Appraisals are important documents that describe in great detail a specific item, and usually list the value of the item.  There are different values an appraisal might list, however, these are the most common: Fair Market Value and Retail Value.  Appraisers will typically list Retail Value, because the majority of the time an appraisal is used for insurance purposes.  In certain circumstances, the appraisal will list Fair Market Value, which would provide an amount researched from secondary marketplaces.

Appraisals matter because they establish ownership, authenticity, quality, and value.  Many people come into our store having no idea how much their ring/jewellery/watch is worth, and for insurance purposes, this dollar value is important.  If you are insuring an item which gets lost or stolen, you obviously would like to either replace it or get the equivalent value of that item back.  Alternatively, as jewellery gets passed from one generation to the next, appraisals can help in figuring out who will inherit what.

Some jewellery stores (as an example) will advertise rings “appraised at $10,000″ and then sell them for $3,000.  If an item routinely sells for $3,000 but is appraised at $10,000, then the argument would be that the ring is only worth $3,000.  This is not to say you cannot get good deals, but just be aware that if you are insuring this “$10,000″ ring, you will pay higher premiums. Should a day come where you need to replace this ring, the insurance company will replace what you had; if they can find that ring for $3,000, then that is what you will get.

I have also had the question, “this ring in your showcase is $5,000, what are you going to appraise it for?”  The underlying thought or idea here is that it will be appraised higher than it’s retail price (similar to the situation above).  Here at Independent Jewellers, our appraisals reflect the retail value of an item on new purchases; so if you find a ring that retails for $5,000 in our showcase, the appraisal would show its value to be $5,000 (regardless of any discount/sale).  We do not inflate the value of our merchandise.

Lastly, understand that appraisals are not accurate forever.  Think of an appraisal as a snapshot in time, where at the time of appraisal, this is what your item is worth.  Everyone knows (or should know) that the price of gold fluctuates; and most people are aware that the same is true for diamonds and other gemstones.  We understand that you can’t keep bringing in your items every year for an update (although you can if you want), but bringing the item in every 10 years is probably a bad idea.  If you have a diamond ring from 10 years ago and you have it scheduled at $10,000 with your insurance company, but the diamond today is now worth $20,000, the insurance company will base their reimbursement on the $10,000 you had it scheduled for.  Talk to your insurance broker and make sure you are aware of how the insurance process works, and the specifics of your coverage.

To learn more about Appraisals and what to look for in a qualified Appraiser I highly recommend visiting the Canadian Jewellers Association’s website.