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How Pawnshops Determine an Item’s Value – Part 1

In this blog, I’ll discuss three easy steps to estimate the value of an item to pawn:

  • The “magnet test” to determine if the item is a precious metal
  • Looking for metal purity markings (“k,”, “ct,” and “ster”)
  • Weighing the item on a jewelry scale

I’m often asked how Provident Loan determines the value of items brought in for a collateral loan. It certainly helps to have an idea of an item’s worth before pawning it. For purchased items, a sales receipt is helpful, but be aware that retail prices are usually higher than what a pawnshop will let you borrow against. So don’t let this set you up for disappointment.
But what about that piece you inherited or just found in your jewelry box?
Below are some simple steps you can take to determine the item’s value.

Step 1: Make Sure It’s Real

There’s a simple test to rule out that the item is costume jewelry. Hold a common household magnet over any item you think is gold, platinum, or silver. Precious metals do not contain iron, so they won’t be attracted by the magnet.
In fact, anything that is attracted to the magnet you can assume is fake and not something you can pawn.
Note that the magnet test, though a good first step, can only show that an item is fake, it doesn’t necessarily prove that an item is real.

Step 2: Check for Purity


Let’s assume that your item is the real thing. The next step is to check the purity, or fineness of its metal, which is often stamped right on it, usually in excruciatingly small type.
If the item is from the U.S. or Canada, it will have its purity marked in karats, which is the measurement for gold purity and is symbolized by the letter “k” as in 9k, 14k, 18k, etc. This is not to be confused with “carats,” which is a unit of measurement for diamonds and other gemstones.
If the piece was made outside of the U.S. or Canada, it might read “ct” (i.e., 9ct, 14ct, 18ct), which is just a variation on the “k” abbreviation. In addition, if the item was made in Europe, it might be stamped with numbers: 375 = 9k, 585 = 14k, and 750 = 18k.
For silver, you might see the words “sterling” or “ster,” or a number such as “.925.” An item must be at least 92.5% pure silver to be considered sterling. Be forewarned that not all countries use these hallmarks. Also, unscrupulous people have been known to put these stamps on fake jewelry. While checking for the stamp is helpful, unfortunately, it is not definitive. A reputable pawnbroker will still test the metal to know its real value.

Step 3: Determine the Weight

You will also need to know the weight of your item. While a small jewelry scale will provide some degree of accuracy, pawnshops use a very sensitive professional jewelry scale, so don’t be surprised if the weight differs from what you got. Reputable pawnbrokers keep their scales in top working condition in order to accurately determine your item’s real value.
Finally, remember that just because someone gives you an estimate, it doesn’t mean you MUST complete a transaction! Any reputable pawnbroker will be happy to tell you FOR FREE if an item is valuable.
In my next blog, I’ll continue the discussion on precious metals and how to determine the value of gemstones.

About the Author
Anthony LoRe, a certified gemologist, and director of The Provident Loan Society’s Appraisal Department.

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