[Jewelry making - Article 00107] - Re: [Orchid] How Appraisals Work

[The Doctor]

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>         We have two types of document. "Appraisals" and "Statements of
>     Retail Replacement Cost" We use the former for items that we have
>     not sold that we are asked to value. The second is used for items
>     that we either made or sold and reflects the actual price
>     paid...The two are identical except for that we weigh, measure, use
>     gia and agl terminology and so forth. 

Richard,

    Yes, that's basically how our store operates as well with the same
    situations. However, we also operate a gem testing lab (no, we don't
    do SIMS or other multimillion dollar equipment type testing, just
    standard gemological instruments) that has no interest in customers'
    goods when brought in for appraisal. Basically, the store will do a
    valuation, or hypothetical retail replacement value just as you
    describe on goods we sell, but the testing lab does much more. 

    The lab provides Disclosure and Limiting Conditions statements on
    all valuations and appraisals, to include average retail value
    (ARV), primarily for insurance replacement, fair market value (FMV),
    primarily for divorce liquidation in addition to wholesale
    valuations and gem identification and grading reports to the trade. 

    Typically, all of these documents list all components of every item
    for appraisal or valuation, including gemstone measurements,
    estimated weights, grades, etc. along with the complete description
    of each article, accompanied by photos of the articles. They also
    list the Disclosure and Limiting Conditions that describe the
    purpose of the appraisal or valuation (FMV, ARV, etc.), and that the
    appraiser has no interest in buying or selling the item(s). Also
    included is the appraiser's curriculum vitae, including education,
    trade affiliations, eetc. The retail store does not get involved
    with appraising its own merchandise, as that would be a conflict of
    interest, nor does the gem lab buy or sell merchandise for the same
    reason. So yes, I agree with Eli Rosen's advice on the retail store
    providing the two types of documents you mentioned for the two types
    of goods. 

>          On the subject of Insurance companies: my belief is that the
>     insurance industry could wipe out sleezy apparaisal practices in a
>     heartbeat simply by issuing uniform guidelines regarding who can
>     do an appraisal and what that form should contain. They don't do it
>     because they make a fortune on overinsured items. 

    I agree completely. And I'll say it many more times in the years to
    come: Jewelry customers, whether buying, selling or seeking
    appraisal must find a reputable store, person or group. The
    appraisal business isn't the only one with sleazy practices, the gem
    and jewelry business is loaded with them, too. Talk to every person
    in every store you can. Ask how long they've been in the trade. How
    long has their jeweler been in the trade? How long have you been
    doing appraisals? What are your credentials? Can you give me
    references? What are your trade affiliations? All of these
    questions, answered honestly will protect everyone from dishonest
    practitioners. 

James S. Duncan, G.G.
James in SoFl

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