Why Jewellery Valuations Are Worthless

A recent editorial in Jeweller Magazine calls for the banning of jewellery valuations on new jewellery, arguing that a piece of jewellery bought for $700 one day can then be mysteriously valued at $4000 the next day. The article then goes on to say that jewellery is the only everyday consumer product that valuations exist for, since TVs or furniture don’t have valuations.

Up until a few years ago, we had every loose diamond and piece of jewellery independently valued before it was given to the customer. Customers loved it. They may have bought an engagement ring for $5,000 and they’d receive a valuation for $10,000 - somehow thinking that by making a purchase with us, they had doubled their money. Off to the insurance company they then went, who were more than happy to insure the piece for the amount stated on the valuation.

This was simply wrong. However, nowadays we provide in-house valuations which list basic details along with a photo. The value stated on these valuations is what the customer actually paid for it. If after a few years, the customer wants another valuation, we will be happy to provide one based on what we would sell a similar piece for. This method leads to lower insurance premiums and removes any false sense of “buying something at half-price” or “doubling your money instantly”.

Every week or so, we receive a phone call or email from someone wanting the sell their diamond ring. Almost always, there is a valuation stating that the piece is valued at X amount of dollars. Sadly enough, sometimes the seller says something like “It’s valued at $7000, but I am willing to sell it at $6000″. Our standard response to such phone calls or emails is to tell the seller that the valuation that they have is an insurance replacement valuation, and therefore the value bears no resemblance to what the cash value really is.

Unfortunately, the vast majority of people do not understand what a valuation is really for and why there are almost always inflated values stated on them.

The truth is that valuations exist to benefit jewellers, insurance companies and the valuers themselves. Jewellers benefit from having their goods valued well beyond the selling price, insurance companies benefit higher premiums and valuers benefit from fees collected from what is usually a ten minute job.
Now I have no problem with professional valuers themselves. Most I have met are very experienced in the gemmological field, have the necessary tools to assess all kinds of gemstones and provide good advice to their private clients. Unfortunately, too many are merely jewellery salespeople, ill-equipped, as shown below.

Valuer

What is needed is for the a valuation to be more of an appraisal - that is a detailed document of a piece of jewellery describing the piece, its workmanship and its gemstones. If a value is required, this should be obtained by retailers or wholesalers - not just by looking up Bolton’s Blue Book and adding an abitrary markup.

At the end of the day, the whole concept of jewellery valuations is ludicrous - it may take 15 years to double your money if you put your cash into a bank, yet somehow, with jewellery valuations, you can double your money simply by buying a piece of jewellery.

7 Responses to “Why Jewellery Valuations Are Worthless”

  1. Martin @ Shop 4 Rings Says:

    I agree that the valuations are worthless - just a way of trying to get more from the insurance companies if the worst happens.

    Nice article - thanks.

  2. cindy Says:

    hi could you help me my daughter and future son in law brought a ring from angus cootes belmont i think it took 2months for them to get it she sent me a pic of the ring and the workmanship its good she had enough of the dramas but i think she will reget it in years to come is there anything they can do about they pick it up on sat the square part isnt even or straight. thanks for taking the time to read this cheers cindy

  3. Leo Says:

    I have read your article titled “Why Jewellery Valuations Are Worthless”.

    I also understand as a gemologist working in Burma, Thailand and Africa for 20 yrs, that diamond is a worthless investment and a fools purchase.

    WHY? …Because as you aware diamond is common and found everywhere, unlike colored stones such as ruby, sapphire and emerald which are very rare indeed.

    The price of diamond has been controlled and manipulated by De.Beers since 1888 by monopolizing the the industry. If diamond was traded in the free market like rare colored gemstones are, diamond would sell at their true price of around $20 -$30 per carat.

    Diamond is NOT a girls best friend, it’s a fools purchase, no matter who does the valuation.

  4. Chii Says:

    I have lately become interested in evaluating my jewllery I was given by my ex boyfriend,it was all designed by ourselves .
    But I add and stress this fact, I have nothing and lost everything from two failed relationships,I give to my kids everything and struggle daily, I love the jewellery I feel it brings value and I’m proud to wear them yet I need stability and that’s why I want to evaluate them.

  5. Michael Says:

    Reading your comments re valuation are worthless , I am a little mixed up
    1/ A valuation will guarantee to the purchaser exactly what the item is, as most values I know are Registered and also Gemmologists
    2/ If you In fact buy an item wholesale or direct from a manufacturer there must be a so called ‘Earn’ in acquiring it
    3/ Usually the item is valued for insurance purposes and updated every 2 years to keep up with inflation and or a volatile $
    4/ I am a little surprised that you feel an item valued is a waste of time
    5/ Personnally When buying a diamond or any gemstone I would demand that ithe diamond have a G.I.A certified and laser Inscribed and accompanied with a Valuation for insurance purposes

  6. Gold Buyers Says:

    Nice article and review about Jewellery Valuations, very interesting and it’s the truth. Nice post.

  7. chris keeley Says:

    selling diamond rings can be difficult for the seller as insurance valuations are far higher than the actual value of the diamond ring that is why you should get a valuation from a diamond broker.

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