Did I witness a ripoff?

[Immy]

Mentioned I was at a coin show yesterday. With silver going up and up, I think I'll see more scenes like the following -

An elderly man was at a dealer's table selling silverware; knives and forks. I stood by and eavesdropped as the sale went down. Once they got the total ounces tabulated the dealer said "67 ounces at $13.20/oz. equals $884." I took out my calculator and figured out he was buying at 73.333% of spot! Now I don't know if the value of silverware is figured differently than coins but I've always understood that anything less than 85% of spot is not a good deal. Did I witness a real shafting? Silver was @ $18/oz. on Friday's closing.

 

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[solariscool]

sterling silver is .925... so .925 of $18.00 is $16.65. So the dealer got it about 3 bucks under melt. Not toooo bad of a shafting but I wouldnt have sold at that price.

 

[Immy]

Hmm, interesting. Thanks for the info, solariscool.

 

[jewelerdave]

as someone who does refining and has bought a lot of silver that was a safe bet on both sides. Just because it says .925 does not always mean it is .925
Unfortunately not everyone is honest. the last Batch of scrap .925 I sent in for melt averaged out being only 86% and yes this is a reputable refiner.
If you tell a refiner that the other half of the bar was sent to another refiner you always get straight results.
Other refiner, same deal. 86.2% fine.
So, did both refiners manage to screw me? or did someone screw me years ago when the silver was made?
This was also on a lot of over 60pounds of silver, So something somewhere was bad, or a lot of things were under karat.
A lot of sterling is .900 coin. As thats what was found with ease at the time. Some coin is 800 fine, some is .720 some is .500 and as we all know, some is as low as .400 fine

Tell me all people in the world are honest or extra careful about alloying when it comes to making pounds upon pounds if not tones of stuff...particularly on something like sterling flat ware, or cheap jewelry. Or an honest mistake was made in alloying, bad math etc.
There is a reason why the offer is what it is. Its based on supply and demand. not everyone can get .98% of the silver value from the refiners. And if it was deemed a fair deal on both sides. thats all that matters. We can never get spot for Aluminum. or Iron, or Copper. So why get hung up on silver or gold?

 

[boogeyman]

Thanks Dave!

Never thought of telling the refiner / buyer the other half or bar went to another!

 

[jewelerdave]

Great way to keep someone a refiner honest. There are enough small refiners out there they cant all talk to each other.
It only works though if you can make the bar yourself or melt it all together. there will always be a bit of difference as most melted bars particularly larger ones, are never even.
I also like useing only a refiner that pays after the results of the whole lot are known.

One method used my some is to drill a few holes at different places in the bar and assay the drill scraps, It gives an average. And they pay on that.
Some used to just grab a bunch from the top and pay on that if it was filings. I talked to one old guy once who when he sent in scraps he would always take it in upside down after riding in his truck, that way when the barrel was there to be sampled, all the heavy stuff was at the top when they did the sample to pay him, and he always did well, when before he did poorly.
Yet another reason why I always make them process it out, and why when I buy I like to process it out, there is so much under karat and off karat stuff, I like to know what I am buying and selling.