Buying silver jewellery? Know how price is calculated by jeweller, other things to keep in mind

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Buying gold and silver is considered auspicious during Diwali. As gold is an expensive metal, many people buy silver jewellery or coins. The cost of a gram of gold is in thousands of rupees, while the cost of a gram of silver is in hundreds of rupees.
As far as customers are concerned, it would be prudent to know how jewellers calculate the price of silver jewellery and also the other things to keep in mind while buying silver jewellery and artefacts.

Calculation of price of silver jewellery

The amount you pay while buying silver jewellery and artefacts usually includes the cost of jewellery, making charges, hallmarking charges (if any) and goods and services tax (GST).

Dishi Somani, Founder of DishiS Jewels, explains how jewellers calculate the price of silver jewellery. The formula is:
rate of silver per gram x weight of silver x purity of silver.

She explains this with an example. Suppose you plan to buy a silver anklet that weighs 36.040 grams. The jeweller quotes the price of silver as Rs 65 per gram or Rs 65,000 per kg. The value of the silver jewellery will be
Rs 65 x 36.040 x 0.925 = Rs 2,166.91. Here 0.925 tells an individual that the silver anklet contains 92.5% pure silver.

On this price, the jeweller will add making charges, hallmarking charges (if any) and GST at 3%.

Silver jewellery making charges

Somani says, “It is important to note that some jewellers include making charges in the price of silver, whereas some jewellers explicitly mention making charges separately. A buyer must ensure that they have a receipt for the purchase of the articles, clearly mentioning the weight and purity of the jewellery. Hallmark charges, if any, should be mentioned separately.”

For example, a jeweller can say he is charging Rs 75 per gram including making charges. Another one can say the price of silver is Rs 62 per gram, making charges extra. Hence, one must check with the jeweller if the silver metal price being quoted is inclusive of making charges or not.

The making charges can be levied on a per gram basis or percentage basis. For example, making charges on silver jewellery can be Rs 10-15 per gram or 10% of the weight.

Purity of silver

Just like gold has karats, silver’s purity is also determined by its fineness – 999, 925, 900, etc. It refers to parts per 1,000. Silver having a fineness of 999 is considered pure silver, whereas silver with fineness of 925 has 92.5% silver and the balance consists of some other metal or an alloy.

“Usually, lead, copper, nickel or aluminium is used in 925 silver to make jewellery,” says Somani.

Unlike gold, hallmarking of silver jewellery and artefacts is not mandatory. However, a customer can request the jeweller to get the jewellery hallmarked. The charges are very minimal.

According to the Bureau of Indian Standards, “Indian standard on silver hallmarking IS 2112: 2014 specifies six grades of silver alloys, viz 990, 970, 925, 900, 835 and 800, used in the manufacture of jewellery/artefacts of silver.”

Hallmarked jewellery ensures you get the correct quality of silver for the price you pay.

Also Read:
Is hallmarking mandatory for silver jewellery?

Studded jewellery, Meenakari work

These days, buying silver jewellery with diamonds or other precious stones has become a trend. However, one must ensure that the weight of the stone is not included in the weight of the silver and is mentioned as a separate item in the bill.

Somani says, “A buyer must ensure that the bill issued by the jeweller offers the complete description of the product in case of silver jewellery studded with precious stones. The bill should mention separately the cost of the silver metal, the making charge and the cost of the precious stones. The complete description helps a buyer to ensure that the value of silver in the jewellery is not calculated on the basis of the entire weight of the jewellery.”

Similarly, nowadays one can buy silver jewellery or anklets with Meenakari work. However, one must ask the jeweller if it impacts the resale value of the silver.

Rhodium plating

As silver can easily gain a black coating because of continuous wear, jewellers these days offer rhodium plating or gold plating on it. The rhodium coating protects the silver from getting tarnished. Many jewellers may include these charges to the price of silver.

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