Scrap Metal And The Law

By Adam Ioannidis

On May 30th, 2018, the Victorian Government passed a new law that affected scrap metal businesses and metal recycling in Melbourne. This law was passed in an effort to crack down on criminal activity. Essentially the law stated that all scrap metal transactions conducted in Victoria would have to be via either Cheque or EFTPOS/electronic transfer. Cash is no longer a legal payment option in the Melbourne scrap metal recycling industry. In today’s blog, we’re going to take a look at this new law more closely and what some of the finer details of it are.

Second-hand dealers

The latest scrap metal law required every metal recycling business in Melbourne to be registered as an official second-hand dealer. For example, another common profession where you would be required by law to register as a second-hand dealer would be a pawnbroker.

Anyone who deals with goods that have been previously used or worn must register for a second-hand dealer’s license. From the 1st of September 2018, any business that purchased or sold scrap metal for recycling or repurposing would have to register for such a license.

What is defined as scrap metal?

Under the law, scrap metal is defined as any item that contains “2% or less by weight of gold or silver” as well as “80% or less by weight of copper”. If the item falls outside of these parameters, then they’re considered second-hand goods instead of scrap metal.

If this is the case, then the buyer must comply with second-hand goods requirements. However, if an item does fall out of the parameters and is no longer considered scrap metal – then, the seller can be paid in cash.

Why was this law introduced?

As we’ve mentioned, this law was designed to crack down on criminal activities. One of the bigger points of this law is that the lack of cash transactions forces (and legally requires) scrap metal buyers to keep a detailed and complete log of payments. This is because a lot of people – especially thieves – try to sell cars or other items that they’ve stolen.

If they were getting paid in cash, then there’d be no trace or proof of the transaction. With the new law, it’s a lot harder for criminals to do such things as there’ll be a trace – making it easier for them to be discovered. If a vehicle is brought in and its identifier has been removed or destroyed in some way, then it must not be bought or possessed by a scrap metal buyer.

Keeping records

Keeping detailed and accurate records of all transactions is an absolute must under the recent law. The following points must be adhered to and recorded each time there is a transaction:

  • An accurate description that includes weight or quantity;
  • Whether or not it’s a vehicle and any identifier;
  • Name and address of the seller as well as their ID information;
  • Exact date and time the goods were received;
  • A copy of the transaction (whether it be the cheque or electronic receipt); and
  • The name of anyone acting on behalf (if at all) of the scrap metal dealer.


There are a handful of exceptions from the law, such as the item falling out of the 2% and 80% parameters we mentioned. Some of the other exceptions include vehicles that are bought for the purpose of dismantling and selling parts individually. If this is the case, then cash can be used to pay for these goods. However, if a motor vehicle is purchased for the purpose of recycling and repurposing the metal, then the law applies, and cash cannot be used as a payment method.

Are you looking for metal recycling facilities in Melbourne?

Metal Men Recycling believe that the recent laws have made a positive impact on the metal recycling industry in Melbourne and continue to welcome and abide by them. If you’re looking to sell your scrap metal for a profit, then you’ve come to the right place. Based in Pakenham, we’re able to buy a wide variety of scrap metal and safely recycle it.

Not only is this a great way to make a profit, but you’re also actively helping the environment by contributing to the recycled metal industry. We offer bins in several sizes and can deliver them to you for large drop-offs. We also feature weighbridges at our facility and offer 24-hour pickup services.

If you’d like to know more about our services, then please give us a call on 03 5941 6677. You can also contact us by filling out the enquiry form found on our website.

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Find us at: 18 Drovers Place, Pakenham VIC 3810