The Truth Behind Jewellery Valuation Myths
Most proprietors of jewellery stores provide appraisal services, and the majority are probably familiar with the occasional customer who requests these services after having a negative appraisal experience with an unethical jeweller or after hearing about someone else's negative experience.
Valuation certificates and how they are utilised have been at the centre of debate within the jewellery business in recent years.
So it is despite the fact that there are still various compelling reasons for customers to have their jewellery products appraised.
These unfavourable experiences might lead to the consumer believing several fallacies about appraisals, which in turn fuels the customer's doubts about the jeweller and makes the customer reluctant to pay for an assessment.
The following is an examination of some of the most widespread misconceptions, which every jeweller ought to be ready to dispel for clients who are uncertain whether they will obtain an accurate evaluation.
Myth 1: - The Value of Jewellery Continually Grows over time.
It is well-known that the markets for precious metals, diamonds, gemstones, and pearls all move independently and can even experience depreciation.
Therefore, the belief that the value of jewellery items and diamonds will always increase over time and are always a solid investment is particularly deceptive since jewellery valuations can fluctuate according to market conditions, exchange rates, metal costs and even fashion trends.
Myth 2 Anyone can Value Jewellery, Formal Training or Not
Industry associations specialise in jewellery valuation but it is up to the client to choose a sufficiently qualified specialist.
The reality: Yes, anyone may claim to be a valuer, just as anyone can claim to be an accountant. To become registered as a member of the National Council of Jewellery Valuers (NCJV), candidates must complete extensive training in gemmology and other specialised fields over several years.
Furthermore, after becoming registered, candidates must commit to ongoing education for the duration of their registered status to stay current with developments in the industry.
It is essential to exercise caution when deciding on a valuer for your valuable possessions since registered valuers can run or work in independently owned jewellery stores; salespeople and jewellers are not automatically considered valuers.
Myth 3: The End Result of Two Different Estimates for the Same Item Should be the Same
You may be surprised to learn that different value estimates could be assigned to the same item, despite all the estimates. This is because the retail replacement for the insurance method of valuation is by far the most prevalent.
However, it is also subject to variation based on the retailer where the item is to be replaced. As for the differences in operating expenses and other factors, retail outlets set their replacement prices differently.
Another thing to consider is the particular market segment in which the product will be substituted. Valuations for insurance replacement are not the only type of value available; there are other, more complex valuations, such as those required for auctions, private sales, or estate sales.
The results of these valuations can vary from one another.
Myth 4 - Family Jewellery Heirlooms are Valuable
Even though it is not always the case, there is a common misconception that all vintage or inherited jewellery is valuable for no other reason than that it is vintage or inherited. It is, of course, not always the case.
Remember that items with monetary value and those with sentimental significance are two very different things. The much-loved ring that belonged to my great-grandmother might include an extremely rare natural alexandrite.
However, it would be best if you were prepared to face the possibility that the ring contains a synthetic colour-change sapphire purchased in the 1960s.
Myth 5 - Jewellery should always Appreciate in Value
The idea that items of jewellery, and diamonds, in particular, are suitable investments that will grow in value over time is a misconception.
The truth is that this is not the case. Although certain high-end pieces are purchased as investments, diamonds and other types of jewellery worn daily are not considered reliable investments.
As of this, the value of jewellery can shift for various reasons, including shifting market conditions, exchange rates, metal prices, and even the mercurial nature of fashion.
Myth 6: A Valuation is an Indication of the Piece's Worth
Valuations are meant to indicate how much the Jewellery valuation price is, but in practice, this is not always the case.
Customers who have sought to sell products using an insurance replacement valuation report but have been offered a price much less than what they were asking for are likely to voice this issue.
Ultimately, a Jewellery valuation price determines how much someone is willing to pay for it. An insurance replacement valuation estimates the cost at which the item may be replaced "new for old" or "like for like" in a particular market; however, this does not guarantee that anybody will pay this amount.
Due to this, valuations performed for insurance are not intended to be utilised in determining sale prices. Valuations can be somewhat different depending on whether the goal is to determine the market value, the replacement value, or the liquidation value.
Communicating the reason behind the valuation is vital before beginning the appraisal process. Therefore, before beginning their work, a registered valuer is expected to enquire about the mentioned topics.
Myth 7: Appraisers can Revise a Valuation Even if they Haven't Seen the Item in Question Again
To ensure that values are kept current, articles must be reevaluated with each new valuation. It will ensure that values are accurate.
However, this method does not necessarily reflect the actual market worth, and it might result in parts being either over or underinsured. Hence it is not used by all insurance firms or companies.
Some insurance companies automatically add a percentage increase each year. Having your jewellery appraised once every two to three years provides a qualified appraiser with the opportunity to evaluate its current state and make recommendations regarding any necessary repairs.
Myth 8: A Bargain is Indicated When the Valuation is Higher than the Purchase Price
How often have you heard buyers claim something like, "I know I got a wonderful bargain buying jewellery online because the seller sent me a valuation certificate produced by a laboratory at three times my purchase price"?
Be wary of internet purchases that claim to come with a "valuation certificate," particularly those made by labs. To begin, laboratories recognised internationally for their expertise in diamond grading do not price diamonds or jewellery; instead, they produce reports that detail the characteristics of individual stones and their grades.
In addition, evaluations should never come from the company itself but rather from an impartial third party. When they are not, it is possible to discover that they are exaggerated, erroneous, or not suitable to the particular conditions of the buyer's local market.
Some internet sellers use valuations as a sales strategy; they are aimed to convince buyers that they received an incredible deal while they are possibly even overpaying for the item in question.
Worse, this inflated statistic ends up being the one that is used to calculate the insurance premiums that are paid for the subsequent years.
Myth 9 - Laboratory-Graded Diamonds are Capable of Being Valued even in the Absence of Certificates
The reality Is that to obtain the most accurate assessment possible, all of the facts should be submitted to the valuer before the beginning of the valuation process. The conclusion can be drawn that the value of your jewellery can be negatively affected if you withhold documentation.
Claws can hide grade-setting inclusions; bezel rims and closed-back settings obscure the dimensions of gemstones, making accurate weight calculation extremely difficult. In addition, there are limitations when examining a set diamond.
A valuer can never be one hundred per cent sure of a diamond's quality unless it is examined as an unset stone. These limitations include; coloured tints from the surrounding metal, which can impact the diamond's perceived colour; coloured pigments from the surrounding metal can affect the diamond's perceived.
Given these constraints, an NCJV registered valuer can only give a set diamond a grade of G for colour and VS for clarity at the highest possible level. If a grading report or some other paperwork is not provided for consideration, the value of any diamond of a higher quality will be underestimated.
It is impossible to accurately determine grades higher than this without removing the diamond for a more thorough examination.
Myth 10: Someone who has a Degree in Gemmology is Automatically Qualified to Make a Valuation of Jewellery Even if they don't have any Experience in the Field
While a gemologist can correctly identify and grade gem material, they do not necessarily comprehend the principles and methods for estimating the market value of jewellery and gemstones.
The additional education necessary to become an appraiser typically takes several years. To be considered qualified, an appraiser must know gemology and appraisal methodologies.
Myth 11: There is seldom a need to update valuations
Suppose the assessment is for a Jewellery valuation price. In that case, it should be revised about once every five years to take into account essential shifts in the market and pieces that have been freshly purchased or removed from the collection.
Valuations that are kept up to date are an excellent approach to identifying any flaws in the jewellery's condition that may have been missed or brought about by accident.
Myth 12: Appraisals of Jewellery Ought to be Provided Without Charge
Although it is evident to an appraiser that this is a misconception, it may appear logical for jewellery purchasers to anticipate that the assessment service will be provided at no cost.
The following is what you are required to communicate to the client:
- The valuation of a piece of jewellery can be time-consuming because it frequently involves completing research in addition to various laboratory tests and inspections.
- Additionally, there is a process of grading that requires time; consideration is to be given to the complexity of the article, market research, and, eventually, the drafting of the assessment itself.
An expert in the jewellery appraising field does all of this work because of their years of experience and education.
Final Thoughts
Even though much false information is floating around regarding evaluations of jewellery, fine jewellery should always be evaluated.
If the jewellery is misplaced or stolen, the evaluation can assist the owner in recovering the financial resources necessary to replace the missing item or pieces.
As you should now be able to see, valuing is a difficult job that necessitates a significant education and ongoing training and a solid awareness of the jewellery industry and its networks.
You are getting the benefit of years of collected experience from a skilled professional who is qualified to appropriately value jewellery for a particular purpose when you consult a valuer.
When you consult a valuer, you pay for much more than a piece of paper with a signature. Whether for insurance replacement, auction, the settlement of an estate, or the dissolution of a marriage, valuers provide an essential service that ultimately safeguards the consumer.