Do you have insurance on your fine jewelry? Do you even want to insure your fine jewelry or collectibles? If the answer to that question is yes, you need a seasoned, GIA trained professional using the right equipment to competently evaluate and value your prized possessions and Pawnshield is qualified to help you!
There are different types of appraisals, each is used for a different purpose, and unfortunately determining value can be an ambiguous process since there are no straight line fixed formulas, rules or methods. The three most important are:
Liquidation, Fair Market Value (FMV) and Retail Replacement.
- Liquidation Appraisals. Are typically used when consumers are looking to liquidate their property quickly, turning it into cash. There are a number of underlying fundamental factors influencing consumers to use this appraisal approach. These sales can be forced by the courts during bankruptcy proceedings, time constraints, need cash for bills quickly and other limiting factors. Under these circumstances, consumers are best advised to obtain numerous bids from dealers who are in the business of regularly buying and selling jewelry. This is the type of appraisal that most businesses in the market rely on, including us when purchasing.
- Fair Market Value Appraisals. According to the IRS, “Fair Market Value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.” If you were selling the item by yourself let’s say on eBay or in the newspaper, this is the type of appraisal that you would rely on.
- Retail Replacement Cost. This Appraisal Report refers to the cost necessary to replace the items being appraised, with new materials of like kind, quality, and similar utility on or about the date of the appraisal. These are generally used for insurance purposes and marketing purposes. Retail Replacement Appraisals are based on replacement prices and are most often substantially higher than every other appraisal. Especially if written by the selling party, they can be expected to be biased on the high side, in the nosebleed section of pricing sometimes. Should you purchase jewelry with values established by one of these…No
In the preparation of any of these appraisals, you should know there is a substantial void in both working and academic knowledge amongst many so called self proclaimed “Jewelry Appraisers” that sit behind a repair bench or stand behind the jewelry counter. Most rely solely on “hunches”, “best guesstimates based on many years of experience to convince you of their self proclaimed expert knowledge”, “electronic devices” or some combination of all the above when making value and evaluation assumptions to be relied on. Many of these self professed “experts” could not reliably by themselves differentiate natural Diamond from Moissanite or Cubic Zirconia. Self proclaimed experience in retail by itself should not be the sole factor when choosing a jewelry evaluation and valuation professional.
You ask why not? Because, over the past decade alone, jewelry and enhancements have evolved at an incredible pace. Keeping up with these trends requires ongoing academic training and exposure to organizations such as the Gemological Institute of America and other trade organizations that can properly provide a professional with a sufficient foundation. The Gemological Institute of America is the world’s foremost authority on diamonds, colored stones, and pearls. Students and professionals from around the world turn to GIA for the knowledge, skills, and credentials that launch successful gem and jewelry careers, and you should seek a reputable GIA trained professional as well.
Many self professed experts will tell you that experience alone is the best source of information and knowledge. There is a small tidbit of truth to here, however, make no mistake about it, there can be no substitute for a tradesman with many years of experience that also has a solid academic foundation. One that has been properly trained by an industry recognized, reputable institution and equipped to use gemological instruments in addition to over the counter technology in the detection and identification of enhancements, simulants, synthetics, imitations and more! There are more than one; however, the Gemological Institute of America is the foremost authority on the subject recognized around the world!
Many over the counter electronic devices relied on by un-credentialed resellers are inherently unreliable, outdated, improperly maintained, or as we have observed over the years, improperly used and regularly render false information! Furthermore, these devices can not distinguish between natural and synthetic diamond, and worse, most dated devices can not differentiate between natural diamond or even moissanite. Prior to each use, most manufacturers would agree these devices should be calibrated, which most don’t do. In fact, most that rely on such devices just turn them on prior to each use, wait for the ready light to turn green (these devices measure heat, and have copper sensor that heats prior to use) and then touch the probe to the stone and accept whatever outcome is produced.
Where would you place your hard earned dollars? 1) A tradesman with many years of experience relying on a $200-$300 piece of equipment? Alternatively, 2) a seasoned G.I.A trained Gemologist with many years experience that’s going to subject your valuable property to a variety of tests who may also seek the opinions of other like minded professionals as well to validate their own findings before making any assumptions. There are some really knowledgeable salesmen out there that are also super resellers, however, it’s not just about experience, it’s about having the proper educational background and experience to perform technically complex appraisals.
G.I.A trained gemologists train on lab equipment such as the refractometer, polariscope, microscope, specific gravity liquids, 10X triplet loupe, calcite dichroscope, Chelsea filters and more. This type of educational experience combined with many years of trade experience can not, and should not be substituted for experience alone.
Here’s what else you should know about over the counter detection devices. Electronic detection devices are but one tool that should be used amongst many during the examination and analysis of gemstones, but not to be relied on exclusively to render final assessments. Electronic test devices are useful to some degree, but extremely limited in the scope of what they can do. They are of no use in identifying a stone that has been laser drilled, Chemical Vapor Deposition (CVD), High Pressure High Heat (HPHT) produced synthetic Diamonds, or a Diamond that has been subjected to an acid treatment and then fracture filled, or distinguishing between a natural or synthetic Ruby or even one that has been filled with a foreign material. This knowledge deficiency limitation makes it nearly impossible for “experience only” individuals to generate reliably accurate assumptions and or valuations on a consistent basis.
Consider this; most people likely have no idea what information constitutes a good appraisal. I’m relatively certain you will have relied on the professional you have engaged to know what is needed and hope they provide that to you when all is said and done. Most probably don’t even care until the time comes when you have to actually rely on one, so let me inform you on what constitutes a good appraisal. The below information is not to be considered all inclusive.
If you have a one page appraisal, they are generally worthless. Let me explain. If you wind up before a judge for whatever reason (or law enforcement personnel because your piece was stolen and your trying to recover it), the court will have questions that will need to be answered that your one page report likely does not address. For example, if the piece was sold by the same Company that prepared the report, does it contain a disclaimer stating so? If your report is grossly overstated, Insurance Companies will surely figure it out and check to see if bias creep was a factor that resulted in an grossly overstated valuation. If so, they are going to get their own comprehensive report that will likely satisfy the courts request anyway and the valuation will almost certainly be more accurate. An overstated insufficient report will not be considered as reputable or relied on by the court. Does the report include three samples of similar pieces from legitimate resellers in the marketplace of similar price? Does it include the experience and background of the person who prepared the report? If not, then how does anyone know if the person preparing the report in the first place was even qualified to make those assumptions? Does the report state that whoever prepared it also physically examined the article? Does it include detailed weights and measurements of all the gemstones in the mounting? Details regarding buyer’s identification mark that may aid in its recovery? A detailed set of images? Detailed list of the equipment used upon which the preparer makes his assumptions, weights, and measurement? A properly prepared appraisal will answer all of the above and more.
Additionally, if you have a high value item such as a large diamond, you need a report that addresses all of the above as well as a Gemological report on your diamond from a reputable lab such as the Gemological Institute of America (G.I.A Diamond, or Dossier Report) or the European Gemological Lab (EGL Los Angeles or New York Labs only) that corroborates your quality analysis findings.
If you have a need for a trained professional to address all of the above, our experience, access to some of the best resources in the industry, working knowledge and academic background are what differentiates and sets us apart from other jewelers & potential competitors. Pawnshield can help you!
Our knowledgeable professionals are recognized and respected industry professionals with experience writing complex valuation reports for the banking, insurance, and consumer markets. Well trained in Gemology, including, but not limited to, period pieces, luxury items, estate jewelry, luxury wristwatch, and pocket watch valuations and have access to a variety of resources that can provide you with an accurate Appraisal for whatever purpose you need.
Pawnshield has been a trusted resource since 1994, come see us for a free over the counter evaluation and let us help answer whatever questions you might have next time you find yourself in need of an qualified GIA trained appraiser!
Have a blessed day!