Buying silver online is much different than buying silver locally, especially when it comes to making payment and accepting delivery. Instead of walking into a store and handing over cash in exchange for silver, you need to safely and securely remit payment to a remote third party. The industry as a whole accepts three primary methods of payment: credit/debit cards, paper checks, and bank wires.
When paying for silver in relatively small quantities, it is always easiest to pay by debit or credit card. It is fast, secure and convenient. Choose retailers that use 256-bit internet security from a leading internet security provider to ensure that your personal and financial information is safe; always the primary concern with online purchases.
Credit card fees will be passed on to you, and they could be significant to the investment. Normally 3%-4% is charged for credit card purchases. On most dealer websites you can purchase your silver with VISA, AMEX, Mastercard, or Discover. Some online silver retailers take Google Checkout or Paypal, but most reputable companies do not due to the risk of fraud.
If you are buying large quantities of silver, above $5000 for example, it may not be appropriate to purchase on your credit card. Not only will you eat $150-$200 in fees, but retailers will also be hesitant to accept such a large credit card transaction as they are open to fraud or chargeback.
Credit card orders are normally shipped within 1-3 days of purchase. The timescale will depend on previous order history and the amount of silver being ordered, as well as the seller’s current inventory.
Although customers should always check into a dealer’s reputation before buying (the bullion BBB is a good place to start), credit cards also provide additional protection as consumers can chargeback any purchases for which products are not delivered.
Another widely accepted form of online silver payment is a simple paper check. Please note that this refers to an actual physical check you have to write and mail, as eChecks require additional processing fees that online retailers are not willing to accept.
To pay by check, get the details of the payee and ensure that all reference numbers are correctly inputted, and then mail it over with any requisite forms. Naturally, the postal process and clearing processes take some time. This can delay delivery of your silver, which can lead to a bit of uncertainty in the process.
Making sure that you are dealing with a reputable seller will help to alleviate some of the angst. Retailers will hold personal checks, cashier checks, and certified checks for 5-10 days, especially if you are a first-time purchaser. Despite the fact that the money will be withdrawn from your account within a few days, bounced checks aren’t returned for 7-12 days, thus the lengthy hold.
Given that the entire process can take 2-3 weeks from ordering to actual delivery, it is important to ensure your price is “locked in” at the time of purchase. Most retailers will either take a small deposit, 3-5%, on a credit card, or simply take your card on file to bill you market losses or cancelation fees should you fail to mail payment. Given that the retailer will ship the products even if silver skyrockets, they expect you to still pay for the products even if silver dips after you order.
Most good retailers will keep you informed throughout the order’s progress – sending you emails to notify you upon receipt/deposit of the paper check, as well as shipping details once the order departs after cleared payment. In general, the paper check is a very slow method of payment, but it is convenient for purchasers who aren’t in a hurry and saves the 3-4% credit card fee.
Side note – by using online banking Bill Pay apps, you can often have your bank mail the check directly to the seller without ever getting off your computer. Although you still will have to wait a few weeks for delivery, this method is more convenient than actually writing/mailing the check yourself.
Bank wires are preferred by both buyers and sellers for large silver transactions. Wires offer several benefits, including:
- Speed – Bank wires typically reach the destination account in a matter of minutes or hours, and wires are considered “good funds” as soon as they hit the recipient’s account, so there is no lengthy clearing period and shipment can occur immediately.
- Cheap – Domestic wires typically have $10-$25 fees for the sender, which are quite minimal for $10,000+ purchases.
To purchase by wire, you will either have to make a small deposit on a credit card, or simply put your card on file to lock in your purchase price while the sender awaits the bank wire. Most retailers provide 1-2 business days to send the wire; it is important that you complete payment within that timeframe, or you risk losing your locked in price.
Many retail banks allow customers to send online or over-the-phone wire transfers, meaning you can complete the entire purchase and payment from your computer. Some banks may require you to come to the branch in-person to send the wire, which typically takes 5-10 minutes. The retailer will provide you with their company name, bank account number, routing number, and bank name/address to facilitate the transfer.
Wire transfer purchases will normally be shipped between 1-3 days from the moment the money hits the retailer account. Most retail websites, such as JMBullion and APMEX, offer a discount of 4% wire transfers compared to credit card purchases, as incoming wire fees are minimal compared to credit card fees. With large purchases this really makes a difference.