapping process. Start out with 5 coffee cans.
1. Can1 - 10k and below
2. Can2 - 14k
3. Can3 - 18k
4. Can4 - 20k - 24k
5. Can5 - misc gold items with stones. (Diamonds that can't be removed with a simple prong pry, it should be soaked.)
What is a soak? - From Can5 stone removal lot is placed in an individual chemical reactor. A technician will monitor each reaction as your gold, platinum or palladium and any remaining residue is dissolved leaving your stones clean and ready for sorting. It's best to accumulate a good size batch for this type of stone removal because they usually charge an additional $250.00 per batch. This can be negotiated.
As you are processing your defaulted loans, the items that you wish to scrap, put the items in a marked can separated by karat. Look at the stamp mark, no need to gold test. And for items without marks, either guess or test utilizing an analyzer or acid test.
Keep your envelopes so that you can tally the amount of weight and amount as an audit trail if needed. If you have other people doing this routine, I recommend adding the weights marked on each envelope and compare to what you actually sent out.
Whatever timing you prefer (to send out the material) is your call. Ready for the next step?
I first suggest that you select 2 independent refining companies. Then you take each can and split into equal parts. Take a plastic baggy and mark the bag with the karat and weight. You should have either 8 or 10 bags depending if you are sending out a soak. You will send out a batch (containing 10k, 14k, 18k, 20-24k, and soak if included) to each vendor. Write down the carat category and all of the weights of each bag and totals. Indicate in the instructions, " if there is a discrepancy” to contact you. Specifically, indicate that you want to be paid for silver, platinum, and palladium. Otherwise, they keep what you don't ask for? That took me years to figure out.
After you receive the check and specific results, you should have a better idea how different the results can be. Given the type of materials we accept in our trade, there can be a legitimate margin for error. My experience over the year’s showed consistent and similar results when I was dealing with top refiners. Request a new assay if the results don't make sense. There are not supposed to sell your lot until you approve the payment. Separate your scrap batches every time and use 2 vendors. Try new vendors every 6 months and don't get comfortable.
From Hoover and Strong - suggested this check list for optimization.
•Anything used in precious metal manufacturing should be turned in for refining with sweeps in a container. This includes store buffs, brushes, emery paper, etc.
•Include name, address and instructions.
•Include the weight of the scrap.
•State Assay Instructions (i.e. Assay for Silver, Gold, Platinum, and Palladium)
•Separate metals, not karats.
•Separating your scrap increases your bottom line by minimizing your refining charges.
•Separate magnetic from non-magnetic material.
•Treat it like the rest of your inventory; turn it at least twice a year.
•Know the basics of refining.
•Track the scrap in your shop.
•Promote the fact that you buy scrap.
•Send your scrap to a reputable refiner, not a middleman.
1. Refineries employees being honest
2. Refineries themselves being honest.
3. These companies are competent and accurate.
There is a very simple process to follow, and as I like to say, "You will only know, when you know". Here is my recommended scrapping process. Start out with 5 coffee cans.
1. Can1 - 10k and below
2. Can2 - 14k
3. Can3 - 18k
4. Can4 - 20k - 24k
5. Can5 - misc gold items with stones. (Diamonds that can't be removed with a simple prong pry, it should be soaked.)
What is a soak? - From Can5 stone removal lot is placed in an individual chemical reactor. A technician will monitor each reaction as your gold, platinum or palladium and any remaining residue is dissolved leaving your stones clean and ready for sorting. It's best to accumulate a good size batch for this type of stone removal because they usually charge an additional $250.00 per batch. This can be negotiated.
As you are processing your defaulted loans, the items that you wish to scrap, put the items in a marked can separated by karat. Look at the stamp mark, no need to gold test. And for items without marks, either guess or test utilizing an analyzer or acid test.
Keep your envelopes so that you can tally the amount of weight and amount as an audit trail if needed. If you have other people doing this routine, I recommend adding the weights marked on each envelope and compare to what you actually sent out.
Whatever timing you prefer (to send out the material) is your call. Ready for the next step?
I first suggest that you select 2 independent refining companies. Then you take each can and split into equal parts. Take a plastic baggy and mark the bag with the karat and weight. You should have either 8 or 10 bags depending if you are sending out a soak. You will send out a batch (containing 10k, 14k, 18k, 20-24k, and soak if included) to each vendor. Write down the carat category and all of the weights of each bag and totals. Indicate in the instructions, " if there is a discrepancy” to contact you. Specifically, indicate that you want to be paid for silver, platinum, and palladium. Otherwise, they keep what you don't ask for? That took me years to figure out.
After you receive the check and specific results, you should have a better idea how different the results can be. Given the type of materials we accept in our trade, there can be a legitimate margin for error. My experience over the year’s showed consistent and similar results when I was dealing with top refiners. Request a new assay if the results don't make sense. There are not supposed to sell your lot until you approve the payment. Separate your scrap batches every time and use 2 vendors. Try new vendors every 6 months and don't get comfortable.
From Hoover and Strong - suggested this check list for optimization.
•Anything used in precious metal manufacturing should be turned in for refining with sweeps in a container. This includes store buffs, brushes, emery paper, etc.
•Include name, address and instructions.
•Include the weight of the scrap.
•State Assay Instructions (i.e. Assay for Silver, Gold, Platinum, and Palladium)
•Separate metals, not karats.
•Separating your scrap increases your bottom line by minimizing your refining charges.
•Separate magnetic from non-magnetic material.
•Treat it like the rest of your inventory; turn it at least twice a year.
•Know the basics of refining.
•Track the scrap in your shop.
•Promote the fact that you buy scrap.
•Send your scrap to a reputable refiner, not a middleman.
