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Evaluating Fine Diamonds, Gems, and Jewelry

Your jewelry should only be appraised by qualified professionals with credentials.

Unlike hiring an attorney or a medical doctor where state law requires schooling and exams to ensure proficiency, there are no educational requirements to legally call yourself a jewelry appraiser.  People often assume that when they enter a licensed jewelry store and a jeweler charges them for an appraisal (signing his/her name over the title of “appraiser”) that this is an accurate report.  Unfortunately, it may not be.  Shockingly, there is no assurance that the appraiser has received any training, passed any exams, or owns any of the necessary equipment.  To be a licensed jeweler, anyone (without training or experience) can pay a small fee to state or local government agencies, become a “jeweler,” and legally sign appraisals.  Whatever the purpose of your appraisal, it is critically important to ensure that your appraiser has the necessary credentials to accurately identify and value your property. 

The High Costs of Inaccurate Appraisals

Inaccurate appraisals can:

  • Increase your insurance premiums without giving you additional coverage

Jewelry stores mark items up significantly above their wholesale costs and often inflate their appraisals well above the sale price. There was an incident where a local jewelry chain bought a piece from a wholesale company. The wholesale company paid $4,000 for this piece, the jewelry chain bought it $5,000. They then sold this piece retail for $15,000 and gave the customer an appraisal valuing the piece at $20,000. The piece was unfortunately later stolen. The insurance company did not reimburse the customer for the appraised value or even the sale price even though the customer had been paying premiums for a $20,000 piece of jewelry. Instead, the insurance company determined that the piece could be replaced for $5,000 and therefore paid $5000 to the customer.

Unfortunately, the practice of “proving” a customer is getting a deal by providing an inflated appraisal is all too common. In reality, this results in consumers paying much more for their insurance than is necessary. Ninety-five percent of insurance companies will collect premiums based on these types of inflated appraisals, but upon notification of a loss, insurance companies will determine the replacement value (normally wholesale) and then try to replace your item or pay you the wholesale price. Check with your insurance company to see if you are paying premiums based on appraised values and if you will be reimbursed for the appraised value or the wholesale replacement cost.

  • Lead to paying too much

  • Purchasing an overvalued item can be extremely costly. An inaccurate appraisal that, for example, identified a sapphire as being natural Burma as opposed to heated Ceylon could wind up costing a client $100,000 more than the actual value of the piece.

    • Result in being paid too little

    The opposite can be equally costly. If a client was looking to sell a sapphire that had been appraised as unheated Burma, but was actually unheated Kashmir, his/her loss could total $380,000. There are many more countries of origin; many more treatments; and many more factors (the cut, tone, hue, and saturation of color, etc) that affect the sapphire’s value. Even if your appraiser is able to accurately identify the sapphire and possibly even has a lab report from a respected lab such as AGL(American Gem Lab), your appraiser must have the experience to be able to place an accurate value on it. If the sapphire is misidentified or misvalued, the appraisal can prove very costly.

    A jewelry appraiser must be able to:

      • Accurately identify items.

      • Assign value to them based on current market conditions.

      • Report his/ her findings according to the procedures, ethics, and standards of appraisal practices.

      • Photograph pieces, research them, write clear reports, and often testify in court to explain and justify his/ her appraisals.

      How much will my appraisal cost?

      How much your appraisal will cost depends on the item being appraised.

      Appraisers charge either by the hour or per item. Obviously, a more expensive appraisal is not necessarily better. Appraisers should never charge based on a percentage of the appraised value.

      We work with a number of highly qualified appraisal professionals, and while their rates vary, most offer free consultations. Be sure and discuss your needs with them. The more information you provide, the better they can advise you – and the more accurate your estimate will be.

      Why are there so many different types of appraisals? Shouldn’t an item have a single value?

      Gems and jewelry are passed through a supply chain and accrue costs at every link for insurance, security, lab reports, etc. Different appraisals are designed to reflect pricing at these different levels (i.e., fair market is higher than replacement, which is higher than liquidation). Ideally, insurance companies would pay claims at fair market value. Unfortunately, this rarely happens. Similarly, when consumers liquidate their jewelry they are reintroducing a used product into the beginning of this cycle. Often the bids they receive will be beneath wholesale since those in the jewelry trade can purchase a similar item from a reputable dealer at any time. A quality appraisal that is appropriate to your circumstance can help minimize your costs and/ or maximize your gains.

      What’s the difference between an appraisal and a lab report?

      Gemological labs such as the GIA (Gemological Institute of America) do not appraise gems or jewelry. They identify a gem and analyze it for color, cut, clarity, weight, treatments, and possibly origin. They do this work under ideal (laboratory) conditions and have access to the most sophisticated gemological equipment. They do not place a value on items, ever.

      Appraisers often recommend getting reports from organizations such as the GIA since they can use this information to place a very accurate value on gems and jewelry. Moreover (as discussed previously) appraisals can vary greatly in their quality depending on the qualifications and experience of the appraiser. A lab report gives an appraisal much more credibility than it would have on its own.

      What credentials should I look for in an appraiser?

      Gemological Education :

        Gemological Institute of America

        • GG (Graduate Gemologist)

        The Gemmological Association of Great Britain

        • FGA (Fellowship of The Gemmological Association)
        • DGA (Diamond Members of the Gemmological Association)

        Canadian Gemological Association

        • FCGmA (Fellow of the Canadian Gemological Association)

        Canadian Institute of Gemology

        • AG (Accredited Gemmologist)

        Gemmological Association of Australia

        • FGAA (Fellow of the Gemmological Association of Australia)

        German Gemmological Association

        • FGG (Fellow of the German Gemmological Association)


      Formal Training in Appraisal Practices

      NAJA   The National Association of Jewelry Appraisers

          • CMA (Certified Master Appraiser)
          • CSM (Certified Senior Member of the National Association of Jewelry Appraisers)

      ASA     American Society of Appraisers

          • AM (Accredited Member of the American Society of Appraisers)
          • ASA (Accredited Senior Appraiser of the American Society of Appraisers)
          • MGA (Master Gemologist Appraiser)

      ISA       International Society of Appraisers

          • ISA (International Society of Appraisers Accredited Member)
          • CAPP (Certified Appraiser of Personal Property)