When looking at different bullion dealers, one issue many people never really consider is the dealer’s buyback policies and/or procedures. Bullion dealers are in the business of buying and selling bullion bars, coins and rounds. Many dealers are happy to buy bullion from customers. Remember, a precious metals dealer looks to profit from the spread between the dealer purchase prices and the dealer sales prices. This is regardless of what the current spot price may be doing. It is a dealer’s job to buy and sell bullion.
Now, that being said, there are some specifics that must be observed when selling bullion back to a dealer. We will outline some of these procedures or steps here. It is very important to remember, however, that different dealers may have different procedures. It is extremely important, therefore, that someone looking to sell bullion familiarize themselves thoroughly with the dealer’s buyback program.
A dealer will require a credit card when someone is selling bullion to them. Why does the dealer need a credit card if they are the one buying? The answer is quite simple. Once an agreement has been made for the sale of the bullion, the price of the sale is locked in. Now, if someone sells an ounce of gold for $1,310, and the price suddenly rises to $1,400 and they default on the sale, the dealer can charge the credit card for the difference. Obviously, the need for the credit card is to help ensure that the seller holds up his or her end of the bargain.
Needless to say, if the seller delivers the bullion as agreed, their credit card will not be charged anything. In terms of the actual sales price, online dealers will usually lock in the price upon acceptance of the agreement. The seller will then have a specified amount of time to deliver the bullion to the dealer. It is important for sellers to know that they will be responsible for shipping and insuring the bullion en route to the dealer. In addition, the dealer must receive the bullion within a specified time period. If it is not received, then the dealer may cancel the transaction and charge the seller’s credit card.