As appraisers of fine jewelry and gemstones, NGL has been asking that question a lot lately as have many customers and jewelers alike.
By definition, retail means the price paid by the ultimate consumer, but with traditional jewelers’ practices out the window in today’s marketplace, retail ain’t what it used to be.
In the “old days” the retail environment was relatively stable. One could apply standard mark-ups to cost and arrive at values that very often stood up to the comparables in their marketplace. Today, comparables researched through market data (which is the preferred and most representative method of appraising) have brought retail figures down to leave some jewelers out of the mainstream.
The appraiser’s first job is to accurately identify and describe the article being appraised. The process of applying standard gemological procedures in a consistent nature gives the appraiser credibility in this evaluative process. To accurately describe the quality of a given gem and the mounting it is contained in are the basis for the appraisal and certainly the most important component in the insurance replacement process.
When the subject of “value” comes up, however, most jewelers feel the appraisal is only a vehicle to facilitate the sale. As long as the appraised prices reflects a “savings” to the customer, it is considered a sales tool.
To satisfy their impression of what makes a customer happy, many jewelers seek out the appraiser who will report their perception of “suggested retail price” regardless of what the item sells for. This they feel, implies the selling price as being a bona fide discount. All too often the opposite is true, if a comparable item is readily available at the new price and offered elsewhere for a similar amount it can be argued that the advertised price has now established a new retail for that item.
In the end, all the discounting game really accomplishes is either a false customer satisfaction or confusion. By reporting a value reflective of a “regular price” that never really existed, the jeweler and appraiser both are not only doing a disservice but are courting disaster in the eyes of the Federal Trade Commission and the office of the Attorney General.
With guidelines currently being written for appraisers, leading to licensing and regulations, this issue is at the forefront of discussions.
The jewelry appraiser who reports “value” to be that of a price unsubstantiated by actual sales will find themselves under a watchful eye.