David R. Boggess? Using appraisers who buy/sell jewelry?

Andrew Furman
Continental Diamond
Minneapolis, Minnesota

David S. Atlas

GG(GIA), ASG, Sr. Mbr. NAJA

www.datlas.com

I have been a jewelry appraiser for over 25 years, and the first 10 years I did not buy or sell jewelry.  After I began to buy and sell jewelry, I realized that my appraisals became much more accurate.  One of the things that consumers don't realize is that if a jewelry appraiser does not buy or sell, they have no direct connection to market prices.  Appraisers that don’t buy and sell use “pricing theories” and market research to determine the value of the jewelry they appraise since they have never actually bought hundreds of diamonds from wholesalers or made every kind of jewelry dozens of times that they appraise.  When you have a “vested financial interest” in knowing exactly what something cost and you are buying and selling that commodity on a daily basis is when you really learn its value.  There is no question that someone who is actually in the business of buying and selling jewelry is in a much better position to determine the value of jewelry than someone who does not. 

Another issue that consumers don’t think about is that many “independent” jewelry appraisers have a bias themselves.  There is a lot of financial pressure for jewelry appraisers to “conform” to the industry.  The higher an appraiser appraises; the more business he or she is likely to get from jewelry stores.  If you are an appraiser and you always appraise everything a little higher than you know it’s really worth and you don’t point out too many “problems”, you will always have happy customers.  Both the individual you just appraised the jewelry for and the jewelry store where they purchased it.  Consumers like hearing they got a good deal, so this strategy works perfectly.  There is a joke in the jewelry appraisal business that goes something like this; “Who’s the best jewelry appraiser in the eyes of the consumer and the local jewelry stores, the one that appraised the item for the highest value”.  No one likes to talk about it, but its standard operating procedure for many “independent” appraisers.  If an appraiser starts to actually tell his clients the “real average” selling price of the item as opposed the inflated value, or points out that one of the side diamonds is chipped, etc., then the store that sold it is going to get upset, and that store will likely never refer business to that “independent” appraiser.  Over 50% of an independent jewelry appraiser’s business comes from referrals or direct business with jewelry stores, and that is an obvious conflict of interest.  It is in the “independent” appraiser’s best interest to always appraise high and not point out problems in the items they appraise.

Basically there is a bias in both directions.  Jewelry appraisers that buy and sell have a possible bias if they allow their greediness to get in the way of telling the truth.  “Independent” appraisers (non-buying and selling appraisers) are potentially biased because their livelihood is at stake if they criticize the jewelry they appraise or if they don’t appraise high enough to keep their stores happy.

I pride myself on telling everything.  If the client gets a fair deal, I tell them they did, even if I could have sold it for less.  And on top of that, if the client asks me what I would have sold it for, I don’t tell them.  If the client wants to make another appointment to come in and see me as a “jewelry seller” that is fine, but not during an appointment that is set up for appraising something they have purchased somewhere else.  I am not willing to risk my reputation, my business, or legal action over one piece of jewelry.  I work out of an office that has no jewelry on display or photographs of jewelry anywhere.  My office looks more like a laboratory.  All my jewelry is kept in a locked safe.  Even the people that come to my office for the sole purpose of buying jewelry from me often ask if I even have any jewelry to sell.  So, the environment in my office is not condusive to selling jewelry.

As far as having a concern about an appraiser’s bias, in my opinion that has to be handled on a case by case basis regardless of whether the appraiser buys or sells jewelry.  If the appraiser is an honest person, then there will be no bias.  The real problem for the consumer is determining if an appraiser is trustworthy and if he/she will do their job correctly without any bias.  I think my track record of working for nearly every single top tier jewelry retailer in this country speaks for itself.  My office walls are lined with letters of recommendation from top jewelry retailers.  Companies like Tiffany & Co. Bvlgari, Nordstrom, Neiman Marcus take their business very seriously.  15 years after I began to sell jewelry and buy jewelry from the public, these top jewelry retailers still refer me business.  If major companies such as these that send me their clients are not worried about me having a “bias” then it would seem to me that consumers can be confident that I have no “bias”, but more importantly I’m probably very good at my job.  The life-long personal business strategy of being honest almost to a fault and always striving to be the best Gemologist I can be has always worked me as evidenced by a client list that few if any jewelry appraisers in this country can match.

- David Boggess