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How to Save Money on Gold Making Charges?

Updated Sep 13, 2024

Gold jewellery is something that all Indians love to buy; whether it's for investments, a wedding, or a gift, gold is always special.

Due to such demand, gold prices in India rose by 8% in the first quarter of 2024 (1). Now, one factor that adds significantly to the costs is “Making Charges”

What are Making Charges?

Making charges are the fees charged by jewellery shop owners for the labour involved in creating a piece of jewellery. These may vary according to the design complexity, the jeweller’s reputation, and the type of jewellery.

Typically, making charges are either a fixed amount per gram or a percentage of the gold's value.

Now, the price of a gold jewellery piece is determined by

Gold Rates + Taxes + Making Charges

Gold rates and taxes are pre-decided and can’t be changed or negotiated. But making charges is not fixed and is the only way to save money while buying gold jewellery! How?

In this blog, we will share some tips that will help you save some money on gold-making charges.

First, let’s start with a quick overview of how making charges are calculated.

How Making Charges Are Calculated?

As already said above, the making charges for the jewellery vary according to many reasons.

If it is calculated as a flat rate per gram then the charges would be different from when calculated as a percentage of the jewellery’s value. In India, the making charges for gold jewellery vary between 3% to 25% and are calculated according to the below formula:

Gold rate x weight of gold (gms) + Making charges + GST

Let’s understand it with an example.

Imagine the cost of 1 gram of gold is ₹6000. Now, you have bought a gold chain weighing 9 grams.

Cost of Chain: 6000 * 9 = ₹54000

Assuming making charges at a rate of 8%

So, the cost is 8% of ₹54000 = ₹4320

Cost of Chain + Making Charges= ₹58320 (₹54000+₹4320)

Applicable GST = 3%.

So, 3% of ₹58320 is ₹1750.

Total amount of 9gm gold chain= ₹58320 + ₹1750 = ₹60,070.

Tips To Save Money on Gold-Making Charges

Here are a few tips that would help you to save some money while buying gold jewellery.

Choose Simple Design

When buying gold jewellery, try to choose a simple design rather than an intricate one. Because the more intricate the design is, the more craftsmanship it would need. So, the making charges will also be higher for the jewellery.

Negotiate Making Charges

Making charges can often be negotiated with your jeweller. Since these charges can vary, it's worth discussing them to get a better deal. Also, to get the best price, visit different jewellery stores to get a better understanding of the making charges and select the jeweller that seems the most reasonable.

Pro Tip: Take references from your friends and family for the jeweller. Personal referrals can save you time and help you find trustworthy jewellers who might be more willing to negotiate making charges.

Buy Gold Coins or Bars

If you only want to buy gold as an investment, consider getting gold coins or bars instead of jewellery. These usually have lower making charges and are also easier to sell when you need cash. This makes them a smart choice for investors looking to get the most value for their money.

Buy During Sales and Promotions

Sales and promotions are some of the best times to buy gold, especially during the festive season. Jewellers often lower making charges and steal deals during these times to attract more customers. Keep an eye out for these to get the best price.

Important Point To Remember While Saving Money on Gold-Making Charges

Do you know a US woman in Jaipur was tricked into buying ₹300 gold jewellery for 600 crores? (2)

Gold scams are, unfortunately, very common in India. This is just one example of many gold scams that happen every year in India. Some jewellers attract customers with attractive discounts but compromise on the quality of the jewellery.

Here are some tips to avoid falling into such traps when buying gold jewellery:

Always buy gold from well-known and trusted jewellers.
Hallmarks are official marks that certify gold purity. Ensure the jewellery is hallmarked.
Always request a detailed receipt that breaks down the cost of the gold, making charges, and any other fees. This helps you understand exactly what you are paying for and ensures transparency in the transaction.

Pro Tip: Some jewellers might offer you a kacha bill (an unofficial receipt) so as to save on taxes. But never fall into that trap and take a proper GST bill, as it ensures that you are protected as a consumer and provides proof of purchase.

Conclusion

Saving money on gold-making is possible if you understand how making charges work, choose simpler designs, and shop during sales and promotions to lower costs.

So, the next time you buy any gold jewellery, use the tips shared in this blog and thank us later!

Frequently Asked Questions (FAQs)

Why making charges are high for gold jewellery?

Making charges for gold jewellery depends on the design. The more intricate and detailed the design, the higher the making charges. This is because complex designs require more time, skill, and labour to create, which increases the cost.

How to save money on gold-making charges while buying gold jewellery?

Opt for simpler designs, compare prices at different jewellers, buy during sales and promotions, and negotiate with the jeweller to get the best deal.

Can we negotiate making charges?

Absolutely, yes! As a buyer, you have all the rights to negotiate, making charges to get the best price on your jewellery.

What is a hallmark, and why is it important?

A hallmark is an official mark that certifies the purity of the gold. Buying hallmarked jewellery ensures you are getting the quality you are paying for and also helps you avoid scams.

What factors affect the price of gold?

The price of the gold will depend on, such as chosen Carat and location.

The higher the karats of your gold, the higher the price. For instance, the price of 22 Carat Gold will be higher than 18 Carat Gold.

Also, the cost differs from city to city. For instance, the gold price in Delhi would not be the same as the price in Kolkata.

References:

https://www.livemint.com/market/commodities/indias-gold-demand-rises-8-rbi-buys-19-tonnes-in-march-quarter-world-gold-council-11714481362091.html
https://timesofindia.indiatimes.com/city/jaipur/us-woman-duped-out-of-rs-6-crore-by-jaipur-jewellers-with-fake-jewellery/articleshow/110931567.cms

Written by Saad Ahmad

Saad is a marketing guru and has some exciting knowledge to share about the motor and related industry. Read More

Disclaimer

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.