“We guarantee it will appraise for double what you pay.” What’s wrong with this picture? Are appraisers supposed to reflect what things sell for in the marketplace or appease the jeweler by making everything sound like a steal of a deal? When avenues for discounted jewelry became prevalent in the marketplace several years back, this half-of-retail scenario held up for the discounters for a while. However if the retail markups in this industry have dropped – which they certainly have, so shouldn’t the apprised values? So why do some appraisers keep appraising sky high even though the industry margins keep getting smaller? Because the “half price” jewelers want them to, that’s why.
The consumer does not appreciate hearing that their insurance company is offering them half of the appraised value in a settlement after paying premiums on the full amount, but guess what? The insurance companies are shopping through brokers and discounters for their replacement, and usually get better prices than consumers do. In establishing the original coverage they have to rely on the appraiser’s information and use that value portion to set premiums. If that value is way over a realistic purchase price it only inflates premiums and sets up a future confrontation with the client. Yes, appraisals need to reflect the overall marketplace and give the consumer options for replacement, but they also need to be realistic and not merely a “feel-good” value the jeweler wants “their” appraiser to reflect.
If you want to appraise real estate, youneed a special license. If you want to appraise jewelry, just print a business card.
When I got into the business of appraising jewelry over twenty-five years ago, no special licensing was required to place value to someone’s jewelry. Today, little has changed. Appraisers of fine jewelry abound, some willing to do anything to acquire business – and I mean anything.
NGL has given up enough business over the years to support many “appraisers” who don’t really care what value goes on an item – just so they can profit by the transaction. I keep seeing appraisals up to eight times the jeweler’s cost—a bit high considering today’s competitive market, don’t you think? Since NGL does not cater to all elements of the jewelry industry, we loose business to those who do, but retain an integrity to the remaining jewelers who believe in honest representations to their clients.
Many appraisers also deal in jewelry on the side (or up front). Not illegal, not even immoral except when they represent themselves as “independent”. And ours isn’t an isolated industry. Appraisers and agents in other fields routinely enter into transactions over the articles they examine, but I think that smacks of conflict- of-interest.
Am I ever tempted to sell to the public, especially after seeing the rip-offs I do? Sure. I could make a lot more money than I do now, but feel I would impugn my integrity to the industry and the public as an independent appraiser. If I do ever cross over, I will be up front about it.
As the Northwest’s first independent fine jewelry appraisal laboratory and one of the few that doesn’t sell jewelry, NGL takes pride in offering uncompromised appraisal services for insurance, estate and other legal purposes. I hope that matters to you.
I am getting really tired of seeing “certified” diamonds and pre-sell appraisals that don’t stack up to the long established standards of the Gemological Institute of America (GIA). Appraisers who advertise their Graduate Gemologists (G.G.) credentials should follow the rules they were taught, whether appraising for the manufacturer, jeweler or consumer.
Ideally, an appraisal is prepared for the owner of the jewelry, with accurate grading and a realistic value for insurance purposes. Nowadays though, jewelers – both traditional and internet, are relying more and more upon appraisals prepared in the interest of selling the item appraised.
These “pre-sale” appraisals are everywhere, even on modestly priced articles and are often supplied by the manufacturers. Don’t get me wrong, I think up-front representation is great, (we started doing similar preliminary reports twenty years ago) but what I am seeing are reports which are more “jeweler friendly” than gemologically accurate. And the values attached tend to be consistently generous (at least compared to the values we follow).
Loose diamonds, too
The sale of loose diamonds on the other hand, usually involves no value – just grading, and that is where some very blatant misrepresentations have come into play.
Unfortunately, obtaining a pre-certified diamond doesn’t guarantee you are getting what the paperwork says. We do a fair amount of appraisals involving verification of pre-existing reports where we check for authenticity and accuracy.
We have uncovered many instances of inaccurate grading if not downright fraud from world-recognized laboratories as well as look-alike “labs” offering bad reports on rice paper.
The remedy is to always have your purchase verified during the appraisal process. We examine the previous document and if discrepancies are found, point them out. In the case of GIA and AGS verification, we will reference the document on our appraisal.
In the event of significant discrepancies you do have recourse. Since the jeweler owes you the quality they represented (even if they didn’t do the lab report) they must make good on your purchase. If you like the article but find it was misrepresented, you may elect to re-negotiate the sales price.
Either way, you don’t have to live with a misinformed purchase. Jewelry is supposed to make you happy, isn’t it?
Estate appraising follows the same descriptive format as for an insurance appraisal, with the vital exception in the value referenced. With tax implications and possible heir distributions, an estate value varies radically from the retail value and is dependent upon a number of factors.
When appraising estates, a fair market value is used which considers the secondary markets available for the article, its condition and marketability. There is no standard correlation between retail and fair market. One item may auction at a much higher value than an item that appears similar because of its vintage or manufacturer. An article may only have scrap value because of condition. These important factors take an expert in estate appraising to determine, especially in the case of vintage/antique markets, watches and colored gemstones.
Upon your needs and the instructions of your attorney, we can advise you on what should be appraised and give full documentation that will hold up for the Probate Court and Internal Revenue Service. An NGL appraisal should also negate the need for two appraisals when parties are in conflict. We use the same legal parameters regardless of client, so there is no such thing as “high” and “low” appraisals.
Various appraisal and jewelers organizations are currently looking into a recent case that many believe exemplifies the need for regulations on the practices of jewelry appraisers.
The case goes something like this: A local jeweler is given a rather large color-change stone in a ring mounting for repair work. No documentation exists on the article (which was an inheritance) and at the time was though to be of minimal value by the customer, according to the jeweler.
When stolen from the jeweler however, the article with no identity becomes a nine carat rare and expensive natural alexandrite chrysoberyl.
At least this is according to the appraiser who never saw the ring, but through a series of questions with the client made this determination and wrote a document stating an absolute conclusion with a value in the neighborhood of $50,000.
When contacted concerning this matter, several of the area’s top Graduate Gemologist/appraisers had turned down the proposition of providing such a document. There was no proof of the stone having ever been documented as natural and since its original place of purchase was stated to be Mexico in the 1960s, when very few nine carat alexandrites existed, the possibility of such was deemed very remote. Add to this, the fact that synthetic color-change sapphire is commonly sold as “alexandrite” throughout the world, and has created one of the most common misnomers known to the jewelry industry to date.
The case went to trial. The judge heard testimony of two Graduate Gemologists who believed the likelihood of the stone being natural was remote. The judge read the report of the appraiser saying it was natural as well as heard the plaintiff’s testimony describing the correct color-change attributes for natural alexandrite.
In the end, it was the plaintiff’s testimony that won out – a judgement in the vicinity of $50,000.
The plaintiff’s lack of tangible proof of what was owned was apparently not important. The burden of disproving what they may have had was on the defendant.
The plaintiff’s failure to hire an expert with a gemological degree was also apparently not important in the eyes of the law. Since the state of Washington has no regulations on jewelry appraisers and therefore no requirements of them, the plaintiff’s expert was considered as valid as the defendant’s.
What can be learned by this case? Most assuredly, a customer can make any claim and put the burden of proof on the jeweler. Without documentation, one might think the plaintiff had little chance. But it was this lack of evidence that worked to their benefit.
While this once again stresses the importance of proper job take-in procedures, this alone won’t solve the problem. The jeweler needs to qualify a customer’s expectations, anticipate potential problems (however remote) and act to prevent them.
It also wouldn’t hurt to utilize the services of an independent and reputable gemological laboratory when the need arises.
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 theultimate 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 tha 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 acomplishes 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.
The days of the one line generic jewelry appraisal are numbered. The insurance industry is becoming more involved in the type of appraisal their clients obtain and sending them to independent laboratories for complete and accurate gemological descriptions – like the ones NGL has offered for over a decade.
In addition, diamonds individually valued at over $10,000 often require a diagram of their internal characteristics. This service is always available through NGL and although we recommend a loose diamond for such inspection, mounted diamonds can be plotted as well.
The most significant changes in the appraisal business are going to be coming from new legislation, however. In both the US Congress and Washington state legislature, bills to regulate the appraisal industry are being reviews and will be seeing action soon. First affected will be the real estate business, long a target for congressional scrutiny, but next will be personal property appraisers, such as those of fine jewelry. We at NGL welcome this intervention, but only hope sufficient requirements and limited “grandfathering” for appraisers is also enacted.