Making charges are the single biggest "hidden cost" when buying gold jewelry. They can range from 8% to 25% of the gold value, and understanding how they work can save you thousands of rupees.
What Are Making Charges?
Making charges are fees charged by the jeweller for crafting the jewelry. This includes:
- Labor cost for artisans and goldsmiths
- Design complexity (simple vs intricate)
- Wastage during manufacturing (gold lost in polishing, filing, soldering)
- Overhead costs (rent, electricity, tools)
- Profit margin for the jeweller
Making charges are separate from the gold price. You pay for the gold (based on weight × daily rate) PLUS making charges.
How Making Charges Are Calculated
There are 3 common methods:
1. Percentage of Gold Value (Most Common)
Making charges are a percentage of the gold's base cost.
Base gold cost = 10g × ₹7,012 = ₹70,120
Making charges @ 15% = ₹10,518
Total (before GST) = ₹80,638
Typical ranges:
- 8-12%: Simple designs (plain chains, basic rings, bangles)
- 12-18%: Medium complexity (light patterns, everyday jewelry)
- 18-25%: Intricate designs (temple jewelry, bridal sets, heavy detailing)
2. Per Gram Charge
Some jewellers charge a fixed amount per gram (e.g., ₹500/g or ₹800/g).
Making charges = 10g × ₹600 = ₹6,000
This method is more transparent but less common in India.
3. Flat Fee
A fixed charge for the entire piece, regardless of weight. Common for very simple items like plain gold coins or basic pendants.
Why Making Charges Vary So Much
1. Design Complexity
Simple jewelry: Machine-made chains, plain bangles with minimal work = 8-10% making charges
Complex jewelry: Hand-crafted bridal necklaces, temple jewelry, filigree work = 20-25%
2. Brand & Store Type
- National chains (Tanishq, Malabar, Joyalukkas): 12-18% (standardized, transparent)
- Local jewellers: 10-20% (negotiable, varies widely)
- Designer boutiques: 18-30% (premium for exclusive designs)
3. Wastage Factor
Gold is lost during the manufacturing process (melting, polishing, filing). Jewellers add this wastage (typically 5-10%) into making charges.
4. Machine-Made vs Handmade
- Machine-made: Lower making charges (8-12%)
- Handmade: Higher charges due to skilled labor (15-25%)
The Problem with High Making Charges
You don't get making charges back when selling.
When you sell gold jewelry, jewellers only pay you for the gold weight at the current rate. They deduct:
- Melting charges (₹50-100/g)
- Testing charges (if applicable)
- Their profit margin
You lose 100% of the making charges you paid originally. This is why gold jewelry is a poor investment.
5 years later, gold price has increased to ₹8,500/g.
Resale value = 10g × ₹8,500 - ₹500 (melting) = ₹84,500
Net gain: ₹3,862
If you'd bought 24K gold coins instead (no making charges), you'd have made ₹14,380 profit.
How to Negotiate Making Charges
1. Shop During Sales & Festivals
Jewellers often waive or reduce making charges during Akshaya Tritiya, Dhanteras, Diwali, and wedding season sales.
2. Buy Simpler Designs
The more intricate the design, the higher the charges. Plain gold chains, bangles, and simple earrings have the lowest making charges (8-10%).
3. Negotiate Directly
Making charges are negotiable, especially at local jewellers. Ask for a discount if you're buying multiple items or are a repeat customer.
Typical negotiation: Start by asking for 2-3% reduction. Experienced buyers can often get 4-5% off.
4. Compare Across Stores
Don't settle for the first quote. Visit 3-4 jewellers and compare their making charges for similar designs.
5. Buy Machine-Made Jewelry
Machine-made chains and bangles have lower making charges than handcrafted pieces.
6. Exchange Old Gold
If you're exchanging old jewelry, negotiate for lower making charges on the new purchase. Some jewellers waive making charges entirely during exchange offers.
GST on Making Charges
Making charges attract 5% GST (not 3% like gold).
Base gold cost: ₹70,120
GST @ 3% on gold: ₹2,104
Making charges @ 15%: ₹10,518
GST @ 5% on making: ₹526
Total: ₹83,268
This is why the "final" price is always higher than you expect.
Red Flags to Watch For
1. Hidden Wastage Charges
Some jewellers add "wastage" as a separate line item on top of making charges. This is double-dipping — wastage should be included in making charges.
2. Unclear Pricing
If the jeweller can't clearly explain how making charges are calculated, walk away. Transparency is key.
3. Excessive Charges on Simple Jewelry
If you're being charged 18-20% for a simple gold chain, you're overpaying. Simple designs should be 8-12%.
Should You Avoid Jewelry with High Making Charges?
It depends on your purpose:
If buying for investment: Avoid jewelry entirely. Buy 24K gold coins or bars with minimal premiums (1-2% over spot price).
If buying for wearing/gifting: Accept that making charges are unavoidable. Focus on getting beautiful designs you'll actually wear, and negotiate for the lowest charges possible.
If buying for weddings: High making charges (18-25%) are expected for bridal jewelry. It's a one-time purchase meant to last a lifetime, not an investment.
Final Tips
- ✅ Always ask for a detailed invoice showing gold weight, rate, making charges, and GST separately
- ✅ Verify the BIS hallmark to ensure you're getting the purity you paid for
- ✅ Don't buy jewelry thinking it's an investment — making charges kill your returns
- ✅ Negotiate during festivals and sales for better rates
- ✅ Compare making charges across 3-4 stores before buying
- ✅ Simpler designs = lower making charges = better resale value
Making charges are an unavoidable part of buying gold jewelry. By understanding how they work and negotiating smartly, you can save significantly and make more informed decisions.