Eragon and Garrow went to him and tried to identify and sell Saphira's egg in Eragon. The duo requested to go into Merlock's tent because they did not want others to see the "stone". Merlock told them that the "stone" was hollow, but that it was harder than diamond. He also mentioned that there might be other people in the southern cities who would like to spend their money on items like this. However, Merlock did not buy the egg because he said he didn't know the value and did not want to spend the time looking for someone who might want to buy it.
It might be possible that he told the Ra'zacs about having seen Saphira's egg, which led them to Carvahall.