Diamond appraisals can be tricky business. First of all, just about anyone can call themselves an independent jewelry appraiser. There is no law that requires appraisers to be licensed in the same way that lawyers and doctors are.
Grant it, there are associations, schools and institutes that jewelers can attend to become qualified to appraise diamonds, but even then, an appraiser’s “say so” doesn’t necessarily make it so.
I’ve been reading where some jewelry appraisers are secretly on the jewelers’ payroll in exchange for undervaluing competing items (which could ultimately result in lost sales).
Second, appraisals are not the same as diamond grading certificates or reports. I have seen undercover investigative reports done at mall jewelry stores, where employees show a reporter their “certificates” containing appraised values of various stones.
An employee would say something like; “We are selling you this engagement ring for $900, but you can see from this diamond certificate that the stone was valued at $2,200.”
What deal, right? Well, ding ding ding – red flag!
For one, reputable diamond reports, such as those by the GIA, AGS, and GCAL, do not offer appraisal values, but rather provide their independent assessments of the stones’ clarity, cut, carat, and color. The price of making a report may be in the report, but not in a figure that indicates how much a diamond is worth.
Next thing is: don’t get sucked into the hype of an engagement ring “blowout sale.” If a particular diamond appraisal is one that a jeweler can invest in, you can bet your bottom dollar that the jeweler would sell the stone for $2,200 and not $900.
Many jewelers can afford to offer big sales because they are initially selling engagement rings at 200-300% above wholesale prices. And if you inspect those cheap engagement rings, don’t be surprised to find that they are poorly cut or have poor clarity.
And if you decide to buy that “reduced price jewelry”, good luck returning it and getting your money back. They may tell you that there are no refunds on sale items.
When shopping for an engagement ring online, go with highly reputable retailers like James Allen or Amazon. They offer a wide range of quality parts to fit any budget, plus iron-clad 100% money-back guarantees in case you’re not happy with your purchase.
Profile of an accredited jewelry appraiser
Simply put, you want advice from people who are trained to appraise jewelry and have professional experience in the area. Review this checklist to see if your potential appraiser meets the requirements for an accredited appraiser.
1. As a minimum, have your diamond appraised by a Graduate Gemologist (“GG”) or comparable member of the Gemological Institute of Great Britain (“FGA”). The ‘GG’ is the most prestigious credential in the jewelry industry.
Professionals with these qualifications underwent rigorous approaches to compare, grade, identify, buy, and sell stones.
Note, however, that neither “G.Gs” nor “FGAs” were taught to evaluate stones. Ideally, a jewelry appraiser should have the best gemological credentials, as well as additional training and certification from an accredited appraisal organization.
2. Does the person doing the appraisal have references? Ask for references. An experienced professional appraiser should be able to give you references from places like banks and trust companies.
3. Have your diamond appraisal done by an independent third party, not someone associated with a jewelry store. When reviews are issued in-store, they are usually done in order to get customers to buy the merchandise from that particular store.
What you want is someone who doesn’t give a damn whether you buy the ring or not, will appraise an engagement ring. The typical store clerk who enthusiastically gives you his “expert opinion” is neither independent nor professionally qualified to give an assessment. Therefore, take the store clerk or store valuation with two “grains of salt.”
Some popular independent appraisers include the Association of Accredited Gemologists, the American Society of Appraisers, and the National Society of Jewelry Appraisers.
Anatomy of a Diamond Appraisal
An engagement ring is something you’d want to treasure, but if you or your partner lose your ring, then you’ll want to have some sort of fallback position: insurance.
Some people think that if you buy a ring for $2,000 and insure it for $4,000, if the ring is lost, the insurance company will just write a check for the $4,000. Well, we all wish it were that simple, right? So?
An insurance company would want to see the valuation of your ring to help them come up with a payment figure. But if the appraisal doesn’t contain an explicit and precise description of the ring, be prepared for the probability of getting a payout much less than the sum insured.
Because when the insurer goes to a jeweler and says that they normally sell this ring for $2000, how much will they sell it to me? if the jeweler says $1000 or $1200 then that is what she will get.
But if the valuation contains the relevant information and is reliable, then you have a better chance of getting a suitable in-kind replacement. Why “in kind”?
Because insurance contracts often limit cash settlements. Also, since insurance companies have volume buying power and purchase agreements with their providers, they can get appropriate replacements for much less than consumers can get.
Since there are different types of jewelry insurance policies, I advise you to speak with your agent or broker for more details on your options and settlement practices.
At a minimum, a thorough evaluation of the jewelry will have the following:
A photo of the jewelry.
Style number, diamond mark, shape, measurements, and weight.
The 4Cs of Stone: Color, Clarity, Cut, and Carat Weight.
The laboratory that issued the diamond grading report and the report number.
The type of construction, craftsmanship and design.
The date, the name and signature of the appraiser, the information in the addendum and the rating page.
The value and the object and function of the appraisal. For example, was the diamond appraised at market value for tax purposes or retail value for insurance purposes?
Transparency in jewelry valuation
A credentialed appraiser is one thing, but the appraisal process itself should be one that takes place in front of you. So, a transparent appraiser:
Do not ask for the diamond to be removed from the setting. You want to protect yourself from an appraiser exchanging your stone for a lower quality one. Although, there is greater precision in valuing a loose stone than one still in a setting.
Weigh a loose stone in front of you before the evaluation begins and after the process is complete.
Clean the piece in front of you
You are only given ranges in clarity, color, and color if the stone is appraised while mounted. According to leading diamond expert Fred Cuellar, the highest grade for a mounted diamond is VS1 clarity and G color.
I won’t give you an exact figure for the value of a piece of jewelry, but rather give you a range.
He will not ask or offer to buy your jewelry or sell you one of his own.
We will not charge you a fee based on the value of our jewelry. This should help remove the temptation to overprice the merchandise.
You want to know if you want the discharge, wholesale, retail (fair market), or higher value of your merchandise.
While appraisers aren’t gods, ideally you’ll only want to deal with an appraiser who fully stands behind their work. That is, there will be no disclaimer in the appraisal that says that the appraiser will not be responsible for any action taken with the appraisal.
If an appraiser does not stand behind their work, then there is little point in having the appraisal done in the first place.