The Value of Diamonds and Jewelry


Diamond Buyers of Atlanta

The appraisal for a piece of jewelry can be a bit confusing especially after you have received a few offers for the item. Most people do not read the fine print on an appraisal, but rather just focus on the dollar amount at the bottom of the document. If you read your appraisal, you will probably find wording such as "this document is for insurance purposes for retail replacement." This value is for insurance companies to use to calculate the amount they are going to charge you for the premium to insure your jewelry.

This retail replacement price is usually higher than the purchase price as many insurance companies only pay a percentage of this stated value. This inflated valuation also is used to provide for appreciation in the value of the items due to typical increases over time of the price of diamonds and precious metals.

How does an appraiser determine this value? The appraiser will typically use a guide or index to reflect the current value of a particular stone such as a diamond, ruby, or sapphire. They will also take into account the current value of the precious metal such as gold or platinum and then estimate what a jeweler would charge to fabricate the piece. After these values are determined, many appraiser will simply double or even triple this price to arrive at the appraised amount. This ensures that the retail jewelry store can make their profit and that you can receive a comparable item to what was lost, broken or stolen.

So what does this mean when you want to sell a piece of jewelry? First of all the item is used. Especially when it comes to an engagement ring, most couples want their own, brand new ring they designed together. A couple exceptions would be a family heirloom or a signed piece from Cartier or Tiffany that they can be purchased at a discount. Other than these exceptions, most used jewelry can only be sold for the sum of the individual components as a dealer or wholesale buyer realizes most times these items are torn apart and the components used in the manufacturing of a new piece of jewelry.

Lastly, there are no laws or steadfast rules that dictate the appraisal of a piece of jewelry. Although many appraisers follow similar guidelines, there can still be significant variance of the appraised amount as one appraiser may grade a diamond or colored stone differently than another. This is one major reason why a diamond or colored stone should be purchased only when accompanied by an industry recognized laboratory certification such as a GIA certificate for a diamond or an AGL certificate for a colored stone.