Steps toward maximizing your metal returns

By Shawna Kulpa

For a business owner, there are few things worse than leaving money on the table. And it’s something that many jewelers worry about when it comes to refining the precious metal waste in their shops. Are they collecting everything that they could be, and are they organizing the scrap, sweeps, and other precious metal waste in the best way possible? Are they doing everything possible to maximize their return? The following are some steps jewelers can review to make sure they’re not missing any metal (and losing profits) when sending out their lots.

Track Your Inventory

> One of the best ways to estimate what you’ve got in a refining lot is to keep close track of your inventory: If you bought X ounces of metal, sold Y, have Z in stock, and have fully accounted for metals held at outside locations (such as at fabricators, on consignment, or in salespersons’ lines), the difference should be contained in your scrap. (“Should” is the operative word, of course: Poor ventilation, a careless step, or sloppy cleanup can let precious metal dust slip through your fingers. More about this in a minute.)

> Also, keep a record of tare (incoming weight of raw metals) and finished weights of every piece at each step in the manufacturing process. This will allow a close tracking of your expected refining outcome and help to discover early any unexpected shortfalls.

Capture As Much Metal As Possible

> Cover wooden floors, which trap and hold precious metal fines, or you won’t get that money back until the boards are ripped up.

> If possible, install carpeting in areas where precious metal dust is generated: The fibers will trap metal particles. You can also try putting extra carpet remnants at areas that produce large quantities of dust (e.g., in front of the buffer, under the jeweler’s bench). At the least, cover wooden floors with linoleum tile, which has fewer cracks.

> Fabric-covered chair cushions also can be added to refining lots when they’re in need of replacing.

> Try replacing the tops of wooden benches, which will also have cracks that can easily fill with metal dust. Use a top made of a nonporous material, such as Formica, and be sure there’s no space between the benchtop and the back of the bench. Also, when it’s time to replace an old bench, be sure to send it to the refiner.

> Make sure to toss in with your sweeps any paper towels and rags used to wipe down shop surfaces.

> Install a commercial dust and metal collection system in your shop, and check your dust collectors weekly.

> Have vacuums dedicated specifically to bench or buffer sweeps—a larger household vacuum for buffing stations and other areas where grinding occurs, a hand-held vac for the bench.

> Many dust collection hoods at polishing lathes have a screened opening to keep parts from flying into them. That screen, an effective lint trap that restricts the amount of air that enters the dust collector, should be kept clean at all times. When the air flow is reduced, small particles of metal will become airborne, flying around the shop instead of into the collector.

> Install settling/filtering systems in your sinks’ drainpipes—this is a must! The sludge from sink traps should be regularly removed and included in your lot for refining. Also, account for all solutions from ultrasonics, steamers, mass finishers, plating units, etc. Any liquids should be allowed to dry out as much as possible, since refining and shipping charges are often based on weight.

> Precious metal can hitch a ride on the bottoms of your and your employees’ shoes or on your clothes. Place floor mats at the exits from areas that generate a lot of dust, such as polishing. This will scrape the particles from the shoes’ soles, and the mats can be sent for refining. Also, try to launder aprons and shop towels regularly in sinks outfitted with filtering systems, and use those sinks only for laundering—don’t use the sink to dispose of dirt, sand, or other waste. In some shops, employees are given specially designated clothes, which are then periodically refined.

> Put adequate training and security systems/procedures in place. Make sure, for example, that employees know NOT to mop up the floors and then dump the wastewater down the unfiltered toilet (yes, this has happened). Also, some shops have instituted systems in which employees must check out any metal they use from a central location, ensuring adequate tracking.

Segregate, But Don’t Go Crazy

> One of the best ways to maximize your refining returns is by keeping your scrap segregated. Since refining platinum group metals (PGMs) requires different chemicals and processes and even assaying methods than gold and silver, separating PGMs out of your gold and silver scrap (and vice versa) will go a long way in reducing the charges for refining. Try to keep individual, labeled catch trays for each type of metal you use.

That said, it’s not necessary to keep all scrap segregated by karat and color. For example, there’s no need to separate your 14k yellow gold from your 18k white gold. While doing so may help to give you a clearer idea of how much precious metal you’re sending in, allowing you to better estimate the payout, it can cost you more in the end because of the way the refiner processes the lots. Many refiners charge more to process multiple smaller lots than one large lot. If you do keep all of your precious metals separated for bookkeeping purposes, consider combining all of the gold and silver scrap into one lot prior to shipping it out for processing.

> One thing that should always be kept separate is scrap metal from general shop sweeps, such as dust swept off the shop floor or paper towels used to wipe down shop surfaces. This is because the sweeps may contain combustible materials that will need to be burned off before any precious metals can be recovered.

> Remove iron and steel from your lot. Ferric content may lower your return, since iron has a high melting temperature and is more difficult to melt and assay. That means broken saw blades, burs, and even the little steel springs in old worn-out clasps can contaminate your lot—and impact your bottom line. One of the best ways to separate ferrous metals from your sweeps is by using high-power rare earth magnets. These magnets are easily available on the internet, and because of their strength can attract a lot of nonprecious metal for their size. (They can also attract platinum cobalt alloys, which are slightly magnetic.)

> Extend the metal segregation to your vacuum cleaners: As much as possible, use separate vacuums for specific metals.

> Buffing and grinding materials may add up to a greater percentage of your scrap than you expect. Try to isolate this low-grade scrap from your clean scrap. Have the refiner test this scrap separately, rather than mixing it in with your higher grade gold, PGMs, and silver.

Sending Lots and Keeping Track

> When to send in a lot for refining will ultimately depend on the size of your operation and how much scrap you’re regularly generating. Smaller lots tend to cost more to process, so it’s often in your best interest to hold off on sending in scrap until you have a decent sized lot or you need to replenish your inventory with fresh new metal.

> Try to send your carpets out for refining every four to five years—the money you’ll recover will often pay for their replacement. Send on a more regular basis any extra remnants you’ve put in areas that generate high quantities of metal dust.

> When sending your lots, use hard, sealed containers that are rated strong enough for the weight they will hold. Mark them with your company name, address, phone number, and primary contact information.

> Don’t be afraid to tell your refiner how much you think the lot is worth. By communicating your value estimate or weight calculations on the front end, you go on the record with what you expect in return. If the final number isn’t close to your estimate, your refiner should be willing to work with you to figure out why.

> Keep records of the refining lots you send out for processing. These histories usually contain starting weight, process weight, metals market statistics, and your return. Keep this information easily accessible so you can compare returns and get a sense of patterns.

Ask for Help

> If you’re unsure about your workshop housekeeping methods, don’t be afraid to ask your refiner for their help. Most refiners are happy to help their customers identify weak points in their shops where precious metals could be lost or go uncollected. You can often arrange to have a representative from your refiner come in to your shop to review your setup and offer suggestions for ways that you can improve your precious metal collection.