August 10, 2015
Learn the facts jewelry stores should know before offering jewelry appraisal services to customers. Offering a professional jewelry appraisal service helps meet customers’ needs and can enhance a jewelry store’s prestige. But incomplete, ambiguous, or unprofessional jewelry appraisals can leave the appraiser and the store open to charges of negligence and possible litigation. It is critical that a jeweler issue appraisals only after receiving the proper training. As important, every jewelry sales professional must have a basic knowledge of appraisals and their appropriate use so they can better answer customers’ questions.

What is a Jewelry Appraisal?

An appraisal is a document that describes an item, assesses its relative quality and assigns a value to it. Descriptions usually cover the visible, measurable and analyzable facts about the item (weight, materials, markings). Most jewelry appraisals also describe subjective features such as gemstone quality, relative rarity and overall quality of manufacture. 

Who Can Appraise Jewelry?

There are currently no U.S. laws or regulations that set educational standards or require certifications to become a jewelry appraiser. You should only perform those appraisals for which you have received adequate and specialized jewelry appraisal training. Years of jewelry experience alone do not provide you with the knowledge and skills needed to write appraisals. 

Insurance-Related Jewelry Appraisals

The majority of jewelry appraisals done today are for insurance replacement (retail replacement) purposes. The point of jewelry insurance is to return the value of the item to the customer. Therefore, insurance appraisals should reflect the realistic cost of replacing the jewelry item in a jewelry store that regularly sells the type of item being appraised. 

Most experienced jewelers with basic formal appraisal training are qualified to write insurance replacement appraisals on the new merchandise they sell in their stores. They may also be qualified to write insurance appraisals on new jewelry they do not sell, if the jewelry is similar to the products in their store. Appraisals done on other types of jewelry or for other purposes require more advanced appraisal training. 

Some insurance companies have arrangements with jewelers for insurance replacement business. When a consumer has a loss, their insurance company requires that they go to a specific jeweler for a replacement. The jeweler is then paid an amount from the insurance company that is less than retail, and perhaps less than the appraisal, but the customer gets a piece comparable to the one they lost, and the jeweler gets the business from the insurance referral. 

The FTC Guidelines for Jewelry Appraisals

Intentionally over-valuing items on appraisals is considered illegal under Federal Trade Commission (FTC) guidelines and unethical by all nationally recognized appraisal organizations. The value assigned to the piece of jewelry should not be inflated beyond what is considered a fair retail selling price. 

What Effects the Appraised Value?

Jewelry appraisals should be updated periodically to make sure they have adequate insurance coverage.

Unusual circumstances, such as sharp increases in availability and price for certain jewelry materials, should also be taken into account when appraising an item.

In addition to the cost to replace or repair the jewelry, the value stated in an insurance appraisal should include enough to pay the appraiser for their services. The appraiser must also remember to add taxes, which can either be listed separately from, or included in, the value on the appraisal. 

Other Types of Jewelry Appraisals 


Fair market value appraisals

 Reflect an actual selling price between a willing buyer and seller, when neither is compelled by time or need to buy or sell in the item’s most common market. Fair market value must represent the item’s value in its current (used) condition. Fair market value is generally required for charitable donations and estate appraisals. Fair market values may run lower than retail replacement values, because replacement values often reflect the cost to replace a used item with a new equivalent.

Immediate liquidation value appraisals 

Usually reflect low values because of the situations that create their need. Divorce settlements and some types of estate liquidations may require this type of appraisal, depending upon the jurisdiction where the scenario takes place. Less common types of appraisals include probate and loan collateral appraisals.

Jewelers Mutual Insurance Company and Geolat and Associates, Inc.  provided some information for this article. 


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