The Tanishq Gold Rip-Off

Reader @moneybloke (Sunil) writes in (on the Physical Gold Con Job video):

Surprise surprise, just called Tanishq and asked to buy a 50 gm gold coin. here is the lowdown

MCX price of 995 22400 per 10 gms
Tanishq price of 999 2750 per gm
making charges 4.5%

I am guessing that there may be VAT on this as well ( 2%).

Since I needed to buy physical Gold, asked my sister in law to buy it in Dubai. She paid 23400 per 10 gm for coin ( there was making charges though nominal )

Wonder what makes a brand like Tanishq so arrogant to charge this kind of prices. Is it the so called Reliability factor in a largely unregulated industry.

On Monday will do research on Banks ripping customers off in Gold. Should make for interesting reading

Cheers

Sunil

Indeed, this is such a rip-off. The cost of buying gold in Dubai was more than 20% cheaper! I'm assuming it was a 999 gold coin. Tanishq effectively charges about 2,900 rupees per gram, wherewas you get it for about 2400 per gram in Dubai.

Considering how cheap air tickets are, a buyer of say 10 lakhs worth of gold- which is less than half a kg and will fit into your pocket - might as well fly to Dubai, buy the gold and come back. Flights from Delhi seem to cost around Rs. 19,000, so you should be able to do the whole thing in 30K - which is just 3%!

Brands like Tanishq and indeed most banks rip you off on physical gold - don't bother.

Comments

I have bought gold coin (22

I have bought gold coin (22 Carat 8 gram) from jeweller at previous day spot price, with just VAT added. He also took it back for spot price three months later and adjusted the amount for some purchases I made with him. The constraints are as follows.

* They will take only cash
* They wont take back coin for cash. You have to buy jewellery from them (Even banks do not buy back coins)

The only problem is that you have to trust the local jeweller.

Two years back, when I was

Two years back, when I was not aware of this, I got an offer from HDFC bank that I get 5% Discount for being HDFC Account Holder and additional 10% Cashback if I buy through HDFC Credit Card. So, it is 15% discount overall. I thought it is a pretty good deal. At the last moment, when I checked the price in a near by gold shop, I was shocked to know that that the price was way higher by 10%.

Many banks sells at a premium of 10-20% of the market price, just for the sake of the purity gaurantee certificate.

More over, they try to attract the customers by giving discount and interest free EMIs. You increase by 20% and give 5% discount!!!

It doesn't make any sense to buy from them, but I could still see many buy for God's sake.

always try buying from a

always try buying from a manufacturer there you will get your jewellery in manufacturing cost which is 40% less than showroom cost.

Thanks for this - yes, this

Thanks for this - yes, this does suck big time. but sadly, they don't buy it back!

The diff in price is due to

The diff in price is due to purity of gold and making charges 999.99 which banks or Tanishq are normally selling - others are selling 999.95 or less and hence, the diff in rates but ofcourse, Dubai is any day cheaper:)

yes..Banks and Tanishq

yes..Banks and Tanishq charges very high upto 6% making charges for 10gms gold coin of 9999 purity which is quite high along with 1% VAT. finally you would see 3000 to 3500 Rs more when compared to market price.

I work in Kuwait and here

I work in Kuwait and here prices of 22carat & 24carat gold is displayed separately in any shop. But in India, jewellers are charging price of 24 carat and selling 22carat gold jewellery (its not possible to make jewellery with 24carat gold). Over & above, making charges are also heavy in India.
My few cents...

Banks are a bigger rip

Banks are a bigger rip off
http://www.moneylife.in/article/buying-gold-and-silver-from-banks-think-...

Tanishq!? Do you mean there

Tanishq!? Do you mean there is no value for the art and the skill that goes into designing a jewel?

That is why they charge

That is why they charge additional making charges nearly 1% of the gold price. in addition the price for gold quoted itself is higher.

There isn't much skill

There isn't much skill involved in designing a gold bar or coin, no?

Also I checked HDFC - they

Also I checked HDFC - they are charging 2676 per gm (this i suppose includes making charges). See: http://www.hdfcbank.com/common/gold_rates.htm The current market price is around 2350 per gm.

What is the comparative price

What is the comparative price at icicibank or similar places to buy gold in physical form. Aren't there any other better options to buy gold in physical form in india?

I think you can find out from

I think you can find out from a bank - I don't have the current price. It tends to be 15-20% higher than the market price.