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What is my jewelry worth? and How can I find out if I got what I paid for?

The short answer to “what is my jewelry worth” is that there is no short answer. It’s a tough question, as there are usually several different answers requiring a few more questions. Did you just buy it or inherit it and want to insure it? Did you just buy it and want to make sure you didn’t pay too much? Did you just inherit it or receive it as a gift and need to pay taxes on it or make sure it’s fair to everyone in the family? Do you want to use it as collateral on a loan? Do you want to sell it? If so, how quickly do you need the money? A single piece of jewelry can have several quite different values based on the answers to these questions.

 

We can help you figure out the rough value of your jewelry based on which of the values you want to know, but we may need to do an appraisal of one type or another if you want to know in any detail what you really have or if you need to know for legal or insurance reasons.

 

 

There are four basic types of jewelry appraisals. The first and probably the most common and most familiar is the “Insurance Replacement Value” appraisal. This type of appraisal is based on the full retail value of your piece, and should reflect a value that is at least 10% or more over what you paid for it if you bought it recently. The appraiser will value it over the purchase price to make sure that when you have it insured you will be covered if the value of the metal or stones increases over the two to four year period the appraisal is intended to cover. In automotive terms, this would be the same as “sticker price” for the most expensive model in the line, plus 10% to 20%. This is not the type of appraisal you should get if you want to know if you got what you paid for.

 

Some jewelry retailers advertise that their “Prices are guaranteed to be below appraised value, or your money back!” This is a deceptive practice as they know that if you get your new ring appraised, the appraiser will automatically do an Insurance Replacement Appraisal and appraise it for well over its real market value, just to make sure you have sufficient insurance. They can comfortably sell it for 10% over market value and still be safe in their “guarantee”.

 

In the case of a diamond, the right question to ask to find out whether you paid too much is this: “I want to match this diamond for a pair of earrings. How much will it cost to buy another one just like it?”

 

The most important things in an Insurance Replacement Appraisal are those things that will protect you in the event of damage or a loss. These things include a very detailed description of the piece, to include its manufacturer (if known) and method of manufacture, the number, weight and quality of the stones, the exact metals it is made of and its weight, any identifying features like stamps, its condition at the time of the appraisal and at least one good photograph. The value assigned to the piece is of a secondary nature, as it really is there only to make sure you have adequate insurance coverage should you have a loss and to allow the insurance company to set your premium.

 

Some insurance companies retain the option of choosing who will repair your jewelry or of sourcing and replacing your jewelry themselves in the case of a loss rather than cutting you a check for the appraised value and allowing you to choose where you get it repaired or replaced. They will quite often receive a substantial discount from the jeweler they regularly go to, and will thus have to pay out less.

 

In the event of an insurance company replacement, a highly detailed description and at least one high-quality photograph of your jewelry can help you make sure you are getting the same thing and the same quality of jewelry you had before, not just something similar, or in the case of damage, that it is properly repaired back to its original condition and not just “patched up”. For a small fee, we can make a DVD of a microscopic examination of your jewelry. These are helpful in conjunction with an appraisal should you ever have an insurance claim and can show without a doubt the condition it was in at the time of the appraisal.

 

Check with your agent if you have any questions regarding your rights and responsibilities concerning your jewelry insurance rider and if you want to know if they or you will have the choice of where and how it is repaired or replaced.

 

Another type of appraisal is the “Estate Value Appraisal”. This appraisal shows the value that applies to a piece of jewelry for the purpose of settling an estate, equitable distribution of property, or a valuation used for tax or gift purposes. This value generally does not have a built-in increase of value like the Insurance Replacement appraisal as it is intended to be a valid evaluation on the day it is written or on a specific date. This value represents the most accurate retail value of what your jewelry might cost “today” if you were to find it in a jewelry store for sale. In automotive terms, this would be similar to the negotiated price discounted from “sticker price” for your particular car, or what it might actually cost to drive it off the lot. This is the type of appraisal you should get if you want to know if you got what you paid for.

 

The third type of appraisal is the “Fair Market Value”. This type of appraisal reflects what a willing buyer and a willing seller would agree to if the piece was put up for sale. Generally, this value will be somewhat below the retail value if the piece was for sale in a jewelry store and reflects what you could reasonably expect to sell it for if you can find a willing buyer, such as on EBay or Craig’s List. This type of appraisal also has no additional value added as a cushion against inflation or fluctuations in the metals or stones markets. In automotive terms, this is similar to “Blue Book Value” or what you might get from an Auto Trader ad.

 

The fourth type of appraisal is the “Forced Sale”, “Distressed Sale” or “Liquidation Value” appraisal. This type of appraisal reflects the value of your jewelry’s components on the wholesale market. This type of appraisal is used primarily for banking purposes, for example determining the value for its use as collateral on a loan. It is based on what you could reasonably expect to sell it for within the next twenty four hours. The value reflected will be the lowest of all of the different types of appraisals, but may still be higher than what you might actually get if you sold it for scrap. In automobile terms, this is what you might get from an auto salvage company or if you sell it back to the dealer for cash.

 

Then we get to the bottom line. What is your jewelry really worth, if you want to sell it today? Well, that’s based on the precious metals market and the wholesale market of the various gemstones it may contain. Most of the time, you can get around 50% to 70% of the actual value of the metals and about 30% to 60% of the actual wholesale value of the stones.

 

The reason for the difference in the metal is that it costs labor to remove the stones, it costs money to ship the metal to a refiner, it costs the refiner a substantial amount to reduce it to pure gold, silver or especially platinum, they have environmental costs they must pay and the refiner needs to make a profit too. The person buying it from you needs to make a profit of some kind and must figure that the market may go down between the day they buy it from you and the day the refiner buys it from them, and in these times of economic uncertainty, that can be quite substantial. It is also quite possible that even though your jewelry is stamped “14K” it might really be more like 13K. That is more common than you might think, especially in older jewelry. By the time you’re done, you usually will get half to two thirds of the actual market value, depending on who you are selling it to.

 

There are a couple of reasons why stones don’t bring as much as they might otherwise be worth. The first is that it takes labor to remove them, grade them and stock them and the person buying them may have to wait for some time to be able to sell them again, especially stones like baguette cut diamonds or old European and mine cut diamonds. But the main reason is that someone that might have a use for them either already has enough for their needs, or can get them wholesale overnight, so the only way it makes sense for a business to buy them from you is if they can get them for substantially less than they might be able to on the open market.

 

If the piece is in good enough condition to be resold, is it a style or design that is in demand now? Or is it something that was hot ten years ago? Jewelry goes in and out of style, just like clothing. The jeweler must also be able to guarantee it to its new owner just like something new, so it might need some repair or restoration work. Most jewelry stores are very choosey about the new jewelry they buy for resale and have all the inventory they need so they will only consider this if it is something that they know they can sell quickly and stand behind as though it is new.

 

 

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