Retail vs. Online Price?

[galatie]

Hi everyone, I have a quick question. So we purchased our engagement ring from whiteflash for 30K. The ring came with a slip from Whiteflash, putting the appraisal value of the ring at $48K. If that's the case, why don't whiteflash and other online vendors sell their diamonds for close to retail price? I know that these internet companies have lower overhead in general, and can sell at a lower price and still make a profit, but it seems like they sell for substantially lower than what one would see at a jewelry store? Can anyone explain?

 

[Gypsy]

Oh God.

Don't tell me Whiteflash is doing that shady inflated appraisal thing now?

OP, you are right. Your appraisal should reflect your purchase price but shouldn't include any sale or promotions you qualified for. Because you may not get those again. AT most, a 15% increase, to account for prices of metals and diamonds which are on the rise can be added.

REPUTABLE jewelers (and I would have thought WF one, before this disturbing post) don't do the 'inflated' feel good appraisal game. A 40% appraisal inflation is just robbery. All that does is raise your insurance rates to no purpose.

Shame on you WF if that's what you are doing.

 

[Amys Bling]

Hmm interesting

 

[lknvrb4]

I had the same thing happen with GOG. I purchased my pear from them and I knew it was a deal because it was an estate pear and they had it listed for the wrong price but Jonathon let me have it for the price listed. It came to me with an appraisal of $16k. I have looked at comparison pears and I could replace it from $7-10k. Just to meantion I paid nowhere near either of those prices. I have been bad and not gotten it covered for insurance because my premium would be over $200 a year, seems crazy.

 

[LibbyLA]

You do not have to insure for the appraised value. I have two appraisals, one for over $17K and one for over $18K, but I capped my insurance at $15K (because $15,001 is where the rate per hundred increases from $1.10 to $1.30 or $1.40, don't remember which, but you pay the extra on the first $15K, too, not just on the amount above $15K). There's no way I could replace my ring for what I paid for it because the least expensive comparable diamonds are over 25% more than what I paid for mine, but I could replace it for $15K or a little less.

I did have to be quite firm with the rep who was working with me and state that I understood that JM would pay no more than $15K to replace the ring, even if it cost more to do so.

I provided a copy of both appraisals and the invoice.

liz

 

[galatie]

Hmmm, we paid $30,020 for our ring, but that's with approximately $1000 that was discounted through pricescope, wiring, and new register discounts. The appraisal value that they supplied with our certificate is $46,000, which seemed to be odd to us, being that it was sold to us for so much cheaper. I will definitely have the ring appraised with what we paid for. Guess this shows how little we know about diamonds, we just thought the price was alot cheaper online vs buying at a jewelry store, never suspected anything that might be a bit disconcerning with whiteflash, but maybe not! Didn't mean to open up a can of worms here, but at the end of the day, am very happy with the ring, so guess that's all that matters?

 

[elliemay]

You do not have to insure for the appraised value.

liz

This is really good to know -- had to get a UK appraisal for my e-ring and it came back at nearly £10,000! I love my ring and everything, but there's NO WAY it's worth that much. I

 

[LibbyLA]

galatie,

If you went to a higher-end local jeweler, your ring might cost close to what the appraisal is. I'm betting that most of us who have bought online would do the same for a replacement, but there are lots of people who would only buy retail. You're not going to be able to insure for more than the appraisal, so the inflated appraisal (for an online purchase) does allow you do insure for what it would cost to buy locally.

liz

 

[Texas Leaguer]

Hello All,
This is a fairly regular topic of discussion so I thought I would give some background and also ask for your feedback. Whiteflash pays for a document that we refer to as a Letter of Verification http://www.whiteflash.com/about-diamonds/diamond-education/free-verification.htm or "LOV" with every order containing a certified diamond. The document is prepared by an independent graduate gemologist appraiser. The purpose of bearing this expense and providing this document is to enable our customers who wish to insure their jewelry to be able to do so conveniently and without incurring additional expense.

The valuations placed on the jewelry are prepared by the independent appraiser using whatever formulas or research tools he uses. Whiteflash does not dictate or influence any valuations. It is noteworthy that there is a statement on the LOV that reads "Values quoted are comparable to retail values typical of 'High-end, Guild' jewelry stores". It is also indicated that this document is not meant to take the place of a full professional appraisal, and many Whiteflash customers opt to have such services performed after they receive their merchandise. Also important to understand is that the LOV is prepared after the sale and the valuation is in no way part of the sales process.

Jewelry valuations are an inexact science with a significant degree of subjectivity involved. The purpose of the evaluation is to verify the merchandise and attach a valuation that provides ample protection for an insured. That is, in the case of a loss that the valuation is sufficient to enable replacement of like kind and quality in a quick and convenient manner for the insured. The limits of most insurance policies are determined by the amount on the appraisal. Therefore, if the evaluation is lower than the cost to replace, the customer may not be able to get whole, or may have trouble doing so without extraordinary effort.

So it is to a certain extent beneficial to the insured if the valuation is on the high side of the market. It is also true that premiums are predicated upon the valuation and the higher the valuation the higher the premiums.

There are some fine appraisers who participate on this forum and they can shed much more light on jewelry insurance, differences in valuation, and the various options that might exist in the market that consumers might want to avail themselves to.

Now for the feedback request: We would love to find out from the pricescope community if our providing an LOV is perceived as a value. If not, we could eliminate this service. Any comments, opinions or suggestions would be welcome.

Thank you!

 

[Gypsy]

Its shady only because its so ridiculously inflated. Bryan both you and GOG either need better appraisers or better management. Anything over 15%-20% is padding and "feel good" lying. And worthless. I am dissapointed that either compant engages in this practice.

 

[jrich]

This may be a dumb question, but I would see this as a good thing? Because if for some reason it were lost or damanged you'd get more money to replace it with than you initially spent??

 

[sonnyjane]

This may be a dumb question, but I would see this as a good thing? Because if for some reason it were lost or damanged you'd get more money to replace it with than you initially spent??

That's true, but if you insure it for that value, you're paying much higher premiums to insure it at the appraisal price. Make sense?

 

[SDplaya]

received the WF appraisal with my stone for a good $1000 over what my local appraiser said. That said, with fancy stones, my local appraiser admitted the wiggle room is greater as there's a tougher market to gauge.

This is essentially why i went to a local, independent appraiser with no vested interest in having me as a buyer/customer. I took what WF sent me in that letter with a grain of salt since I paid about $4k less for the stone vs. their appraised quote.

 

[Laila619]

This may be a dumb question, but I would see this as a good thing? Because if for some reason it were lost or damanged you'd get more money to replace it with than you initially spent??

That's true, but if you insure it for that value, you're paying much higher premiums to insure it at the appraisal price. Make sense?

Plus, not all insurance co's actually give you the money...they might choose to replace the stone with like and kind, or give you a check for *their* cost to replace, not necessarily what you insured it for.

 

[jrich]

How does Jewlers Mutual do it? I ask bc I expect my vendors appraisal to come in about 4K over what I paid him and I'll need to decide if I want to insure it for the higher amount. My instinct was to do it, since the premium on an 11k ring versus a 7k ring isn't too much of a difference.

 

[sonnyjane]

How does Jewlers Mutual do it? I ask bc I expect my vendors appraisal to come in about 4K over what I paid him and I'll need to decide if I want to insure it for the higher amount. My instinct was to do it, since the premium on an 11k ring versus a 7k ring isn't too much of a difference.

Jewelers Mutual doesn't do payouts, they replace it with a comparable stone/piece, so if you pay the premium on $11K worth of coverage, but it only costs them $7K (or less) to replace your ring, you'll be paying unnecessary premiums on the extra $4K.

 

[Gypsy]

How does Jewlers Mutual do it? I ask bc I expect my vendors appraisal to come in about 4K over what I paid him and I'll need to decide if I want to insure it for the higher amount. My instinct was to do it, since the premium on an 11k ring versus a 7k ring isn't too much of a difference.

There's no advantage. 4k over is way too much. Just insure it for 8k total. If you suffer a loss it won't cost the insurance company more than 8k. There is no point in over-insuring. Even if it's a dollar more a month, that's a dollar you don't have to spend.

Insuring for the higher amount is pointless, and wasteful. And the only one who benefits is your insurance company.

 

[distracts]

Wait, Jeweler's Mutual doesn't do payouts? I thought they did. This is an issue, as while I don't care about like kind for the diamonds, sapphires are a b*tch to find and if I ever lose my ring I will have to sort through dozens upon dozens to find one I love again, and want to be able to do this however I choose, whether in-person at a jeweler or online or whatever. I guess I'll call when the workweek starts again to ask about it.

 

[J_Rock]

JM does offer payouts (aka settlements), but I think only in the cases that they are unable to repair, replace, or rebuild the “covered property" with material of the same kind and quality, to the extent practicable. Translation: If the value of said items have risen sharply and JM is unable to find a cheaper/generic replacement, then I would imagine JM would likely want to settle for a payout. I am reading into this to mean that your appraisals needs to be written in such a way that doesn't allow wiggle room for interpretation of specificity. For example, I have an AVC, which we know is a branded cut. My appraisal is written as such, and there is no way in hell I would let JM try to pawn off a generic crushed ice cushion as a replacement. Since AVCs have gone up so much, i can't imagine any other option but a payout.

 

[Rhea]

You do not have to insure for the appraised value.

liz

This is really good to know -- had to get a UK appraisal for my e-ring and it came back at nearly £10,000! I love my ring and everything, but there's NO WAY it's worth that much. I

Ellie, I'm also in the UK and have not yet had anything appraised because I don't really know what to do. Everyone seems to charge a percentage of the item's value. Where did you get yours appraised?

/Hijack over

 

[lknvrb4]

I called JM yesterday to ask if I could have my pear covered at a capped off agreed upon price and was told no. I was transferred to underwriting and the lady was very firm with me that the appraisal retail price is what I would pay to replace my pear if I walked into a B&M store and had to buy it again so according to her, my ring would cost 16K at a B&M. The whole phone call left me frustrated, I just want to insure it for a price that I can replace it for online.

 

[Gypsy]

I called JM yesterday to ask if I could have my pear covered at a capped off agreed upon price and was told no. I was transferred to underwriting and the lady was very firm with me that the appraisal retail price is what I would pay to replace my pear if I walked into a B&M store and had to buy it again so according to her, my ring would cost 16K at a B&M. The whole phone call left me frustrated, I just want to insure it for a price that I can replace it for online.

Get a new appraisal. Tell them what you paid. Go over that by 15% to cover for increases and inflation. Send that to your insurance. And tell them to stuff it. They want your higher premiums. Or the people you talked to are ignorant.

 

[ponder]

Unfortunately for me 15% isn't going to cut it. With the increase in diamond prices in the past few years I am now 20% underinsured on studs that are only a little over two years old. I now have to get them reappraised at a cost of about half my annual premium to increase the cash payout to cover a loss, theft, or damage. I am now trying to figure out how much of an increase will cover me for the next few years.

 

[jrich]

Sorry I keep asking questions... Does this mean JM could replace my vache solitaire for a cheaper look alike, since I didn't pay full vache pricce?
And for the diamond, since my stone was 6K, would they replace it for another one with the same specs (1.43 K SI2) or would it be smaller since my stone is worth more than 6K?

Sorry I am so confused!

 

[CharmyPoo]

If you own a vatache setting and your appraisal states that .. they will have to give you back the same setting. I clearly made the appraisal state that my setting is Leon Mege. I don't want any other setting.

 

[smitcompton]

Hi,

Several yrs ago I called my insurer to find out what it would cost to insure my jewelry. He explained that every so often, several yrs, they would call the appraiser and get the a verbal new appraisal from them. He thought that people who appraise keep a copy of the appraisal and could just give an inflation increase or price increase on the phone if i provided the number of my appraisal.
My appraisals come with Id #s. I wouldn't have to go in and get another appraisal.

Im sure a valuable painting would not have to be looked at again. Just inflation and price adjusted. Of course this means you would go to the same appraiser.

Annette

 

[LibbyLA]

jrich,

"Like" means same size, color, clarity.

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I'll be dealing with JM again within the next week or two. I've bought several antique/vintage items. I expect most to appraise for more than I paid for them but I'm probably going to insure for what I paid for them or a little more. We'll see what happens.

I know they're not going to pay for an upgrade so I don't have a problem insuring for what I think I can by something similar for. I can understand wanting as nearly like as possible for an engagement ring or expensive piece, but similar will be good enough for antique/vintage that's not spectacular.

liz