There's Gold in those Jewelry Donations!
Multiply your profits
This post is also available as a free PDF, and on YouTube.
Grow revenue by digging deeper into donated jewelry!
It is truly amazing how much jewelry is donated to and sold by thrift stores every day. You’ll find everything from Madi-Gras beads to costume jewelry, old keys, political campaign buttons, and yes, platinum and diamond rings in those globs of tangled-up stuff.
When I started in thrift a decade ago, donated jewelry mostly went in glass jars to be sold in bulk, generally for ten to twenty dollars each. The go-to jar was flower vases, it was a good way to repurpose some of them as well.
It was quick easy money as they sold as fast as we could put them out.
Eventually, I wondered why they were so popular. I had been told crafters bought them for projects. That made sense but their popularity suggested something more.
Always liking to see first hand, I dug through a few batches of random jewelry. Every single time I found sterling silver and occasional gold items. Things like the sterling silver spoon twisted into a ring, Native American pendants, silver belt buckles, delicate gold chains, silver coins, and more.
I’m not particularly into jewelry, a gemologist, or even a metals expert so who knows what else I was missing? I finally understood why those jars were such hot sellers, and how much value we were giving away. They were buying a treasure hunt and winning nearly every time.
My favorite was an 1880s silver dollar attached to a belt buckle. The whole buckle was so black it didn’t look like anything. It almost went into scrap but I took one more look and there it was, a real 1800s silver dollar that we sold for $300. Oh yea, the buckle was sterling silver as well.
The funny thing was, it had a $1 garage sale sticker on it. I wonder how many people didn’t notice that little treasure.
This is a video from a person that showed what he found in a bag of random jewelry at a thrift store, gold, silver, and gemstone. I think he missed some collectible vintage jewelry and the Seiko watch he tossed aside should have been looked into further. He was all about gold and silver and obvious gems.
When we quit selling those jars of jewelry a few years ago a lot of customers (mostly resellers) were quite upset.
If you are running a thrift operation your first responsibility is to capture value for your cause or company. As much as I appreciate the value resellers add to thrift store success, it isn’t the job of a thrift store to fund other small businesses' bottom lines.
A few online jewelry examples:
A Ruby Lane listing had a triple string of blue beads. It just looked like blue beads to me but it’s Tanzanite listed for $950.00. That’s a great example of the value that can be missed in the donated goods sorting and sales process.
Etsy has over 21,000 pieces of Bakelite jewelry for sale as of this writing. To the untrained eye, Bakelite looks like a piece of normal run-of-the-mill costume jewelry. I wonder how many of those items came out of thrift store jewelry jars?
A recent check of jewelry for sale on Shop Goodwill showed over 5,000 pieces listed. All found in donated jewelry.
Selling jewelry online is a great way to maximize the value received, but it isn’t the only way to move past glass jars and a few random pieces in a showcase.
Sorting thrift jewelry is a big opportunity.
These days some thrift stores do as much as 10% of their business just in this one category. Yes, some million-dollar-plus stores are doing 100K and more in donated jewelry.
Stores like that have built up a clientele and reputation over time. They have turned themselves into a destination store for second-hand costume and better jewelry.
Where it all starts
It starts with enough inventory, donated or bulk purchased. For now, let’s assume you have a thrift store with a good stream of donated jewelry.
Securing your donations
All donated jewelry should be separated from other donations and secured quickly.
All means all, it does not matter if it’s Madi Gras beads or potential gold and silver. It’s important to get it in its own area, preferably locked up.
It’s the easiest stuff to misplace, or have stolen. We all want to believe in the integrity of our staff, but when things are simple enough to steal many people will. It’s likely more is being donated than you know.
We caught a trusted long-term employee who was stealing gold, silver, and gem jewelry. This was a high donation store so a lot came in each day. He was selling to a local pawn shop, they had quite a win-win relationship.
He wasn’t a jewelry production person, he worked with fresh donations as they came in.
We only caught him after an associate tipped us that we needed to pay attention. He had a way of palming items, turning and slipping items into his pocket or elsewhere on his person, even when working right next to others.
If you work with volunteers or court-ordered community service it’s even more important to secure jewelry quickly.
Is digging through jewelry worth the effort?
A thrift eCommerce manager with jewelry sorters and pricers that I know estimates the ROI on a dedicated jewelry sort and value process and people at over 400%. My experience lines up with hers. That kind of return on investment is hard to find anywhere.
The ROI can be just as good for a single-store process.
Most multi-store thrift operations will do well centralizing all jewelry sorting. For our purposes, we are sticking to a single-store example. It basically scales, just adds some transportation and security components.
People
This works best with people that know and understand this niche. Depending on how much comes in it may be a great part-time position. I have seen very few stores that didn’t have at least enough jewelry coming in to support that. Again, if it’s all being accounted for.
This is an area where experienced staff makes a huge difference. They don’t have to be certified gemologists, it does help if they have experience in the jewelry industry. Often jewelry store salespeople have a sufficient foundation. Online jewelry resellers (our glass jar friends) can become productive employees. More than anything they need to have an interest in and understanding of jewelry.
If you are just starting, chances are you have someone that knows enough to find gold, silver, and other more obvious value. There is someone in almost every store that has that interest and the patience to sort, review, and prep jewelry. In some ways, it can be a tedious job.
When someone tells me they know jewelry, the first question I ask is “What does 925 mean in jewelry?” Then “12, 14, 16, 18, 22?” They have to be able to answer those basic questions to even continue the conversation.
With the right person and additional training, a single store can become a jewelry shopper's destination. There are numerous formal and informal tools available. Since everyone starts at a different place it’s important to match training to need. You will find links to a few articles in this post.
Finding those jewelry gems
The key to finding value is sorting. Thrift stores already sort clothes, housewares, shoes, and everything else that goes to the sales floor. Jewelry is similar, just smaller.
Someone responsible for regularly going through donated jewelry will create a new revenue and profit center.
There are several levels of product you are working to separate.
First is actual silver, gold, occasional platinum, and gems. Sterling Silver shows up all the time. They don’t win the game on their own but they sure help.
Most common, and not to be ignored is the everyday costume jewelry. Think Clair’s or even Target and Kohl's. Good-looking stuff at a value price. These might be priced at two to five dollars in a thrift store. It’s an easy add-on sale for a store that already sells clothes, shoes, purses, and other fashion accessories. Depending on the market, this will represent 80 to 90% of jewelry piece sales. More about merchandising these later in this post.
Then there is name-brand jewelry that can be priced higher. Vogue has a great article about designer jewelry. A Tiffany necklace will sell several times a similar design without the brand affiliation.
Next is vintage jewelry. This is easy to miss without a trained eye. This post and website are a treasure trove of vintage jewelry info. This is something to worry about with a more established staff and operation.
Even after all that, there is more money to be made with broken bits and pieces, broken watches (a whole other story), and even single earrings. This is where the tried and true glass jars of miscellaneous come in. Crafters really do buy those, as do the treasure hunters hoping you missed something.
If you are starting don’t try to capture everything at once. Start with everyday stuff, precious metals, gems, and maybe obvious high-end brands.
Don’t sweat the rest until you have a good foundation built. Some of your customers might get a great deal, but they already do in the rest of the store.
Jeweler’s tools make the job work
Every professional needs professional tools. You need:
Precision jewelry scales — This allows you to get exact weights on precious metals, important information when selling these goods.
Gem testers — Not all that glitters is a diamond. Correctly identifying what looks like a gem will greatly aid pricing and integrity with customers. Some stores photograph the tester result and place it with the item.
Precious metal testers — Just because something says 925, or 18K doesn’t mean it is. Test for yourself for the same reasons you need a gem tester. There is this little fraud trick I have run across where the clasp is labeled 18K, but only the clasp is that. The necklace might be lower-quality gold or even just a plate.
Hardness testers — These are often used with semi-precious stones to verify what they are.
Loop — Those numbers and tiny numbers and letters can be hard to see with an unaided eye. I suggest keeping a loop at the counter for people to view their items.
Good lighting - Specifically lighting on the table used for sorting. Lights that mimic daylight are best. It’s so helpful in spotting real gold, and reading tiny print. An example, again not an endorsement.
Jewelry cleaners and polishes — To make things look their best for display.
Macro lens for your camera — If you are selling online, sharp close-up pictures are critical. A 4k or 8k camera is also basically a standard today.
With the right tools, it’s easy to put items out for sale with high confidence each item is what it is advertised to be.
Merchandising
The everyday bread and butter is cheap costume jewelry that sells for $2 to $5.
These sell best individually carded and displayed on a bulk spinner rack or a slat wall.
One of my pet peeves is cheap jewelry in locked cases. Yes, it reduces theft. It also increases staff labor costs while they open cases, get stuff out, stand there while someone looks over a $5 ring like they are deciding on a wedding ring, then can’t decide and come back later. The gain is not worth the pain. If you have display cases, use them for your silver, gold, and better stuff. Take the risk on the rest.
The easiest way to display them is carded on spinners or a bulk display is on display cards, they are available for earrings as well as Necklace display cards. (Not endorsing just an example)
Most thrift shoppers are not willing to pay a thousand dollars for a diamond and platinum ring in a thrift store even if it is an amazing value. These can be a tough sell and a security concern even in a glass case in a store.
Not many of those will come through, it may make more sense to sell those occasional one-offs online. That will get you the most bang for the buck and be safer.
Those in the Goodwill Enterprise often find success at Shopgoodwill.com. Ruby Lane as previously mentioned is good for the higher end. Amazon or eBay can work but may not be best for higher-end jewelry.
The key to success is finding the right platform for the type of jewelry. Etsy is more open to jewelry than they once were. Especially vintage.
Security
As mentioned earlier, jewelry is easy to conceal and it can be lost in the flow of general donations.
Some sort of lockup in the donation area is key. This is the area of highest theft. It can be as simple as a cabinet with a locking drawer with a wide slot cut in the top or a safe with a loading door like this one (Again, not endorsing, just an example) $500~ seems like a lot, but that can be earned back with one real diamond ring.
Even if you don’t have a CCTV system, having something as simple as a ring camera watching donations and jewelry processing can act as a deterrent.
Even though jewelry sorters are generally highly trusted employees, I believe in the “trust but verify” motto. Some best practices include:
Only authorized people in the jewelry work area. No visitors.
No personal items in the work area including purses, lunch bags, snacks, etc.
If possible close off the area or at a minimum tape off the floor of the area to designate the space. A room dedicated to jewelry is ideal, but often not realistic in a store.
Have a camera covering the area that records 24/7.
Unprocessed jewelry should be in a locked cabinet of some sort only accessible by management and maybe the processor.
High-value finds should be logged, verified and dealt with promptly.
This is a great article about internal retail theft in general.
Almost any metric you use, sales per square foot, labor percent, add-on sales, or donated jewelry is a winner.
If you are doing a little, see how you can ramp things up. If you are still a glass jar seller, there is a ton of opportunity waiting for you. Go through a few jewelry donations yourself, you will be amazed.
This post also available as a free PDF.
Thanks for reading.
Tim Gebauer
Thrift Retailer - Dedicated to the business of thrift retail.
I am happy to connect on LinkedIn.
Check out some great custom artwork at my Redbubble site.
Check out my Online Sellers book on Amazon
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This blog post also available as a free PDF, and on YouTube
A quote:
“A computer can tell you down the dime what you’ve sold. But it can never tell you how much you could have sold.”
Sam Walton, Founder of Wal-Mart