Who can call himself a jewelry appraiser?

May 12th, 2011 by James L. Sweaney, CGA, FGA. GG

This headline caught my eye in a recent email— the answer to this trick question is anyone!

A newsletter by an insurance industry organization highlighted the fact that there are no federal or other governmental bodies setting qualifications for who may be a jeweler or a jewelry appraiser. A study by a related group also found that most jewelry retailers are not Graduate Gemologists. Their study of appraisals received by insurance companies revealed that only 21% of them were prepared by Graduate Gemologists. Many of the appraisals they examined were lacking in such basic information as the weight of the piece and the weight of the gems–important components of value given today’s rising market for precious metals and fine gemstones.

Qualifications-3a_275Two main problems arise from poor quality appraisals, the first being the lack of correct factual information. Many appraisals are written for insurance purposes. The buyer needs to know exactly what he owns in case of loss and the insurer needs to know his costs to replace the item– the valuation is actually less important than details of the description of the item.

The goal of the insurer is to make the insured whole, i.e. to restore them to the state they were in before the loss. Most insurers replace the loss in kind— with the most similar item available. If the insurer doesn’t know all the salient facts, how can he be expected to replace the item in kind? How can the insured be assured he is getting a fair replacement?

Appraisals for insurance are by definition estimates by the appraiser of the expected cost to replace the item in kind from a similar source. For example, if you purchased your ring new from Tiffany, the appraisal should be based on the current replacement cost for the most similar ring, purchased new at Tiffany. Since they are estimates, most insurance appraisals should be updated every few years to current values.

In most cases, the correct document that should be given by the seller of a piece of jewelry is not an appraisal at all since the seller knows exactly what he has sold the item for. This document is a statement of replacement cost, which should include at the very least, the weight of the item, type and quality of precious metal, weight and measurements of gems, identity and grading of the gems, and the actual price paid by the customer.

The second issue is the problem of ethics. Representing yourself as an expert when you have no skills or qualifications could be considered fraud. Would you tolerate being operated on by a doctor who had not been through medical school?

Worse yet, consumers may be duped by what I call the “feel good appraisal” where the seller greatly exaggerates the value over the actual price paid. Such “appraisals” are little more than sales devices to reassure the customer that he got a “great deal.” Claims that the item appraises for double the selling price are commonplace, but self-serving and generally false. Of course, the buyer participates in this deception by gullibly going along, parking his common sense at the door.

The answer for the jewelry consumer and the insurance companies is to make sure any document attesting to value has specific detail about the identity of gems, measurements, weight, and quality of the item. Also, look at the credentials of the jeweler/appraiser such as memberships in professional organizations and diplomas, such as Graduate Gemologist. Finally, consider the reputation of the jeweler within the community.

Graduate Gemologist (GG) is a proprietary title and diploma granted  by the Gemological Institute of America (GIA) to those persons who successfully complete their gemology program. After completing the courses for diamonds and colored stones, the gemology student must learn the techniques of gem identification, pass the rigorous 4 hour written GG diploma exam and identify 20 stones with 100% accuracy! Only those persons who have the GIA diploma may use the title Graduate Gemologist.

Graduate Gemologist is like the jewelry industry’s Master’s degree, and is the best assurance that the jeweler/appraiser has a solid gemological foundation on which to base appraisals or valuations. Even better is a GG with additional gemological training and diplomas plus years of experience in the jewelry trade–like yours truly!

The American Gem Society (AGS) requires its member jewelers to continue their gemological education, proven by annual testing, and to subscribe to a strict code of ethics and fair business practices. The AGS has additional levels of training beyond the GG, granting diplomas for Certified Gemologist and Certified Gemologist Appraiser. The AGS also carefully screens jewelers prior to admission into the organization.

The American Gem Trade Association (AGTA) requires it’s members to disclose all the facts about the gems they sell. Other professional appraisal organizations that offer specialized jewelry appraisal training include the National Association of Jewelry Appraisers (NAJA) and  the American Society of Appraisers (ASA).

Because the jewelry industry depends on the trust of its clientele to be able to conduct business, the respected professional organizations the GIA, AGS, AGTA, & NAJA have the mission of consumer protection and education–so look for the jeweler/appraiser who has paid his dues by educating himself and developing his skills, and who has proven himself within his community as being honest and knowledgeable.

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