Gold prices are sticking to $2,300 an ounce levels, and with analysts suggesting it could still make a breakthrough push towards $2,500. UAE jewellery retailers are now reworking payment options for their shoppers. Image Credit: Virendra Saklani/Gulf News

Dubai: Planning to buy gold? But find yourself short of cash to buy right now?

Then, do so in instalments. That too on a zero per cent basis.

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Some of the biggest gold and jewellery groups in the UAE are launching advance payment plans – in the form of monthly instalments leading to the actual purchase of the gold at the end of 12 months. Malabar Gold & Diamonds has just done so, and others also have similar plans to help shoppers out at a time when gold prices are consistently showing up at $2,300 an ounce plus levels.

Some of these advance payment plans could also offer six-month instalment options.

This is an advance payment scheme that we have launched in the UAE and allows these shoppers to plan and pay for their next purchase.

- Shamlal Ahmed of Malabar

This is specifically targeted at mid to lower income UAE resident shoppers and allows them to pay through instalments from Dh200 a month to over. All that the shopper needs to do is select the particular piece of jewellery they want to buy, make a down payment, and pay off the rest in 12 instalments.

“Such shoppers usually buy a certain amount of gold each year, but were finding it difficult to do so because gold prices had shot up significantly in the last 4-6 months,” said Shamlal Ahmed, Managing Director – International Operations at Malabar. “This is an advance payment scheme that we have launched in the UAE and allows these shoppers to plan and pay for their next purchase. Through easy-on-the-pocket instalments in advance. This way they don’t have to worry about a lump sum payment or high interest if they are paying by credit cards.”

Check the latest gold rates in the UAE

Pay in advance

Pay in advance – that’s the key element of this option. And represents a contrast to the ‘Buy Now Pay Later’ schemes that are hugely popular in the UAE. In the BNPL program, the shopper makes a purchase and then splits up the payments over 4-6 monthly transactions. At zero interest.

“But there is little or no BNPL support offered to gold and jewellery purchases in the UAE, which is why retailers had to find other ways to help budget-conscious shoppers,” said a jeweller. “The easy instalment scheme is thus the best option under the current scenario where gold prices are this elevated.” (BNPL offers are a rarity in gold jewellery retail because of the way profit margins are structured by jewellers.)

Any jewellery retailer launching these advance payment offers needs to get clearance from the local authorities. “This is actually based on a scheme that’s running successfully in India,” said Ahmed.

“From a shopper perspective, the 12-month payment plan allows them the flexibility of when they want to take delivery of the jewellery. We believe many expat residents who sign up will do so just before their next trip back to their home country.”