Jewelry Appraisals

Jewelry Appraisals are something most people hold off from getting done, mostly because they are unsure of where to begin, who to trust, and what to expect.  This article will give you the right information to be confident with your jewelry appraisals.

Where to Begin

The Gemological Institute of America is the unquestionable authority on diamonds.  They literally created the system used by the entire planet for grading the quality of diamonds.  To their credit, GIA does not provide an appraised value for gemstones or jewelry.  To do so would discredit their assessment of the quality of the item.  (Keep this in mind, as we will touch back on this later.)  What GIA does do is provide unbiased assessments, education and certification to the jewelry industry.  So, people in the jewelry industry can go to school at GIA and receive the best education and professional certification available.

To begin with, you want to find a Jewelry Appraiser who is GIA Certified, specifically, with a GIA Graduate Gemologist diploma.  This is commonly called, "GG," in the jewelry industry.  GIA's own recommendation is to reach out to a national appraiser association, of course looking for a GG, but it is much more advisable to start with someone you already trust, such as your local jeweler.  If you do not trust your local jeweler, then keep reading, and learn some questions which will help you find a jeweler with more integrity.

Where Not to Begin

A very common problem with jewelry appraisals is people mistakenly have their appraisal done by the jeweler who made or sold them the jewelry.  Remember I mentioned to keep something in mind earlier?  Now is the time to pull that back up.  GIA, the authority on these things, specifically and intentionally does not offer appraisal services because they do not want their integrity called into question.  When a jeweler sells their client a diamond, for example, do you honestly believe they are going to have an unbiased opinion on the real appraisal value of that diamond?  Most certainly they will not!  They will be absolutely sure to "appraise" that diamond at a value higher than whatever the client paid.  This is a sure sign of a disconnect in regards to integrity.  (Perhaps it is time to find a more trustworthy jeweler.)

Caveat

Some jewelers with more integrity recognize this dilemma.  What dilemma?  The dilemma of, if you have been so lucky as to find a trustworthy jeweler, now you have to find a trustworthy jewelry appraiser as well!  A good jeweler recognizes your needs and finds you sound solutions.

Who To Trust

The solution is an independent jewelry appraisal.  This can take place in a couple different manners.  Predominately there are two options.

  1. The jeweler you already trust has a 3rd party independent Jewelry Appraiser come into their location to provide their assessment of the item.
  2. The jeweler you already trust provides you with an outside 3rd party independent Jewelry Appraiser which you contact and work with separate from your jeweler.

Because the jewelry industry is highly competitive, and geared towards convenience as well as security, the first option of having an independent Jewelry Appraiser meet you at your jewelers location is the most preferred option.  Higher end jewelers, who value integrity will generally offer this first option as their default, and will then have the second option available to their clients upon request.  This alone is another wonderful litmus test as to the integrity and trustworthiness of your jeweler: ask them if you purchase an item from them what are the appraisal options.  They should default to mentioning they have a third-party independent Jewelry Appraiser available or at a scheduled time who would provide this service.  Then, if you continue your litmus test and tell your jeweler you would prefer not having the appraisal done at the same place you purchase the item and if they might have any recommendations as to where you could go for this, they should have a ready response.  The jeweler who passes this test with shimmering colors would be the jeweler who then says of course they understand, and provides you with an unaffiliated appraiser they trust.

Another test for whether or not you should trust a jeweler is if, under normal circumstances, they are going to charge you for an appraisal of an item, no matter if it was purchased from them or if you did not purchase it from them.  Jewelry Appraisers make money providing their professional opinions and unique expertise.  It is not a common practice for them to give away this information for free.  If a jeweler is having an independent appraiser come to their location to appraise your new item, expect there to be an additional fee.

If the jeweler is not using an independent third-party appraiser, this should by itself send out a warning to you, but if you have chosen this jeweler regardless of this gap in integrity, your appraisal should be included at no additional expense.  Also, this type of appraisal is mostly useless, or not well regarded by anyone other than the jeweler who provides it.  (An insurance company will most likely see through this, but will also most likely not fight you on it, as you will be paying higher fees for something they know can be purchased for less.)

Under non-normal circumstances, you have spent a great deal of money with a jeweler, or they are hedging their bets that you will in the future, and they provide you with some level of complimentary services, such as free jewelry appraisals.  This is most common for a jeweler who has an independent jewelry appraiser come to their offices, however, in situations where larger quantities of money are involved the jeweler may also be willing to pay a completely outside source on your behalf.  Again, these are not normal circumstances, so do not expect this.

In the jewelry business, trust is everything.  Too often though, clients do not know on what criteria to base this trust.  Knowing the right questions to ask, and the proper responses to expect, allows you to find the most trustworthy jewelers with which to build a long-lasting relationship.

What To Expect

There are different types of appraisals.  Two of the most common jewelry appraisals are Liquidation appraisals, and Insurance appraisals or Replacement Value appraisals.

Liquidation appraisals provide you the value of your item if you need to sell it in a timely manner.

Insurance appraisals provide you with the amount you would most likely be expect to pay if you needed to buy the exact same item.  The Insurance appraisal is also called a Replacement Value appraisal, for this very reason.

Though this is not apples to apples, the following example tends to help most people better understand the differences in appraisal types.  For example, you purchase a brand new car, and you pay $100,000 for it.  You then drive it home, where an Appraiser is waiting for you, to provide you with a Liquidation appraisal.  Since your vehicle is no longer new, it has left the lot, it would be understandable, though frustrating to be sure, when the Appraiser provides you with a Liquidation value less than $100,000.  The lower value would be what you could realistically expect to receive if you were to sell your now used vehicle.

Changing the story a little, if you purchase the brand new car, and drive it home where the Appraiser is waiting to provide you with a Replacement Value, the Appraiser will assess the vehicle, and regardless of any minimal wear on the tires, added mileage to the vehicle, possible chip in the windshield, they would still most likely provide a Replacement Value of the vehicle at $100,000 or more.  This is because, if you had no insurance on the vehicle, and it were totaled or stolen, you would have to spend another $100,000 to replace that vehicle.  This is why it is called a Replacement Value.

Now of course there are a lot of other variables that come into play with a vehicle that do not with a diamond or other piece of jewelry, but the concept is what we are after here.  A Liquidation value is going to be lower than the Replacement Value.  (No, it is not realistic, if you need to replace your vehicle or jewelry, to expect to find someone else at that exact time who is trying to liquidate theirs.  That may happen, but it is not how the real-world operates, so it is not an expectation.)

With either appraisal type, Liquidation or Insurance, the paperwork you receive should be nearly identical.  It should include at least some detailed explanation of the following:

  1. Purpose of the Jewelry Appraisal (Liquidation, Replacement Value, et cetera)
  2. Qualifications of the Jewelry Appraiser conducting the assessment
  3. Any type of possible Restrictions, to include some clarity on terminology
  4. A detailed written description, which could most almost be used to recreate the piece if such a need were to arise
  5. Photographs of the item, preferably from more than one angle
  6. Signature of the Jewelry Appraiser, again with their signatory credentials abbreviated/listed

You should be able to take your appraisal and use it to properly describe each item to a potential buyer, or use it to have the item reordered or remade to as close to an exact match as possible.  Your jewelry appraisal should be thorough enough that it is an authoritative description of your jewelry.  Anything less is useless when, heaven forbid, the time comes for you to use and rely on it.

It is standard practice for Jewelry Appraisers to provide you with two printed copies of your finished jewelry appraisal.  One copy is for your own records, and the other is for your insurer or representative.  As the world is moving forward with regards to technology, though the jewelry industry is not known for their technological prowess, it is less common, though still something you should ask for, to also receive a digital copy, most likely as a PDF, of your jewelry appraisal, in addition to your printed copies.  This would allow you to simply and quickly e-mail your appraisal to your insurer or representative.

Knowing where to start with your jewelry appraisal, where not to start, who to trust, and who not to trust, and finally what to expect from your jewelry appraisal empowers you to make the best decision with regard to your precious possessions.

Reference List of Jewelry Appraisers

This article was republished with permission from Odin Nilssen.


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