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Industry Insights: The Importance of Due Diligence in Refining Dental Gold by Dave Weinberg

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Industry Insights: The Importance of Due Diligence in Refining Dental Gold

by Dave Weinberg

With gold prices soaring to all-time highs, dentists and dental businesses are presented with a lucrative opportunity to refine their dental gold. To maximize returns, it is crucial to partner with a reputable precious metals company. Conducting thorough due diligence is essential to ensure you are working with a trustworthy refiner who offers fair prices and transparent services.
Case Study: The Dental Gold Showdown
Dr. Tom Jow of San Francisco accumulated more than 23 pounds of dental gold scrap over a period of 30 years. Seeing gold surpass $3,000 an ounce made choosing who to send his scrap to a crucial decision. Dr. Jow decided to conduct an experiment to determine which company he would choose to manage his 23-pound collection. He sent a batch of yellow dental gold with the same weight and alloy composition to four different refiners. His results were eye-catching.

Company A
A cash buyer who offered a cash payment of about 50% of the expected value, more in line with a batch that was about eight karat gold, not the 16 karat this batch was comprised of.

Company B
This company’s assay was troubling at best as the assay showed more palladium than gold—totally inconsistent with the known composition of the batch. The result was a payment slightly higher than the cash gold buyer.

Company C
This company had a very accurate assay showing an assay of very close to 16 karats. However, the final payment did not reflect the assay report. After analyzing the numbers, it was found that the company had an additional 20-25% costs that were categorized as “charges” rather than “fees.” Nonetheless, the additional “charges” reduced the final payment in a significant way.

Company D
Company D, which was Scientific Metals, was the clear winner. Scientific Metals had an assay similar to Company C, but the final payment was about 25% more. Why? Because there were no additional costs, fees or charges on top of the stated refining fees.
Comparing business models of refiners
The problem: No matter how well-intentioned a company is, it will not and cannot be competitive if its business model and structure aren’t efficient. Some firms will have more overhead and expenses than others and therefore may be incentivized to charge more fees in one way or another.

How does one go about determining how efficient a refiner is? Some issues to consider:
  • How many sales reps are involved in—and being compensated for—a transaction?
  • What percentage of a scrap return goes to sales commissions?
  • Recently, some dental supply companies have partnered with gold refining companies to offer scrap refining services. While this provides an element of convenience, clinicians must consider the implications of having an extra sales rep involved in their scrap return.
Scientific Metals’ solution: Every day we focus on keeping our costs down, so dentists can keep more of what is theirs. While other refiners can have dozens of sales reps around the country who must be compensated, Scientific Metals does not have a single sales rep, nor do we have any partnerships with dental supply distributors whose reps may also be getting a piece of your scrap return.

It’s only logical that with less people getting a cut of your scrap return, you get to keep more. It’s really that simple. Of course, we invest in the latest technologies for melting and assaying, but other expenses are cut to the bone so we can be the leanest and most efficient refiner in the industry.


Fees and hidden fees
The problem: Relying solely on what refining fee a company promotes on its settlement sheet may be the biggest mistake a dentist can make.

What matters most is what you get back after accounting for all fees—and the focus should always be on the net bottom-line return, not on subtle differences in yields and rate fees a company promises. Like an iceberg, with some refiners there may be more unseen than seen. The promoted “refining fee” may just be the tip of the iceberg—looming under the water there may be other larger fees and charges that can wreak havoc on your scrap return.

In a perfect world, where transparency and honesty are not issues, one can afford to choose a refiner based solely on the promoted refining fees, but we don’t live in that world. Trust can only develop with consistent experience over time.

Scientific Metals’ solution: Hidden or extra fees and charges can be crushing to a practice’s scrap return. In fact, extra fees on top of the refining fee can amount to an additional 30 percent deduction. That’s why Scientific Metals has none. There are no extra fees, charges or deductions. The policies and terms are open and straightforward, with no tricky math and no skepticism.


Final thoughts
With gold prices at high levels, it’s time for dental practices to shift away from viewing their scrap money as a small afterthought and start approaching it with the same due diligence one would undertake with any other financial consideration.
This content is sponsored by Scientific Metals.
If you have questions about the refining process or want to discover how much more you could earn from your dental scrap, call 888-949-0008 or visit scientificmetals.com.
Author Bio
Dave Weinberg Dave Weinberg, owner of Scientific Metals, was born in Canada and raised in Houston, Texas. A graduate of McGill University with an MBA from the University of Arizona, he helped grow the company—founded by his father, Mark Weinberg—from a regional dental refiner into a nationally respected name in dental refining.
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