Pennyweight (“DWT”) vs. Grams! What does it all mean?
How much am I really getting paid for my Gold Jewelry? How do some gold buyers use the difference between the two measurement systems to mislead the public? Below we provide you with some information that will help you understand the process and help you make good decisions.
So what is a Pennyweight and a Gram?
These are the most frequently asked questions we receive at the Gold Party Girls. Think of it like this. We are all used to saying there are 3 feet in a 1 yard or 12 inches in 1 foot. Same thing. To find out how many inches you have in 1 foot you multiply by 12! To find out how many Pennyweight are in a Gram you divide by 1.555. Pennyweights are still commonly used in the U.S. jewelry industry but we prefer to use the more accurate and globally recognized Grams (metric) as our unit of measure.
There are 31.1 grams per Troy ounce. Again, to convert back and forth from Grams to Pennyweight simply use the number 1.555 either multiplying or dividing by the same 'conversion factor' number. When you are working with 'weight' you divide Grams by 1.555 to find out how many Pennyweight and if you are weighing in Pennyweight, then you multiply by 1.555 to find the weight in Grams. The same with price. If you are given a price per Gram, to find the price per Pennyweight you multiply by 1.555. If you are given a price that you 'suspect' is in Pennyweight, you divide by 1.555 to find the price per Gram! Simple as that!
But keep in mind, no matter whether you are weighing in Pennyweight or Grams the actual WEIGHT OF THE ITEM IS OF COURSE THE SAME! You are just using a different 'unit of measurement'. 1 foot is still 1 foot whether you say it is 1 foot or 12 inches! And 20 Pennyweight weighs exactly the same as 31.103 Grams. 1 Troy Ounce is 31.103 Grams if weighing in Grams and 1 Troy Ounce using Pennyweight weighs 20 Pennyweight again when weighing in Pennyweight.
This is how some buyers manipulate the numbers to pay you less!
They adjust the scale to weigh by Pennyweight which will give them a lower number. If the scale says DWT on the display, they are weighing in Pennyweight. If it says G, they are weighing in Grams. There are some scales that ONLY weigh in grams. Of course, it could be even worse. They could also put some weight on the scale without you realizing it, and 'zero' out the scale BEFORE they weigh your items! Remember if your item weighs 10 Grams, you DIVIDE by 1.555 (the number you use to convert back and forth from Grams to Pennyweight and back) to get the weight in Pennyweight which will be a LOWER NUMBER (it won't weigh less, because the item obviously still weighs the same no matter what unit of measurement you use, grams (metric system) or pennyweight).
So again they weigh in Pennyweight which is a much lower number. Then they simply pay you the Gram price which is lower than what would've been the Pennyweight price! Remember if someone is paying $8.50 per Gram, you find the Pennyweight price by MULTIPLYING by 1.555 to arrive at the Pennyweight price of $13.22 per Pennyweight. Sounds really good, but if you take the CORRECT weight of the item in Grams and pay the Gram price it will be exactly the same as if you had taken the correct weight of the item in Pennyweight and pay the Pennyweight price, the total will be exactly the same.
But many people use the Pennyweight price because it SOUNDS HIGHER and THAT is why it is misleading! You think you are getting more for your gold when in reality, assuming they are correctly and accurately weighing the item, you receive the exact same amount you would've received if they were using the Gram weight and Gram price! Of course when they are mis-weighing the item or weighing in Pennyweight and paying you in Grams that is an entirely different scenario where you are being taken advantage of.
Weight - Gram weight divided by 1.555 equals Pennyweight, and PennyWEIGHT multiplied by 1.555 equals Gram weight
Price - Pennyweight price divided by 1.555 equals Gram price and Gram price multiplied by 1.555 equals Pennyweight pricee.
So now to the nitty gritty, how do some of the other people do it?
Assume you have 1 Troy Ounce of PURE GOLD and price is $1,000 per Troy Ounce (again 1 ounce of pure gold, not 14k gold jewelry which is only 58.3% gold). So this means you have 20 Pennyweight or 31.103 Grams of PURE GOLD because a Troy ounce contains 20 Pennyweight or 31.103 Grams. 20 Pennyweight and 31.103 Grams are the exact same weight, just a different way of measuring!
$1,000 divided by 20 pennyweight worth of gold (pennyweight in Troy ounce) = $50 per Pennyweight
With 20 Pennyweight of pure gold you would expect to be paid $1,000.00 (20 x $50 = $1,000).
$1,000 divided by 31.103 grams worth of gold (grams in an Troy ounce) = $32.15 per Gram
With 31.103 Grams of pure gold (same as 20 Pennyweight) you would be paid $1,000.00 (31.103 x $32.15 = $1,000).
When you are weighing and paying using the same unit of measurement the amounts you would get paid would be the same. BUT if you weigh in Pennyweight and pay based on the Gram price, you get less!!
If you use Pennyweight and have 20 Pennyweight worth of gold (remember the 'number' 20 is clearly less than then 'number' 31.103 and BOTH equal a Troy Ounce) and pay $32.15 (the Gram price, and here again the 'number' $32.15 is obviously smaller than the 'number' $50, one is the price per gram, one is the price per pennyweight) then multiplying both of those 'smaller' numbers (smaller weight number - Pennyweight - and smaller per unit price number - Gram) you would be paid $643.00, or $357 LESS!!!! (20 multiplied by $32.15 = $643!) That in a nutshell is how easy it is to be bamboozled!