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Appraisals! Appraisals! Appraisals!
Just what is an appraisal? It's a piece of paper expounding on value (whether that value be determined by Estimated Retail Value or Insurance Replacement Value). It's also, no doubt, a sales tool, which can or should be used by a prospective buyer to come to some kind of determinaton of value on a piece of jewelry.
When you buy a piece of jewelry from a jewelry store, they may offer you an appraisal. If the appraisal was performed by a third party appraisal firm then you may have something of value in your hands. If the appraisal was performed by an "on-site" gemologist employed at the jewelry store, the question of "who's working on who's behalf" comes into question.
Buy a piece of jewelry online and go into any jewelry store and just because you did not buy the item in that specific store, you'll more than likely be told you paid too much.
The Acid Test...
Take your favorite piece of jewelry (a piece you have owned forever) and bring it to that local jewelry store and ask how much it's worth and they'll give you an estimate. Better yet, get it appraised by their "on-site" gemologist. Then ask them if they'll buy the piece from you for the quoted estimate. The answer will be a resounding NO! (unless they can grab it from you for pennies on the dollar).
Take the piece to a pawn shop and they'll offer you some variation of the spot price of gold (if the piece is set in gold) and if the piece has a diamond - what until you hear just how low they can go.
Jewelry is just like any other consumer product. Buy a car, drive it off the showroom floor, bring it back to the dealer a week later to sell it back and see what they offer.
However, jewelry and gems do have one outstanding feature. Insurance companies offer their customers the ability to increase their loss policies (for jewelry) each and every year upwards by 5%!
The biggest buyer of jewelry a few years back was not a national jewelry store chain or any combination thereof -it was a Major Insurance Carrier!
This may answer the question of what type of an appraisal consumer's should seek! Insurance Replacement Value appraisals are based upon "true" values upon which an insurance carrier will either replace the lost item (at the replacement cost stated within the policy) or their right to replace the item at their own cost (of course discounted to them, which they receive due to the enormous quantity of replacement pieces they purchase each and every year due to loss).
Estimated Retail Value appraisals can be helpful determining "retail value" but if such an appraisal is presented to your insurance carrier, your premiums will be high and if the insurance carrier has the right to replace the item at their cost (and not hand you over a check for value) then you've paid through the nose for extra coverage you did not require.
If the item is so unique that you feel no insurance carrier in the world could replace the item - seek out the most qualified gemologist you can find to determine value.
Quality Assurance Report...
A QAR can be useful in just determining if a piece is authentic. In other words, you just purchased a 3 carat diamond which is set in Platinum. Is it a 3 carat diamond? Is it set in Platinum? The least expensive way to find out is to bring your piece to an independent appraiser and ask for a QAR.
The Last Word...
Remember, every appraisal in the world is based upon an opinion. Nothing is set in stone except the ring on your finger. Every appraisal in world has disclosures protecting the appraisal company from legal action. The most widely known gemological lab has been under fire by the FTC however, consumers flock to them for appraisals based upon brand name recognition.
Remember, always buy a piece of jewelry or gem based upon what that piece brings to you!
Other guides relating to jewelry and gemstone buying which you may find helpful are as follows:
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