Askhaya Tritiya has arrived. It is that time of the year when most of us decide to visit a gold showroom and make a gold purchase to ensure good fortune through the rest of the year.
All those who are investing their hard-earned money in gold must, though, remind themselves that India's gold business has never been transparent.
A recent survey based on gold jeweller listings on Just Dial that was done by the World Gold Council found there are more than three times as many gold jewellers in India - 385000 to 410000 - as there are bank branches. But of this, only 30% fall in the organised sector. Most of our gold jewellers are small and operate independently.
The World Gold Council (WGC) report in 2017 noted that this has meant that "despite 15 years of hallmarking, gold jewellery is still routinely under-carated. According to research by the consultancy, Oliver Wyman, under-carating of gold jewellery weight has fallen from between 20%-40% to somewhere around 10%-15%, although the true percentage may well be far higher given there are limited number of BIS certified jewellers. This is an important issue for the consumer."
The WGC has also underlined that even all hallmarked jewellers are not credible in another report of theirs.
"Till date even hallmarked jewelleries are not that credible in India. It is not fool proof as the original BIS policy has intended it to be. To make hallmarking more credible there should be independent checks by BIS of the hallmarking centres. The enforcement should be much more rigorous," WGC managing director (India) PR Somasundaram stated then.
With this being the scene it is not helping that gold buyers themselves are being largely careless. The WGC's India's gold market: evolution and innovation observed that "In urban India, 5% of consumers say they do not know the caratage of the jewellery they bought in the past 12 months; this increases to 18% in rural India."
These being the ground realities, we at Sify Finance decided to put together a checklist that every Indian must follow before making their purchases to avoid being duped:
1) Only BIS hallmarked jewellery, please
The first step every customer must take is to buy gold from a BIS (Bureau of Indian Standards) hallmarked jeweller, preferably from a reputed name in one of India's top cities.
With surprise checks and the cancellation of licenses of BIS-hallmarked showrooms in case of genuine complaints possible, the BIS hallmark, despite the concerns raised above, remains the benchmark you need to insist on.
2) Find the gold rate per gram
Find the day's per gram gold price before you make your purchase. How it is arrived at varies from city to city and from one gold jewellers' association to another. The rates are usually changed twice a day - once in the morning and once in the evening. The biggest jewellers almost always sell at the same price.
Ensure you check rates on a reliable website ahead of purchase. Sify.com has Akshaya Tritiya gold rates from all of India's major cities sourced from the major bullion organisations in the cities or from the reputed jewellers here and it is up to date.
Another way of ensuring that the gold rate per gram is reliable is by cross-checking the gold prices in more than one famous showroom.
3) How many grams of gold are you really getting?
Most gold sellers have a trick up their sleeve that they have employed down the ages. They complicate the rate cards.
Let us explain:
At most jewellery stores, beside the per gram price, there are added columns for wastage (which varies from ornament to ornament and the mechanism of arriving at which is a mystery only the jeweller can solve) and making charges.
Once you finalise the ornament you are buying, making charges or a wastage percentage is removed from the rate card as a special discount, but that doesn't simplify the picture, now does it?
A better way of simplifying the rate will be to find out the gold you actually get in hand for the price you pay.
For example, if the final price is Rs 35000 and you get a 10 gm chain in hand - you have in essence paid Rs 3500 per gram. From this, subtract the day's actual gold rate per gram and see how much more you will end up paying per gram. Only if your heart is in the deal even after this, go ahead.
4) Check on buy-back terms
Always find out what your jeweller is willing to offer you if you return the jewels at a later date and exchange it for a more contemporary design. Now, most top jewellers promise to buy back gold at the then prevailing rate if you decide to exercise this option.
Yes, you won't be compensated for the wastage that you paid for and/or for the making charges, but you at least have an assurance that the actual weight of gold in the jewellery you bought is something you will be able to cash in during an exchange.
Ensure that there is also an exchange and buy-back period and policy and that you are aware about it. This will ensure that you can return your ornament in case you have any grounds for complaint.
5) The bill, please
To ensure all this, do insist on a bill. Yes, you will have to pay GST and share your PAN/Aadhaar details too if you are making a big purchase - but a bill ensures transparency and provides you assurance. Remember, it is proof in your hand if you are forced to approach a Consumer Court.
* By the way, if you are looking to buy physical gold for investment purposes, buy gold coins or biscuits. Many jewellers are waiving off extra charges on coins and offering it at the regular price of gold, with whatever price discounts are on offer.
Happy Akshaya Tritiya and may your gold purchase be one you look back upon with happy memories.
One jeweller offers chance to win 25 Mercedes Benz, other top jewellers roll out discounts too
When does India buy its gold?
What drives gold demand in India?
Find out which brides wear the most gold in India?
How to maintain jewellery during the monsoon
Gold jewellery Malayali brides favour
The gold jewellery that Tamil brides favour
|Gold rate in india |
Get latest gold rates on the go with the Gold Rate Now App on your Android smartphone. Click here to download.