Thursday, August 26, 2010
Appraisals for jewelry serve to inflate the value placed on an item, (often up to 300%), for several reasons.
1. An appraisal ensures the retailer a significant profit when a lost insured item is replaced at full retail price with no “50% off sale”
2. The insurance industry profits from appraisals because the items value is so inflated that the consumer typically takes out extra insurance to cover the inflated cost of replacement. The inflated value may compel the consumer into getting extra insurance because it’s “worth so much”! Ask yourself, worth how much and to whom?
3. Appraisals lull the consumer into feeling they received a great deal from their retailer because the appraised value may be two or three times the retail amount paid. Appraisals may lead the consumer to place too much value on their items, and as a result they may pay hundreds of dollars in insurance riders. Your beautiful bracelet appraised at $1000 may only contain $150 worth of gold!
Something is only worth what someone else will pay for it.
The world’s precious metals markets determine the gold price based on supply and demand, definitely not on appraisals.
If you still believe that appraisals best serve the consumer you might take your appraised jewelry into the retailer that supplied it and ask how much they would buy the item for, right now, in cash. Think it will be the appraised value? Think again…
Jewelry has an artistic appeal and may have an emotional element tied to it which may increase the value of the thing. Once the artistic appeal becomes unappealing and the emotional element has faded… it’s just gold.
There are additional costs besides precious metal in making jewelry, such as hand labour and manufacturing, but just like electronics and used cars the retail buyer pays the initial depreciation.
Precious metals are bought and sold on many different open and free markets around the world.
There are never 50% off sales in the precious metals markets.
KMG GOLD buys precious metals at the best flat percentage rate based on the world market price!