California doesn’t issue a license called a “precious metals dealer license.” If you search for one, you won’t find an application — because the state regulates this activity through two other licenses instead: the Secondhand Dealer license and the Pawnbroker license, both administered locally by your city police department or county sheriff, not by a state licensing board.
Which one you need — or whether you need either — depends entirely on what you’re actually buying and selling.
First, figure out which category you’re in
California’s rules split precious metals businesses into three buckets, and the line between them matters a lot:
Coin and bullion dealers. If your principal business is buying, selling, or trading coins, monetized bullion, or commercial-grade ingots of gold, silver, or other precious metals, state law defines you as a “coin dealer” — and coin dealers are specifically carved out of the secondhand dealer definition. “Commercial-grade ingots” means bars that are 0.99 fine or finer, or 0.925 fine sterling silver art bars and medallions, stamped by the refiner with their assay fineness. If that’s your inventory, you generally don’t need a secondhand dealer license at all.
Secondhand dealers. If you’re buying used jewelry, chains, flatware, or other secondhand items that happen to be made of precious metal — the kind of inventory a typical “cash for gold” storefront handles — you fall under the secondhand dealer statute (Business and Professions Code §21625–21647) and need a Secondhand Dealer license from your local police or sheriff’s department.
Pawnbrokers. If you’re lending money against precious metal items as collateral rather than buying them outright, you need a Pawnbroker license (Financial Code §21000 and following), which layers extra financial requirements on top of the secondhand dealer rules.
How to get a Secondhand Dealer license
The license is state-defined but locally administered — every city or county has to build the state’s licensing requirements into its own local process, so the exact intake steps vary, but the core path is the same everywhere:
- Apply with your local licensing agency — the chief of police or the sheriff’s department, depending on where your business sits. There’s no single statewide application portal; each agency runs its own intake.
- Get fingerprinted through Live Scan. Every owner, partner, or corporate officer with a stake in the business has to be fingerprinted. The Live Scan fee is roughly $32 plus a rolling fee charged at the fingerprinting site.
- Pay the DOJ processing fee. New applications carry a $300 processing fee, which the local agency collects and forwards to the California Department of Justice.
- Wait on the DOJ background check. The Department of Justice reviews the fingerprint results and the application, then sends the local agency a comment letter on the applicant’s eligibility, typically within 30 days.
- Get your license issued locally. Once DOJ clears the background check and assigns a license number, your local police department or sheriff issues the actual license.
- Register for CAPSS. The California Pawn & Secondhand Dealer System is the state’s electronic reporting system, and you’re required to report acquired property to it no later than the next business day after you take it in. You’ll need a computer, an electronic signature pad, and a fingerprint scanner with capture software to use it.
- Hold new inventory for 7 days before reselling it, and keep it available for law enforcement to inspect on request.
- Renew every two years. The license isn’t permanent — miss the renewal deadline and it gets revoked, not just lapsed.
None of this applies to genuine new merchandise bought from a manufacturer, distributor, or wholesaler — that’s excluded from the “tangible personal property” definition the reporting rules are built around, as long as you keep the purchase records for a year.
The extra layer for pawnbrokers
If you’re lending against precious metals rather than just buying them, add these on top of the secondhand dealer requirements:
- A $20,000 non-revocable surety bond, renewed every two years, to protect pledgors if their property becomes unavailable for redemption due to the pawnbroker’s misconduct.
- Proof of $100,000 in liquid assets, verified by a California CPA under penalty of perjury — or, if you don’t have that on hand, a $100,000 surety bond instead.
- A non-transferable license. Selling the business or changing ownership structure means reapplying, not reassigning the existing license.
What a local application actually looks like
The paperwork is uniform statewide (it flows through the same DOJ form regardless of city), but the front door differs by jurisdiction. In Los Angeles, secondhand dealer and pawnbroker permits route through the Police Commission’s Permit Processing & Records Section, and anyone owning 10% or more of a corporation running the business has to be named and fingerprinted individually, not just the person signing the application. Smaller cities — Dublin, for example — run the same process through their police services department and bundle it with a standard city business license requirement. Either way, you’re filing with a local law enforcement agency, not a state consumer-protection office, which is the detail that trips people up if they’re used to Texas or Ohio’s model of a single state license.
Common mistakes
- Assuming a “precious metals dealer license” exists to apply for. It doesn’t — you’ll waste time looking for a form that isn’t there instead of identifying whether you need a secondhand dealer or pawnbroker license.
- Missing the coin-dealer exemption. Some bullion and coin dealers over-comply, registering as secondhand dealers when their actual inventory puts them outside that definition entirely.
- Forgetting the 2-year renewal cycle. Unlike a one-time business license, this one expires on a clock, and a lapsed license doesn’t quietly renew — it’s revoked.
- Skipping CAPSS registration. The license and the reporting system are separate signups; getting licensed doesn’t automatically enroll you in CAPSS.
For the full text of the requirements and current contact information, the California Department of Justice’s Secondhand Dealer and Pawnbroker Unit page is the authoritative source: oag.ca.gov/secondhand.