By Rocco Clayfield, founder of GoldPaid (GOLDPAID LTD) · Published · updated
How a postal gold buyer actually makes its money
The margin is the gap between what a buyer pays you per gram and what the metal settles at further up the chain. That gap has to cover real costs: refining recovers slightly less than the assayed content, the metal has to be moved or hedged quickly because the price moves, and there are testing, postage, insurance and staff costs on every parcel whether you sell or not. Operating costs and purchasing models differ between businesses, but a postal model does not guarantee a higher offer. Compare inspected offers for the same items; see why high-street buyers tend to pay less.
A margin is legitimate and every buyer has one. A separately charged fee is another cost to include when comparing the final amounts payable. A disclosed fee is not automatically improper; the important questions are whether it was explained and what you would receive after it. That is why the useful question is never “do you charge a fee?” on its own. It is “what will you pay me per gram for what I actually hold, and does anything come off that figure?” One number, and whether anything is deducted from it.
Not sure how any of this applies to your own items? Send us photos on WhatsApp, and we will help you, call 07944 014111 (8am to 9pm, 7 days a week). We can arrange postage after we have spoken. Nothing is posted until you decide, your parcel is tracked and signed for, the written offer follows the XRF assay, the return is free if you decline, and we aim to pay by Faster Payments within one working hour of your acceptance.
The eight places a deduction hides
| Where it hides | What to ask |
|---|---|
| A rate quoted as a percentage of spot | Which spot price, in which currency, taken at what time? A percentage is not a price until the base is fixed and dated. |
| Per-pennyweight or per-troy-ounce quoting | Convert everything to pounds per gram before comparing. One troy ounce is 31.1035 grams; one pennyweight is 1.5552 grams. A “high” per-pennyweight rate can be a low per-gram one. |
| Return postage on declined lots | What does declining cost me in total, including postage and any handling charge? |
| Assay, handling or administration fees | Is anything charged at any stage, whether I sell or not? Get the answer in writing. |
| Weight rounding | How is weight recorded, and to how many decimal places? Rounding a mixed lot down to whole grams quietly removes weight you own. |
| Carat treatment of mixed lots | Is each item weighed and priced at its own carat, or is the whole lot averaged down to the lowest carat present? |
| Stone, clasp and solder deductions | Are non-gold parts identified and measured, or is a flat percentage taken off the gross weight as an estimate? |
| Minimum thresholds | Is there a minimum weight or value below which nothing is paid, and what happens to items below it? |
Why percentage-of-spot quotes are hard to compare
Percentage quotes sound transparent and are the hardest form of quote to check. A percentage has to be applied to the fine metal content, not to the gross weight of the piece. Nine-carat gold is 37.5 per cent gold by weight, so a gram of 9ct contains 0.375g of fine gold; 18ct is 75.0 per cent, so a gram contains 0.750g. A percentage-of-spot quote therefore has to be run through the fineness and the weight before it becomes money, and the two buyers quoting the same percentage may be quoting against different spot snapshots, taken at different times, in different currencies.
The only comparison that means anything is the fine-metal content of the carat you actually hold, of the same weight, on the same day. Ask both buyers to show their working against that and the percentages become irrelevant. The difference between a headline market price and the figure a scrap buyer pays is explained in spot price versus scrap price, and how any offer is built up from weight and tested purity is set out in how we value gold.
The five questions that surface every fee
- What will you pay me, in pounds per gram, for 9ct (or whichever carat you hold), today?
- Is anything deducted from that figure before I am paid, and what is it called?
- What does it cost me if I decline, including return postage?
- How is my weight measured and rounded, and will the written offer show it?
- Will the written offer show, per item, the purity found, the weight and the rate used?
A buyer who answers all five in writing has effectively published its fee structure and you can compare it against anyone else. A buyer who answers in percentages, ranges and generalities has not, and that is information too. Asking costs nothing and no reputable buyer will object.
Compare the amount paid with the amount offered
Begin with the final amount you would receive for the actual items. A prominently advertised percentage or a statement that testing is free does not settle that figure. Ask whether the written offer already includes every deduction that would apply on acceptance. If a charge would be added later, ask for its amount or calculation before making the decision.
Use a short comparison with one column for each genuine offer. Include the items covered, assessment date, gross offer, disclosed deductions and final payment. Keep a separate column for costs you would incur yourself, such as travel or packaging. This prevents a buyer’s deduction from being mixed up with a cost that applies to your own chosen way of completing the transaction.
For example, a hypothetical £500 offer with a £20 deduction produces £480, while a £490 offer with no deduction produces £490. The result depends on those stated assumptions and the same items being included. The example is not a current GoldPaid rate or a claim about a competitor. Its purpose is to show why the figure left after agreed costs is the useful comparison.
Do not count the same adjustment twice
An assessment may exclude stones or other non-payable components from the weight used in an offer. That is different from charging an administration fee after calculating the offer. Ask the buyer to explain which type of adjustment is being made. Calling every difference a fee can obscure a legitimate distinction; calling every deduction a weight adjustment can obscure an actual charge.
If the buyer offers one amount for a complete piece, find out whether it includes the stone or branded object as a whole. Do not subtract an assumed stone allowance yourself and then compare the reduced figure with another whole-piece offer. Keep each proposal in the form in which it was made until you understand exactly what is included and what would change hands.
A repair or refinement cost may already be reflected in a buyer’s purchasing price rather than shown as a separate bill. That does not make the quoted offer a percentage of retail value. Compare the actual proposals and ask about any unexplained item-level difference. The aim is to avoid both hidden deductions and invented deductions that neither buyer proposed.
Read the decline path as well as the acceptance path
A sale comparison often stops at the amount paid on acceptance, but the terms for declining affect your freedom to compare. Establish any return, storage, handling or other charge that could arise if you decide not to sell. A clearly disclosed cost can be evaluated before sending; an unclear cost is a reason to ask for a specific answer.
Keep that answer separate from the cost of an assessment you commissioned for another purpose. A paid independent valuation is a different service from a buyer inspecting an item in order to make an offer. If you have requested both, identify which fee belongs to which service. Otherwise a useful professional report can be mistaken for a surprise selling charge, or the reverse.
Check whether a minimum lot size affects the proposal. If the buyer does not accept an item or the overall lot is below its threshold, ask what happens to the parcel and whether a cost arises. Do this before dispatching a small test item. Do not assume that terms for a substantial accepted consignment also describe an item the business will not buy.
Keep illustrative calculations separate from changing offers
A comparison written today is a record of today’s proposals. If you return to a buyer later, request a current offer rather than assuming the earlier amount is still available. Record changes in the items or assessment as well as changes in the market. A lower later total does not reveal its cause without those details.
If one offer is provisional and another follows physical inspection, mark that difference clearly. The provisional figure may be useful for deciding whether another assessment is worthwhile, but it is not yet money available on the same terms. Compare uncertainty as well as the headline amount. An extra journey or postal step may be reasonable, but the possible increase should not be treated as guaranteed.
Finally, reconcile the payment against the offer you accepted. If the amount differs, ask for the reason and refer to the agreed record. Keep the question factual: identify the accepted total, the amount received and the difference. This is easier to resolve than reopening every earlier estimate at once, and it creates a clear record if a more formal complaint becomes necessary.
What the law says about disclosing charges
Since 6 April 2025 the unfair commercial practices rules sit in Part 4 of the Digital Markets, Competition and Consumers Act 2024, replacing the Consumer Protection from Unfair Trading Regulations 2008. The Competition and Markets Authority guidance (CMA207, Unfair commercial practices, gov.uk) defines a commercial practice to include an act or omission by a trader relating to the supply of “a consumer’s product to the trader or another person”, so a business buying your gold is inside the regime, not outside it.
Price and how it is calculated is material information under those rules, and the guidance treats information given unclearly, untimely or inconspicuously as omitted. A charge that only appears after your parcel has been opened is the textbook case. This is general information rather than legal advice; if you think a charge was concealed, the escalation route is set out in what to do if something goes wrong.
What GoldPaid charges
Nothing. The Royal Mail Special Delivery label is free, the XRF assay is free, the written offer is free, and the tracked return if you decline is free. There is no assay fee, no handling fee, no administration fee, no return charge and no minimum weight or value, though whether a very small lot is worth your trip to the Post Office is a fair separate question, and one we answer honestly from a photograph in is one small ring worth posting. GoldPaid makes its money on the margin between the figure paid to you and the trade settlement, which is why the written offer sets out the purity found, the weight and the rate used for every item rather than presenting a single lump sum. The full method is on how we value gold, and postal cover is on postage and cover.