Second-Hand Goods Act Compliance: A Practical Guide for Scrap Dealers and Recyclers

The Second-Hand Goods Act, 2009 (Act No. 6 of 2009) is the law every South African scrap metal dealer, recycler and second-hand dealer trades under. It decides who must register, what you must record about every seller, how long you must hold goods before you move them, and what a SAPS official may demand when they walk into your yard. This guide walks through the obligations section by section, in plain language, and ends with a practical checklist you can use before your next inspection.

1. Who the Second-Hand Goods Act applies to

The Act regulates anyone who carries on business as a dealer in second-hand goods. That includes general second-hand dealers, pawnbrokers, auctioneers, jewellers, second-hand motor vehicle dealers and — the group this guide focuses on — scrap metal dealers and recyclers.

The Act gives special attention to controlled metals. Schedule 2 lists them: copper, aluminium, zinc, chrome, lead, white metal, nickel, tungsten, tin, ferrovanadium, ferrosilicon, ferrochrome, brass, bronze, cobalt and precious metals as defined in the Precious Metals Act, or any article consisting wholly or principally of any of those metals. If you buy, process or sell these, you carry the heaviest set of obligations under the Act — because these are the metals that cable and infrastructure theft targets.

2. Registering as a dealer — and as a recycler

Section 2 is simple: every person who carries on business as a dealer must be registered. If the business is a company, close corporation or trust, a natural person who is not disqualified under the Act must be appointed to manage and be responsible for the business — and that person carries the same obligations and liabilities as the registered dealer.

Section 25 adds a second layer for anyone who recycles controlled metal: every dealer engaged in the business of recycling any controlled metal must also apply to be registered as a recycler, in addition to the dealer registration. The application goes to the National Commissioner of SAPS. The Act also makes it an offence to possess apparatus that can be used to recycle controlled metal unless you are a registered recycler (or, for precious metals, authorised under the relevant precious-metals legislation).

A few practical points that trip yards up:

• Every premises counts. Registration is tied to the premises on your certificate. Section 23 prohibits storing goods anywhere other than the premises for which a certificate was issued, so a second yard or an overflow lot needs to be covered.
• Conditions travel with the certificate. The National Commissioner can attach conditions — the classes of goods you may deal in, your business hours, and, for recyclers, a condition that goods you acquire from or dispose of to other dealers may only move between registered dealers or recyclers. Trading outside those conditions is itself an offence.
• Renewal matters. Carrying on business after failing to renew registration is an offence under section 32.

3. The transaction register: what you must record

The heart of compliance is section 21. A dealer must keep a register in the prescribed form and record the prescribed particulars of every acquisition or disposal of second-hand goods. At minimum, that means:

• The person you dealt with: full names, contact address, contact telephone number, identity number, and the manner in which their identity was verified.
• The goods: a description, plus any serial number or distinguishing mark.
• The money: the purchase price.
• Your reference: the number you assigned to the goods.
• Who did the deal: the name and signature of the person who conducted the transaction for you.
• When: the date and time of the transaction, and the date the goods were sold.

Three further rules turn this from a form into a discipline:

1. Original ID, and a copy. The seller must give you their full name, physical address and original identity document. You must obtain and keep a copy of the ID document or passport (section 21(4) and (5)).
2. Five years. The register and the ID copies must be kept for at least five years from the date of the transaction (section 21(6)).
3. Contemporaneous entries. Every entry must be made at the time of the acquisition or disposal — not at the end of the day, and not reconstructed later from weighbridge slips (section 21(7)).

The Regulations prescribe the format in Annexure B, with a separate register per type of dealer. Scrap metal dealers use Annexure B5-1 (register of acquisition) and B5-2 (register of disposal); vehicle dealers use B4-1 and B4-2; general dealers B1-1; auctioneers B2; jewellers B3. Regulation 9 requires you to keep the register that matches the principal business activity on your certificate — and if your certificate requires separate registers for different classes of goods, you must keep them separately.

Vehicle dismantlers and stripping yards have extra fields under section 24: VIN, chassis and engine number, odometer reading, exterior and trim colour, and any distinguishing marks such as microdots — plus proof of registration or deregistration of the vehicle, kept for five years.

4. The seven-day rule and other restrictions on dealers

Section 23 is where day-to-day yard operations meet the law. No dealer may:

• acquire goods from anyone under the age of 18;
• store goods anywhere other than the certified premises;
• take goods into possession unless convinced on reasonable grounds that the seller owns them or is authorised to dispose of them;
• deliver goods to anyone, or change their form or alter their appearance, until seven days have passed from the date of acquisition.

During that seven-day period the goods must be kept separate from other goods of the same or similar kind. For a scrap yard this is the rule that collides with throughput: you cannot bale, shred, cut or load out material you bought this morning, and you cannot drop it straight onto the main copper pile where it loses its identity.

In practice that means you need to know, for every lot on the floor, when it was bought and where it is sitting — and you need something that stops a forklift driver or a dispatch clerk from releasing it early. Paper registers can tell you the first; they cannot do the second.

5. Suspicious goods, false information and burnt cable

Section 22 requires a dealer who suspects — or on reasonable grounds should suspect — that a seller’s name, address or document is false, that goods are stolen, or that an item has been tampered with to hide its identity, to immediately report it to a police official at the station in whose area you trade. The police must take down the report and give you an acknowledgement of receipt. Crucially, you may not continue with the transaction the suspicion relates to.

For recyclers, section 25 adds specific rules on cable made of controlled metal whose cover has been burnt: you may not acquire or dispose of it unless the seller gives a reasonable explanation for the burnt cover and the matter has been reported to the police. Recyclers must also report scrap that appears to have been tampered with to conceal its identity.

The lesson for your process: keep a log of every report you make and the acknowledgement you received, linked to the transaction you stopped. When an inspector asks how you handle suspicious sellers, the answer should be a record, not a recollection.

6. SAPS inspections — and what an electronic register must do

Under section 28, a police official may enter registered premises during business hours and require you, your staff or the person in control to:

• produce your certificate of registration;
• produce any register, record, book or document relating to the goods on the premises (and allow copies or extracts to be taken);
• produce any goods for examination; and
• explain any entry — or any missing entry — in a register.

If the official finds that your method of dealing, recording or storage contravenes the Act, they can demand that it stops immediately and give you no more than seven days to fix it. The Act also requires at least one comprehensive annual inspection of each registered premises, during which the section 21 records are examined. After inspecting a register the official signs after the last entry (with number, rank and date) or certifies the inspection in the manner the National Commissioner directs.

Good news for anyone moving off paper: electronic registers are expressly allowed. Regulation 8 sets two conditions:

1. an inspecting police official must be able to inspect the register through access to the software it is kept in; and
2. during an inspection you must hand over the most recent inspection certificate and an electronic copy or extract of the register covering all transactions since that certificate, on a disk or similar storage device.

So “we have a spreadsheet” is not enough. You need a register an official can actually view, filter by date, and export from in a format that mirrors Annexure B — on the spot, even if your internet is down that day.

7. Penalties: why this is not paperwork you can skip

Section 32 makes a long list of failures an offence, and Schedule 3 sets the maximum prison terms. They are severe:

A court can impose a fine, imprisonment or both, add further penalties for each day a contravention continues, suspend or cancel your registration, and order the goods involved forfeited to the State. For most yards, losing the registration is the real business risk — it is the end of trading.

8. What is changing: the proposed cashless rule for controlled metals

In October 2026 the Civilian Secretariat for Police Service published proposed amendments to the Second-Hand Goods Act for public comment, after Cabinet approved the draft for comment in August 2026. Comments close on 2 November 2026. The most significant proposal for recyclers is that, when acquiring controlled metal, a recycler must pay the seller by electronic payment — ending cash buying of copper, aluminium and the other Schedule 2 metals. The draft also tightens rules around seller records, precious metals and who may hold a trading licence.

As at the date of this article, this is a proposal, not law: the wording could still change before it is tabled and passed. But the direction is clear, and yards that already pay by EFT with proof of payment linked to each register entry will have nothing to change. We cover the practical side — and how it interacts with VAT264 — in Cashless scrap metal payments and VAT264: what recyclers need to know.

9. Inspection-readiness checklist

Run this list monthly, not the night before an inspection:

1. Dealer certificate (and recycler certificate, if you process controlled metal) current, displayed, and covering every premises where you store goods.
2. Responsible person appointed and named (for companies, CCs and trusts).
3. The correct Annexure B register in use — B5-1 / B5-2 for scrap metal; B4 plus section 24 fields for vehicles.
4. Every acquisition has seller full name, address, phone, ID number, how ID was verified, and a copy of the ID on file.
5. Every entry made at the time of the transaction, with the name and signature of the staff member who did the deal.
6. Goods bought in the last seven days physically separated and flagged — nothing delivered, cut, baled or melted early.
7. No acquisitions from anyone under 18 — ID check enforced at the counter.
8. Suspicious-transaction reports logged with police acknowledgements, linked to the stopped transaction.
9. Burnt-cable acquisitions only with an explanation and a police report on file.
10. Records and ID copies retrievable for five years.
11. If your register is electronic: an official can view it in the software and you can export everything since the last inspection certificate to a storage device, offline.
12. Personal information (ID copies, phone numbers, addresses) secured and access-controlled, because the same records are personal information under POPIA.

How SynchPlus ONE helps

SynchPlus ONE for scrap yards was built around this Act. It puts the SHGA register on every scrap acquisition, so the register is written as the transaction happens, not after it:

• Seller ID captured once and reused, with OCR scanning of ID documents and personal information encrypted at rest (AES) for POPIA, with access controlled by role and logged.
• The section 23 holding period enforced in the system (configurable), with an audited supervisor override for any early release — so material can’t quietly leave before day seven.
• One-click SAPS Annexure B export (B1–B5) for any date range, with every export audit-logged — exactly what Regulation 8 asks you to hand over.
• Suspicious-transaction and inspection logs kept against the transaction they relate to.
• Weighbridge, grading and cashless (EFT) settlement on the same record, so the register, the tonnage and the payment tie up.
• Runs fully on-premise on your own server, so the register works — and can be inspected — when the internet doesn’t.

If you also process e-waste, non-ferrous or mixed materials, see recycling software; if you strip end-of-life vehicles, see vehicle dismantling software, which ties every part and scrap lot back to the source VIN. Built in South Africa, SynchPlus ONE runs in any country — on your servers or our cloud — with the SHGA layer switched on for South African yards. Plans start from R69 per asset per month; see pricing.

Frequently asked questions