[RPG] Am I giving too much treasure to the players in this encounter

The idea of treasure in 4e is simple: the DM has a list of stuff and money that you should get that level.

The consequence of this idea is non-trivial, as it leads to quantum treasure. If you carefully loot all of the random "trash" from monsters, pry out the iron nails of the doors, and otherwise find enough stuff to load up a cart and haul it back to town: you'll get the value of x treasure parcels, depending on how generous the DM is feeling.

If you fail to loot bodies for "trash" items and only carefully take obvious magic items and other "treasure" ... you'll end up with the same amount of gold at the end of the level ^*. In the Gygaxian sense, encumberance is just there to threaten the players with if they are hauling around ovbiously too much stuff without appropriate hauling mechanisms.

From Carrying, Lifting and Dragging:

Adventurers carry a lot of gear. When that quantity becomes extreme, it might be enough to slow you down and otherwise hamper your capabilities. The amount you carry should rarely be an issue, and you don’t need to calculate the weight your character is hauling around unless it’s likely to matter.

To figure out how much of the dungeon furnishings you can carry around before taking penalties, use (as stated in the above link) strength * 10 in pounds. (A completely unrealistic number, BTW). exceeding that will slow you down by some amount. You can barely lift strength * 20 pounds, but then you're moving at best 2 squares per move action (you have the slowed condition.)

Looting, therefore, should only be done if the players actively enjoy counting rivets. (I sometimes actually do, though it tends not to be in games like 4e). At first level, grabbing items off of fallen enemies is actually kind of neat, though it very quickly becomes irrelevant when you have your own, magic, items. If a player wants to obsessively loot, let him or her, ask them to describe how they're storing the stuff not on their person, and treat it like a treasure parcel that has to be redeemed at the local blacksmith.

If the person wants "full value" for the iron bands, rivets, broken doors, and daggers that they collect, they are welcome to sell them at 20% to anyone who wants to buy, and have that value deducted from a future treasure parcel.

If you're interested in other treasure-abstractions, take a look at Penniless but not powerless 1 and penniless but not powerless 2 which explore a further level of abstraction (quite welcome, IMO) for 4e.

What your group should do is ask the DM, in advance, for the kind of awesome treasure that they want. The idea of wishlists is quite handy for the players and the DM and saves time all around. Then just don't think about the coincidence of finding the exact magic item you asked for, it breaks suspension of disbelief. :)

^*This statement is less true for redbox, as treasure is randomly determined, but the idea remains the same, as the GM should treat the "load of trash" as a plot coupon for a treasure parcel. Quantum-treasure works, so long as you don't think of it like a simulation.

My group has just simply (for the sake of simplicity) just reduced whatever objects we find that have value to their gold value. This reduces book keeping and simplifies wealth in 4e.

However, if you want to pedantic, or show that an item is far more significant than a run of the mill gem stone there are skills in 4e that can be used for appraisal. In the Trade Goods entry in the compendium there is a section called "Buying and Selling:"

To perform either of these transactions, establish the total value of the trade goods in question. Use the major purchase column on the table in the Pocket Change entry to figure out the level of this transaction. For example, unloading a rare book worth 10,000 gp—or a forged copy of the same—would be a 15th-level transaction. Use this information with the Difficulty Class by Level table (Rules Compendium, page 126) to determine the DC to sell or buy a trade good, or to recognize or pass off a fake item.

Then make a check (usually Streetwise) to find either a buyer or a seller. Use the moderate DC for the level of the transaction in a location with a good-sized marketplace or population. Use the easy DC in major trading hubs such as the City of Brass, and the hard DC if the value of the items far exceeds the locals’ wealth. A successful check indicates that the transaction has been completed.

This is followed by a table with the prices of common items. Again, I would only use these rules occasionally, adventurers should have an idea of what the loot they find is worth, and its probably worth letting them just convert it to gold (As that is the point anyways).

So in short: Yes. Unless you want to show significance to a specific item.

Note: The RAW approach here would involve granting the players a Pouch of Platinum or similar which would allow them to automatically change gems into coins.