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Enough Of Getting Cheated

Discussion in 'Snippets of Life (Non-Fiction)' started by jayasala42, Sep 30, 2021.

  1. jayasala42

    jayasala42 IL Hall of Fame

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    Gold Jewellery shop is a place where we get cheated with our full knowledge.Some people visit only certain shops considered as lucky( rasi) for them.It is better to be cheated by a known 'rasi' fellow.

    Let us see how we get cheated.

    An agent taking an order for a jewellery of 100grams. has to go to a goldsmith and provide him at least 130 grams of gold simply because no goldsmith can make 100 grams articles with 100 grams gold. The goldsmith makes the items and returns the excess gold to the agent. The goldsmith charges around one percent as wastage because it is natural that some gold or gold dust will become wastage in the process of grinding or chisling the gold while making the item. However, this quantity will not be more than 0.25%. Further, the gold dust collected in the shop again will be retrieved by the goldsmiths after some time.

    . The goldsmith of course has to be paid labour in the form of making charges depending on the design and the labour involved. For some intricate or delicate designs, the making charges will naturally be more.

    Whatsoever, the wastage at goldsmith shop cannot exceed one percent. The agent( the jewellery shop) who took the order for 100 grams item had to invest for 130 grams and also bore the interest on his investment. Then there is the cost of his running to the goldsmiths often and often as no goldsmith will deliver the items on the promised date. In many cases, the agents also have to bear the fluctuation in gold market.

    For all this trouble, the agents charging 4 to 5% wastage can be justified in the face of price fluctuations, risks and their livelihood.


    Why charge wastage between 10 to 20%? It is the open secret that these “Big” merchants prepare the ornaments in their factories or workshops. As the ornaments are manufactured in bulk and as they do not depend on the local goldsmiths, they will not suffer any loss in gold. Besides, the items are made in large quantities and therefore the wastage is either nil or minimal.

    Also sometimes, these ‘big’ merchants import fancy items like chains, bracelets etc. and charge huge wastage up to 20% in spite of the fact that they buy such products as per the weight and purity of the ornaments. Even the making charges are paid by the importers.

    Interestingly, the ‘Big Merchants ‘do not charge profit Margin! All they charge is the wastage, making charge etc. They pose as if they do not need profit and theirs is a service based business. This is simply unthinkable. How could a big merchant who invests hundreds of crores to start the business, forego his profits? If we look at the interiors of these jewellery stores, one can establish the fact that crores are spent for interior decoration. In addition, these shops are in posh roads and areas where they shell out skyrocketing rent prices. In T. nagar alone, there are around hundred shops who have invested hundreds of crores into the business. Obviously, they do not charge any profit simply because their wastage and making charges etc are exorbitant. They are assured of a minimum profit of atleast 20% on the business

    Making charges constitute another big fraud. Sometimes, they charge the making charges on per gram basis and sometimes, the charges are in lumpsum. When they charge ‘wastage’ for making ornaments, where is the question of making charges again? One can understand the making charge in respect of ‘Made to Order’ items as it may consume more labour because of a specified designs etc. But this can not be said in cases of mass produced ornaments in factories or workshops. Making charges in addition to wastage beats any known levels of logic or reason.

    Further, the bonding element charges which vary between Rs. 50 to 100/- per gram are shocking. Earlier the ornaments were soldered with lead, but now, everybody uses cadmium, for bonding. Cadmium, popularly known as KDM does not harm the gold and as such, when the ornaments have to be sold by the consumers, the ‘normal’ wastage will not be applied. The cost of KDM is around Rs. 10,000/- per Kilo Gram, where as, the merchants who use KDM for soldering, charge between Rs. 50/- to 100/- per gram of ornament towards KDM charges. In a way the KDM charges are bonus over the profits to the merchants.

    Weight of stones charged at gold rate!

    In most ornaments precious stones are used which have its own rate depending on the quantity and quality. While a few stones like diamond, Topaz, Pache etc. command high rates, other stones like pearls, American diamonds etc. have much lesser value. But they get the cost of the stones and also per gram gold rate for the stones since they are included in the final weight of the ornament. It would also fetch them additional wastage and making charges which they charge per gram of the ornament.


    About the purity, the lesser said is better. The Central Government has stipulated that 22 carat implies 91.6 purity as mandatory. Thereafter, these big merchants bang around that they are giving pure gold of BIS Hall mark quality. But the facts are to the contrary.

    It is the ‘purity’ of gold that leads to multibillion frauds. .It is well known that ornaments can only be made of it by adding copper. The quantity of copper used in ornaments decides the purity of gold. Normally 8.4% of copper is added with pure gold that is 24 carat, and that implies usage of balance 91.6% of pure gold for making ornaments and this is the standard ornament gold purity. As the purity of gold is described in carats, this ornament gold will be 22 carat. And this is the Hallmark specification. There are also 20 carat, 18 carat and even 16 carat ornaments available depending on the copper used.


    The purity of the gold can be accurately ascertained only by melting and by no other means can it be ascertained. In the case of purity test done at the merchant’s stores, the instrument runs rays over the surface of the ornament and gives the result. The rays do not pierce through the inner body of the ornament and this is a fact. Therefore the purity of the gold cannot be true and accurate.

    Presently the gold is mixed with some other powder/metals in addition to the usual copper. Erodium powder is a common element that is added to ornamental gold and it can still pass the purity test. As stated earlier about 8.4% copper needs to be added to pure gold and here the merchants also add about 4 to 5% of Erodium powder bringing down the gold content to almost 86.5% equivalent to 20 carat gold. Yet, this powder added ornament can easily pass the purity test of 22 carat and the genuine purity test of gold mixed with Erodium powder can be obtained only by melting.

    Of late another metal called Boss metal is also used for mixing with gold to make the ornaments. Unlike the powder, the Boss metal provides softness to gold and there will be no change in the colour. The quantity of Boss metal mixing is usually very high that is up to 20% and interestingly the ornaments made by mixing this metal in addition to the copper also pass the 91.6% (22 Carat) purity test. And here too, it can be ascertained only through melting. Eventually, one pays for 91.6% purity and gets ornaments of about 70% purity.

    In case of genuine 91.6% gold, the consumer will be paying about 120% cost which includes wastage, making charge, KDM etc. In case of Erodium powder, the consumer pays 130% for 86.1% purity and 140% for Boss metal mixed gold ornament of 70% purity. Can anyone understand these calculations? Definitely not. All one needs is an ornament. Nobody can make out head and tail of the gold business.

    The deplorable fact is people bound by customs and traditions are silent spectators to this massive fraud and are prepared to digest the hard facts.

    The gold ornaments which shine in the shops become a source of misery and depression as soon as it reaches our hands.There is a sense of threat to safety and security.Locker rent becomes an additional expenditure

    The only way is to totally avoid wearing gold . We can escape from from fraud, theft and murder too.We have to simply throw away the tradition, auspicious beliefs and boycott jewellery as a matter of principle.If needed for investment, can we invest in gold coins?.It is said that they charge wastage and making charges for coins too.Perhaps think of gold bonds!
    Better bid a good bye to gold.
    But does not seem to be a possibility in the near future considering the heavy rush in all the jewellery shops notwithstanding all the known fraudulent practices.

    Enough of getting cheated!( Emaanthathu pothume)
    Jayasala 42
     
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  2. Thyagarajan

    Thyagarajan IL Hall of Fame

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    Despite knowing all this, people continue to flock to these huge showrooms and small traders because they can not wish away the tradition.

    When I was confronted with a bill, I found they had included huge amount as wastage, so I insisted to handover me the entire waste, then I would pay the billed amount. The sales man went to supervisor and then supervisor went to his boss and finally the super boss.

    After lot of arguments and an additional hour in the shop eventually they had agreed to reduce the wastage charges considerably. My family and daughters and few of my kids were unhappy with my stand. It was getting late for lunch!

    There is no way to determine the quantum of real wastage and therefore the jwellers charge indiscriminately. Hall Mark is humbug. Despite hallmark, despite huge expenses in maintenance their huge shops, despite in posh localities there is huge profit to make. Even that baldman proclaiming he is the cheapest is not really cheap. There was complaint that some cladded jewels were sold as 22 carat.

    The price of gold daily revised around afternoon when bullions rates are announced in London Metal Exchange. For gold purchased long back, they charge rate based on prevailing pure gold rate. Pure gold is 24 carat.
     
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