Is cash for gold legit in South Africa?

Selling your gold for cash is legal and ordinary. What matters is whether the buyer is legitimate. A compliant buyer holds an SADPMR licence or permit under the Precious Metals Act 37 of 2005, a SAPS second-hand goods dealer registration under the Second-Hand Goods Act 6 of 2009, and, for trades of R100 000 or more, FIC registration as an accountable institution. Cash itself is not the problem. A buyer who takes cash but refuses your ID and gives no paperwork is.

What is the most common cash for gold scam?

Quiet underpayment rather than outright theft. The usual routes are a low carat price quoted for higher-carat metal, a weight you never clearly see, and a headline “gold price” that turns into a much smaller payout after an undisclosed margin. The defence is to know your carat, watch the scale, and get the melt value and the margin in writing before you agree to anything.

How do I avoid gold buying scams in South Africa?

Know your carat before you go, insist the weighing and testing happen in front of you, and ask for a written breakdown of weight, carat, melt value, margin and final payout. Get at least two quotes, never sell under time pressure, and deal only with a buyer who takes your ID and gives you paperwork. A buyer who does all of this is following the law, not doing you a favour.

Why would a gold buyer not want my ID?

Because taking your ID and recording the sale is a legal duty, and skipping it is how a non-compliant buyer stays off the record. The Second-Hand Goods Act requires a dealer to record who they buy from, FICA requires them to identify and verify you, and section 20 of the Precious Metals Act makes it an offence to buy gold without confirming the seller may sell it. A buyer who avoids your ID is sidestepping all three. That is the clearest scam signal there is.

Seller’s guide · reviewed 27 July 2026

Cash for gold scams, and how to defend yourself

The biggest scam signal is not a low price. It is a buyer who does not want your ID. Taking your identification and recording the sale is a legal duty under FICA and the Second-Hand Goods Act, so a buyer who skips it is stepping around the law, not saving you time. Every other trick below is a quieter version of the same thing: being underpaid on weight, carat or margin. Here is each tactic, and the counter to it.

The tactics, and your counter

Weight and scale tricks

An uncalibrated scale, or your gold weighed fast and out of your sight so you never actually see the reading.

Your move

Watch the scale. Insist you see the weight settle on a display you can read, before any price is discussed.

Karat under-testing

A 9ct price quoted for 18ct or 22ct metal, an unreliable acid test, or a test done where you cannot see it.

Your move

Know your carat first, and insist the test happens in front of you. A 9ct payout on metal you were told is 18ct or 22ct is the tell.

Melt-versus-payout confusion

A headline “gold price” quoted to draw you in, then a much smaller payout after a margin nobody mentioned.

Your move

Get the melt value and the margin in writing. Melt is mass times purity times the rand gold price; payout is melt minus the buyer’s cut. Ask what that cut is.

Opacity

No written breakdown of weight, carat, melt value, margin and final payout, and no explanation of how the number was reached.

Your move

No written breakdown, no deal. A compliant buyer can show the arithmetic. If they will not, walk.

Pressure tactics

Instant cash, a today-only offer, and a gentle push not to shop the quote around.

Your move

Get a second quote. A confident, compliant buyer will not object to being compared. Urgency is a sales tool, not a favour to you.

Cash-only and no ID

A buyer who avoids taking your identification, or insists on untraceable cash with no paperwork at all.

Your move

Treat it as the biggest red flag of all. Sidestepping your ID means sidestepping FICA and the Second-Hand Goods Act, not sparing you hassle.

Why the no-ID buyer is the real tell

Every other tactic on this page costs you a percentage. This one tells you what kind of buyer you are standing in front of. Three separate laws force a legitimate buyer to identify you and keep records. The Second-Hand Goods Act 6 of 2009 requires a dealer to record who they buy from and keep the paperwork for at least five years. FICA requires an accountable institution to identify and verify its customer. And the Precious Metals Act only lets a dealer buy from someone who has shown they are entitled to sell.

So a buyer who takes your ID and logs the sale is obeying the law. A buyer who offers instant cash, no questions asked, is either non-compliant or knowingly working the grey market. Weighing your gold out of sight or shading the carat costs you money on the day. Refusing your ID tells you the whole transaction is happening off the record. Treat it as the signal it is, and sell somewhere else. To check a buyer properly before you go, see how to verify a gold buyer.

Context · why these laws exist

The identification and provenance rules are not red tape for its own sake. They exist to keep illegal and stolen gold out of the legitimate chain. Illegal artisanal mining, the so-called zama-zama economy, feeds gold into local and export markets through organised syndicates, and the state treats it as serious crime.

The cost is contested and there is no single authoritative live number. Secondary reporting has attributed a figure of about R60 billion for 2024 to the Minister of Mineral and Petroleum Resources, while earlier estimates put the loss at roughly R14 billion to R21 billion a year. Read each as a claim tied to its source and year, not as a settled fact.

This is the backdrop to section 20 of the Precious Metals Act 37 of 2005, which makes it a criminal offence, punishable by a fine of up to R1 million or up to 20 years, to buy gold without first satisfying yourself that the seller is lawfully entitled to sell it. A buyer who records your ID and provenance is complying with the law written to choke that illicit trade. A buyer who does not is either non-compliant or working the grey market. That is the honest reason the no-ID buyer is the one to walk away from.

Reported figures are cited to their source and year, not Goldza estimates.

Know before you go

The sellers who get underpaid are usually the ones who arrive without their own numbers. Fix that in five minutes.

Know your carat. SA jewellery is often 9ct (375), 14ct (585), 18ct (750) or 22ct (916). A price that assumes the lowest carat on higher-carat metal is the most common quiet markdown. See karats explained.
Work out the melt yourself. Melt value is mass in grams times the purity fraction times the rand gold price per gram. Our gold calculator does the arithmetic, so you arrive with a figure in hand.
Understand melt versus payout. No buyer pays full melt; they pay a percentage after a margin. The honest metric is what percentage of melt you actually receive, which is the whole subject of what buyers pay.
Get two quotes. A confident, compliant buyer will not object to being compared. Anyone who does has told you something.

None of this makes selling gold dangerous or difficult. It makes you the seller who cannot be quietly underpaid, which is the entire point.

The Goldza desk

General information, not legal or financial advice. Practices are described generally and no business is named. Legal references: Precious Metals Act 37 of 2005 (SADPMR), Second-Hand Goods Act 6 of 2009 (SAPS), Financial Intelligence Centre Act 38 of 2001 (FIC). Confirm current requirements with the SADPMR, SAPS and FIC.

Common questions

Cash for gold scams, answered

Is cash for gold legit in South Africa?: Selling your gold for cash is legal and ordinary. What matters is whether the buyer is legitimate. A compliant buyer holds an SADPMR licence or permit under the Precious Metals Act 37 of 2005, a SAPS second-hand goods dealer registration under the Second-Hand Goods Act 6 of 2009, and, for trades of R100 000 or more, FIC registration as an accountable institution. Cash itself is not the problem. A buyer who takes cash but refuses your ID and gives no paperwork is.
What is the most common cash for gold scam?: Quiet underpayment rather than outright theft. The usual routes are a low carat price quoted for higher-carat metal, a weight you never clearly see, and a headline “gold price” that turns into a much smaller payout after an undisclosed margin. The defence is to know your carat, watch the scale, and get the melt value and the margin in writing before you agree to anything.
How do I avoid gold buying scams in South Africa?: Know your carat before you go, insist the weighing and testing happen in front of you, and ask for a written breakdown of weight, carat, melt value, margin and final payout. Get at least two quotes, never sell under time pressure, and deal only with a buyer who takes your ID and gives you paperwork. A buyer who does all of this is following the law, not doing you a favour.
Why would a gold buyer not want my ID?: Because taking your ID and recording the sale is a legal duty, and skipping it is how a non-compliant buyer stays off the record. The Second-Hand Goods Act requires a dealer to record who they buy from, FICA requires them to identify and verify you, and section 20 of the Precious Metals Act makes it an offence to buy gold without confirming the seller may sell it. A buyer who avoids your ID is sidestepping all three. That is the clearest scam signal there is.