A well-known national jewelry store chain is running TV ads-they say that the stuff they sell will be worth twice what they sell it for…if you have it appraised.
Is this false advertising? As I understand it, and appraisal is a independent assessment of an item, for insurance or sales purposes. So, if what they are saying is true, they sell for half price. How can this be?
Jewelry markups are very high. 100-300% is not unusual.
Thus if something wholesales for $100, most jewelers would sell it for $300 or more. You can sell it for $150, make a $50 profit, and an assessor assuming a standard markup would agree it was worth $300 at retail.
It’s “guaranteed to appraise for double” because they give you an appraisal certificate when you buy it that says it’s appraised for twice what you paid.
Yeah, they appraise it themselves. Which doesn’t mean anything, of course.
And if you ask me nothing has any value whatsoever until a seller and a buyer agrees on a price.
Insurance appraisals are often much higher than what you might have paid for an item, because the insurers work on the principal that you might not easily be able to replace the item, so might need to pay over the odds to have a replacement made or to track it down in an expensive shop.
See Antiques Roadshow, where they will typically say 'your grandmother’s sideboard could make £10,000 at auction, and I suggest an insurance value of £15,000.
A high appraisal doesn’t mean you would ever be able to sell it for that.
Something I learned as I bought jewelry for my ex. The apprised value isn’t what you pay. You usually pay something like 60-70% of the appraised value. All they have to do is run a sale to knock everything down to 50%.
It’s very very common to look at wedding rings and have them say “This one is appraised at $6000, but we’re selling it at $4299.95”
So, now, maybe you have a discount jeweler that sell the same ring for $3000 and the appraised value is double.