Some folks don't worry about this and just handwave it; if you can get it back to town, you can sell it right away and use your loot for carousing/improving your armory/building your castle, whatever. For me that causes two huge problems. The first is a conceptual one: How did they suddenly flood the market with objet d'art? Who bought the stuff? With the amount of coin we're talking, doesn't it seem like pretty much all the money in circulation would be needed to pay for all that stuff, too? I won't even get into the old "OMG BOOMTOWN INFLATION!" arguments we used to see alongside these concerns. But, you get the point: Who bought all this stuff and how did they do it? That's a conceptual problem for me, especially if I'm supposed to provide my players with a sense of relative verisimilitude.
My second problem with this kind of logic is that of time. I take issue with the possibility that an adventurer could be first level at breakfast and 3rd level by dinner. Oh sure, there are admonitions against allowing players to gain more than one level in a single session (or adventure or whatever), but for me the real issue is the compression of time; I'm constantly trying to draw things out, to make stuff take more time not in an effort to be a fun-killer, but rather because time should be of the essence and, quite frankly, I like to see time pass. Being an adventurer is not a summer job that you do once, get rich quick, then get to retire at level 9 in September to go rule that new barony your level dictatest that you get. These things need to take time. One of the ways that I use up that time is to put a brake on the runaway loot-to-cash train.
I set an amount in my campaigns that represents the maximum amount of treasure that can be converted to gold in a single week. This time represents finding the right buyers, negotiating the right price, moving valuable items from place A to place B, all while minimizing the risk of theft and being swindled. Most campaigns have a 1,000 gp per week limit, though I do make some exceptions. In ACKS, for example, I tie the weekly limit to market size; larger markets allow for swifter conversion of treasure to coin, smaller ones take longer. For me, this solves both the conceptual problem of "who's buying this stuff and how are they doing it" by distributing the loot over time, giving the market the time to recover the lost coin, and my need to use up some time.
In ACKS, I use the following market sized-based rates of exchange:
- Class VI Market: 500 gp per week
- Class V Market: 750 gp per week
- Class IV Market: 1,000 gp per week
- Class III Market: 1,500 gp per week
- Class II Market: 3,000 gp per week [2,275 gp per week]*
- Class I Market: 5,000 gp per week [3,375 gp per week]*
*The rates in brackets are less forgiving and fit the progression a little more tightly. Use these if you want things to take more time (of course, if you want things to take more time, you could always just use a flat rate of 1,000 gp per week).
So far, this system does not take into account ACKS's very detailed market demand modifiers. Perhaps the next iteration of these rules will. Further, I'm considering adding an option to allow players to open themselves up to more risk in this matter with the trade off being a better rate of exchange.