An estimate to replace, or replacement cost estimate, is probably the most common form of appraisal, though it is not as thoroughly researched or objective as a fair market value appraisal or an insurance appraisal.
This appraisal accompanies an item of jewelry when it is purchased and is usually prepared by the jeweler or retailer of the item at no additional cost. At its best, this document bears an accurate description of the item purchased, with at least one good
photograph, and a value that reflects what it would cost to replace the item with a comparable one from the same retailer.
For many consumers, the replacement cost estimate is adequate for their insurance provider, especially if the description part of the document is accurate. However, these documents can be misleading, as the value given is often more than the amount that the purchaser paid for the item.
Sometimes replacement cost estimates are used as sales tools to justify the prices that sellers are asking for their goods, or to make their usual prices seem like a better deal than they are. As we know, a reasonable value is based on what is actually paid or what would be paid. If you purchased an item for a given price, shouldn’t it be possible to replace it for a similar price? In most circumstances, the answer is yes. The estimate to replace should be very close to the price you paid!
As you can see, the word appraisal can mean many things in different circumstances within the jewelry industry. Appraisals are time- and location-sensitive, and valuations will change over time and in different areas.
If you are looking for an appraisal of your jewelry, think first about what kind of evaluation you need and which professional will do the best job for you.
About the Author
C.M. St. John is a graduate gemologist (GIA) and appraiser at Provident Loan Society. Gems and jewelry are a lifelong interest, and much easier to collect than architecture, which is her other great passion.