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July 29, 2011
Home "Gold" Parties
Who must be licensed?
The Secondhand Precious Metal Object Dealers and Pawnbrokers
Act requires any individual or organization that buys, sells
or otherwise trades commercially with the public items that
are composed of gold, silver, platinum, iridium and palladium
to be licensed. Also, individuals or organizations that
arrange to sell these secondhand precious metal objects
for a fee or compensation on behalf of someone who is not
licensed are also required to obtain a license. Individuals
who engage in pawn transactions of other tangible property
in addition to secondhand precious metal objects are required
to be licensed. Depending upon the jurisdiction, a pawnbroker
must be licensed either by a local government agency or
the Department of Labor, Licensing and Regulation.
Common examples of individuals who are involved in the buying or selling secondhand precious
metal objects and who need to be licensed are: jewelers, antique dealers, consignment store owners,
auctioneers, or any other individual, business or organization that facilitates the sale of
secondhand precious metal objects for compensation. Other examples of individuals or companies
that arrange or otherwise facilitate the sale of secondhand precious metal objects include:
E-bay Trading Posts or internet trading companies; individuals who in any way organize,
for compensation, events designed to facilitate the sale of precious metal items for others; and
persons who may act as agents who represent individuals who desire to sell precious metal objects.
Are Home “Gold” Parties or Hotel Events Permitted?
No. Legislation passed in 2010 prohibits the purchase of secondhand precious metal objects at gold
parties at individual residences or gold buying events at hotels or at locations other than at the
address that appears on the dealer’s license. Purchases of secondhand precious metal objects are
permitted at judicial or estate sales; and at the residence of an owner of a precious metal object.
It must be emphasized that the only precious metal objects that may be purchased at a residence
are items that are exclusively owned by the resident owner.
Are Home “Gold” Appraisal Parties Permitted?
No, except under very limited conditions. A home “gold” appraisal party is a gathering that is
arranged between a host and a licensed dealer at the home of the host. The host invites friends,
relatives and acquaintances to a meeting where a representative of the dealer appraises secondhand
precious metal object items and quotes a price to buy the items.
The items are not purchased at the residence of the host but are later transported to the
dealer’s place of business by the host or an agent where the transaction is completed. The host
receives a commission or compensation based upon the value of or the number of items referred to the
dealer as a result of the appraisal. These events are not authorized under the Secondhand
Precious Metal Object Dealers and Pawnbrokers Act and are prohibited.
Implications for the Host
The host of the gold appraisal party, because he or she receives compensation for arranging for
the sale of precious metal objects on behalf of other people, meets the definition of dealer under
the Secondhand Precious Metal Object Dealers and Pawnbrokers Act and is required to obtain a license
from the Department.
Implications for the Agent
An agent, whether the agent is the host or another individual designated by the participants in
a home gold appraisal party or event, meets the definition of dealer under the Secondhand Precious
Metal Object Dealers and Pawnbrokers Act and is required to obtain a license from the Department.
Implications for the Dealer
The Dealer, by entering into an agreement to compensate the host or the agent for items the
dealer acquires as a result of the home appraisal party or event, violates §12-207(f) of the Secondhand Precious Metal Object Dealers and Pawnbrokers Act by “lending’ the license to benefit another person. The dealer’s license is not transferable and may only be used to benefit the licensee.
Gold Appraisal Parties - A Summary
A home gold appraisal party or event may only be permitted under very limited conditions.
At no time can a transaction be completed with a person who is not the owner of the residence where the
event takes place. Repeat! Transactions can not be completed with anyone who does not reside
at the location of the event. Secondhand precious metal object transactions involving the non
resident-attendees at a home appraisal party must be personally completed by each attendee at the
business location of the dealer.
The homeowner/ host cannot receive additional compensation from the dealer based upon a percentage
of the value of items bought from attendees at the home appraisal party. The homeowner/host can only
receive compensation based exclusively on the value of the items sold to the dealer that are personally
owned by the homeowner/host.
An agent or person can not be designated by attendees at the appraisal party to transport items to
the dealer’s place of business in return for compensation for doing so.
Important Note
The purchase of secondhand precious metal objects at a location other than the business location
that is indicated on the dealer’s license is limited to estate or judicial sales, or at the residence
of the owner of secondhand precious metal objects.
The dealer is required to submit advance written notice of an authorized proposed transaction that may occur away
from the dealer’s business location, to the local police department in the jurisdiction where the proposed
transaction is to occur.
Authorized transactions that occur at locations other than the business location of the dealer
must be reported by 12 NOON the next business day to both the local law enforcement agency in the
jurisdiction of the dealer’s business address and the jurisdiction of the location where the
transactions occurred.
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