Diamond Appraisal

The appraised price as a marketing tool

 When buying a diamond, beware of a company that uses the Diamond Appraisal as a marketing tool to make you think you are getting a great deal.

If you have ever talked with someone who has bought a diamond, you have probably heard this story, "The diamond appraised for $5000 but I got it for $3200."

Many big chain retail stores include the appraised price on their certificates. Then they sell the diamond for less. This makes you think you are getting a great deal.

How did the store come up with this appraisal and why is the store selling the diamond for less than the appraised value? If you ask about the methods for determining the value of the diamond, a clerk will probably tell you that the appraisal is based on the certificate or that the lab did the appraising. It is in both parties interest to have a high appraisal value.

If the appraised value is really what the diamond is worth, then the store would keep that number a closely guarded secret and try to sell the diamond for as much as possible.

Have you noticed price tags in jewelry stores that are just a jumble of numbers and letters. The sales person knows from the code exactly what the value of the diamond is. The price you hear is the price that the sales person thinks you will pay. One code is known as the "New York City" code. "N" stands for 0, "e" for 1, "w" for 2 and so on.

After you get the diamond you should have it appraised independently. The appraiser will be able to tell if the diamond is really the one you paid for and if it matches the certificate. If you can't find someone locally, I would recommend Accredited Gem Appraisers run by David Atlas. He is well respected and has tremendous experience.

Dateline on NBC recently did a segment on the diamond appraisal issue and discovered some very interesting things. Click here to read the report.

My Advice: Ignore the appraisal all together and just comparison shop.

 What about insuring the diamond?

 You want to insure the diamond for what it will cost to replace. If you bought a diamond for $7000 but it appraises for $11,000 don't insure it for $11,000 dollars because it will cost you more in premiums. If you lost the diamond, the insurance company would either replace it for you or give you a check for $7,000 because that is what their research would suggest you could replace it for. If you are a smart shopper and buy from my recommended stores, you will get a diamond that is very close to what it would cost to replace.