Plain-English guide

Buying gold from the public: the $50,000 rule

Updated October 2026 · Based on 31 CFR 1027.100 and 1027.210

For most retail jewelers, the AML question comes down to one number: how much did you buy from the public last year? Scrap gold, estate pieces, coins and loose stones bought over the counter can add up fast. Once they pass $50,000 in a year, a retail store can become a covered dealer under FinCEN's rule. This guide explains how that test works, what counts, and how to keep an eye on the number.

1. The retailer path

A retailer is a business that sells covered goods mainly to the public (31 CFR 1027.100(f)). Most jewelry stores fit that description.

A retailer isn't a dealer just because it sells a lot of jewelry. A retailer is a dealer only if, during the prior calendar or tax year, it bought more than $50,000 of covered goods from persons other than dealers or other retailers (31 CFR 1027.100(b)(2)(i)). In plain terms, that means buying from members of the public or from foreign sources of supply.

Businesses that don't sell mainly to the public, such as wholesalers, use a different test. See Do jewelers need an AML program? for the full decision path.

2. What counts toward $50,000

Count purchases of covered goods from people who aren't dealers or retailers. Covered goods are jewels, precious metals, precious stones, and finished goods that get 50% or more of their value from those materials (31 CFR 1027.100(a)). Typical examples at a jewelry counter:

• scrap and broken gold, silver or platinum jewelry bought from walk-in sellers;
• estate jewelry bought from families or private collections;
• bullion coins and bars bought from individuals;
• loose diamonds and colored stones bought from the public; and
• goods bought directly from foreign sources of supply.

Only the metal and stone value counts. For finished goods, only the value of the jewels, precious metals or precious stones counts toward the $50,000 threshold (31 CFR 1027.100(b)(5)). A vintage brooch may carry design or collector value, but only its gold and stones go into your total.

The rule doesn't spell out a valuation method. A simple approach is to record what you paid and, for finished pieces, the share of value that comes from metal and stones. When you're unsure, count the higher figure and ask counsel (recommended practice).

3. What doesn't count

• Trade-ins with no funds paid out. Accepting covered goods and crediting their value to the customer's account or another purchase, without providing funds, isn't a purchase for the dealer definition (31 CFR 1027.100(b)(3)). A customer who trades in an old band toward a new ring doesn't add to your total. If you pay out any cash or check, record that part separately.
• Purchases from dealers and retailers. Inventory bought from your wholesaler, a manufacturer or another jewelry store isn't part of the retailer test (31 CFR 1027.100(b)(2)(i)).
• Pawn transactions. Licensed or authorized pawnbrokers are excluded only for their pawn transactions, including selling pawn loan collateral (31 CFR 1027.100(b)(2)(ii)). Outright gold buying at a pawn shop still counts.
• Non-covered goods. Items that get less than 50% of their value from jewels, metals or stones aren't covered goods (31 CFR 1027.100(a)).

Paying a seller cash doesn't trigger Form 8300, which covers cash you receive (31 CFR 1010.330(a)(1)(i)). Big cash sales are a separate topic. See our Form 8300 guide.

4. Track it monthly

The rule looks at last year's total, but you can only control it by watching this year's. A short monthly habit works well (recommended practice):

1. At month end, add up purchases of covered goods from the public and other non-dealers.
2. For finished goods, use the metal and stone value.
3. Leave out pure trade-in credits and pawn transactions.
4. Add the month to a running total for the calendar or tax year you use.
5. Have the owner or compliance lead sign off on the figure.

Here's an example running total. The figures are made up.

Example only. A running total like this is a screening aid, not a legal determination.

A tracker doesn't need customer names. A reference code from your buy ticket is enough to trace a line back to your records. Keep any seller ID records your state or local rules require in your normal buy files (recommended practice).

5. If you cross the line

Because the test looks back at the prior year, a store that passes $50,000 this year will generally meet the dealer definition for next year. A business that becomes subject to the rule must have its program in place within six months (31 CFR 1027.210(c)). Ask counsel to confirm your exact start date.

Many stores start building the program as soon as the running total gets close, so it's ready on day one (recommended practice). FinCEN guidance also says a business must re-assess each year whether it meets the dealer definition for the following year (FinCEN dealer FAQ 5(b)–(c)).

6. A program for your buy counter only

Here's the part many jewelers miss. If a retailer crosses the $50,000 line through purchases from non-dealers, its AML program need only address those purchases (31 CFR 1027.210(a)(2)). The program's focus is your buy counter, not your bridal sales floor. Form 8300 still applies to large cash sales anywhere in the store.

The program still needs the required parts: a written program approved by senior management (31 CFR 1027.210(a)(1)), controls based on a risk assessment (31 CFR 1027.210(b)(1)), a compliance officer (31 CFR 1027.210(b)(2)), ongoing training (31 CFR 1027.210(b)(3)) and independent testing (31 CFR 1027.210(b)(4)). Each part can focus on the buy counter.

Red flags the rule names that often show up at a buy counter include (31 CFR 1027.210(b)(1)(ii)(B)–(E)):

• a seller who won't give complete or accurate contact information;
• a seller who asks you not to keep normal records;
• a sale that's unusual for that seller, such as a first-time seller with a bag of identical new chains; and
• a deal that doesn't fit standard industry practice, such as a seller happy to take far less than melt value.

A red flag isn't an automatic refusal. FinCEN guidance says dealers decide on the facts, after reasonable inquiry (FinCEN preamble, 2005 interim final rule). Our risk assessment guide shows how to rate your buy counter, and our independent testing guide covers who can check your work.

More guides

• AML requirements for jewelers: the full overview
• Do jewelers need an AML program?
• Form 8300 for jewelers: cash over $10,000
• AML risk assessment for jewelry stores
• Independent testing for jewelers

Sources

• 31 CFR 1027.100: Definitions (eCFR)
• 31 CFR 1027.210: Anti-money laundering programs for dealers in precious metals, precious stones, or jewels (eCFR)
• 31 CFR 1010.330: Reports relating to currency in excess of $10,000 (eCFR)
• FinCEN: Anti-Money Laundering Programs for Dealers in Precious Metals, Stones, or Jewels, interim final rule (2005)
• Financial Crimes Enforcement Network (FinCEN)

This guide summarizes federal rules as of the date above. State law and your own facts may add requirements. It isn't legal advice, so talk to a qualified attorney about your situation.