WhiteFlash Independent Appraisal?

[cest_vrai]

I recently ordered a custom ring from WhiteFlash with an ACA center stone. I noticed on WhiteFlash''s website that they send the ring to a local independent appraiser before sending me the ring. I was planning to get it appraised myself when it arrived just as a quick check and for insurance, but I now wonder if that''s necessary and wanted to see what everyone here thought. Although WhiteFlash is very reputable, it just seems like there could be a slight conflict of interest (i.e., WhiteFlash is paying the appraiser for their own product).

Thanks for your help, I really appreciate it.

 

[Dreamer_D]

Date: 12/13/2009 1:05:10 PM
Author:cest_vrai
I recently ordered a custom ring from WhiteFlash with an ACA center stone. I noticed on WhiteFlash''s website that they send the ring to a local independent appraiser before sending me the ring. I was planning to get it appraised myself when it arrived just as a quick check and for insurance, but I now wonder if that''s necessary and wanted to see what everyone here thought. Although WhiteFlash is very reputable, it just seems like there could be a slight conflict of interest (i.e., WhiteFlash is paying the appraiser for their own product).

Thanks for your help, I really appreciate it.

There are in my mind two reasons to get an appraisal. One is to ensure that you received a diamond of the specs you paid for and that the diamond is the one in the cert. The other is to have a value for insurance. Some insurance companies will use your bill of sale for this, but others want an "appraisal", which really can be from anyone in the jewelry trade it seems to me.

I personally did not think it was necessary to have a full appraisal for the first purpose when I bought from WF, I feel that their reputation here was enough for me. But you may feel differently. For the second purpose, I don''t see why you couldn''t use the WF appraisal. The ones I got were not grossly inflated and seemed approprirate for insurance purposes.

When I scheduled my ring last year, I did end up getting my own appraisal for insurance because I am in Canada and the appraisal from WF is US. As I ithought it was indeed the diamond in the cert.

 

[Lestat]

Someone please correct me if I''m wrong, but I believe the Whiteflash "appraisal" is more of a quick verification that the diamond matches the certificate and is undamaged. My free appraisal from Whiteflash did include an approximate retail value, but I''ve read many times on this forum that insurers do not accept that as a full appraisal and you''ll still need a separate appraisal for insurance purposes.

 

[swingirl]

My insurance company accepted the paid receipt (I bought my stone from WF and had is set elsewhere). I only wanted my ring to be insured for the replacement value and not any more. Whiteflash's appraisals are not inflated and are pretty close to the price you pay.

I trusted WF and have never heard of an incident where the stone set was not the one purchased. But everyone has to feel comfortable with the transaction and if you feel better getting it appraised there is a list of good appraisers under RESOURCES.

 

[kenny]

Appraisals are never independent.
Appraisers work for the party who pays them.
Nothing wrong with that.

I am not challenging the ethics of WF's appraisers and I love WF.
I actually wish all vendors stopped including these "appraisals".
That appraiser is not working for free so their fee is built into the price you pay for the diamond.
I'd rather get the diamond for less without that bogus piece of paper.

That "appraisal does NOT make me feel better about my purchase; it frankly make me feel worse.
Here's why.
The "appraisal" says the diamond (which I just paid $6000 for) is worth $8500. (numbers just made up.)
Gimme a break.
That is absurd enough when you hire the appraiser but when the seller pays the appraiser to say it it just makes the whole system look bad AFAIC.

I realize appraised worth depends on factors like where you bought it but WF and the appraiser know perfectly well that I just bought it from them for $6000.
If the $8500 appraisal was legit they'd include a bill for the other $2500.

 

[Kaleigh]

Date: 12/13/2009 6:38:14 PM
Author: kenny
Appraisals are never independent.
Appraisers work for the party who pays them.
Nothing wrong with that.

I am not challenging the ethics of WF''s appraisers and I love WF.
I actually wish all vendors stopped including these ''appraisals''.
That appraiser is not working for free so their fee is built into the price you pay for the diamond.

That ''appraisal does NOT make me feel better about my purchase; it frankly make me feel worse.
Here''s why.
The ''appraisal'' says the diamond (which I just paid $6000 for) is worth $8500. (numbers just made up.)
Gimme a break.
That is absurd enough when you hire the appraiser but when the seller pays the appraiser to say it it just makes the whole system look bad AFAIC.

Ya know, I have to agree. I do love WF and trust their appraisals., But at the end of the day it''s their appraiser who says, yes this stone is such and such... I think it would be better if vendors gave buyers more time to get the stones independently appraised. Independent meaning they don''t sell jewelry and will not benefit if a sale is made...

I don''t distrust any of the appraisers that vendors use. But wonder how much time they spend, evaluating each stone, etc...

Meaning, I haven''t heard of someone getting a stone, and the PS vendor''s appraiser says nope not the correct weight, color, cut or clarity

Makes ya wonder.. Their appraisers are always in agreement...

So I ask, are there examples where thier appraisers have disagreed?? I only know of people who have taken their stones to Independent appraisers and then to hear something didn ''t match up. BUT will say, this really doesn''t happen very often!!! I mean seriously, I have been here 5 years and haven''t seen it happen much. Plus some labs are soft, like EGL and have to take that into consideration....

But it''s a great question... So let''s discuss this please!!

 

[denverappraiser]

Date: 12/13/2009 6:38:14 PM
Author: kenny
Appraisals are never independent.

Appraisers work for the party who pays them.

Nothing wrong with that.

Kenny,

You’ll notice that I avoid describing myself as ‘independent’, preferring the term ‘professional’ for exactly this reason.

Kaleigh,

It’s more common than you think but, in the case of vendor supplied ‘appraisals’, the appraiser isn’t grading the stone at all, he/she’s matching it to the lab report and assigning a value based on some formula for a hypothetical marketplace OTHER than where the transaction just occurred. I agree that this isn’t all that useful for the consumer but I doubt it’s a very expensive service either. It *IS* useful to the shipper because it provides a final check by an ‘independent’ witness before they ship that it’s the correct stone and that it’s undamaged as of the shipment. This can turn into a big deal if there is a claim from the customer to the contrary or if someone returns a damaged or incorrect item. I also agree that this would be a more useful and less confusing document for consumers if the value reported were the transaction price (and labeled as such.)

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[oldminer]

An appraisal, qualitative (quality only) or qualitative and quantitative (quality and dollar amount) which comes along with a new diamond supplied by the seller is not really provided on an "independent" basis. It may be very accurate and honest, but it fails the sniff test for the appearance of bias, even if there is no bias. Just knowing how the fee for the appraisal was derived raises the issue of credibility. It may be accurate in every respect, but there may be reasons why it fails to be so.

Why do firms like Whiteflash provide such paperwork? While those of us who see lots of the Whiteflash sales know they are a great firm with good business practices, many or most of their customers have no idea how honest they are. These newbie clients are taking a chance and Whiteflash is giving them one more piece of paper to help prove that they are "good people" to do business with. I see no harm at all in this as a business decision. It clearly makes sense and works for many people.

While we may think that these papers are not truly "independent" they do serve to create business and they do cost money. If the cost is less than the money generated by supplying them justifies giving out paperwork with diamonds, then we just need to recognize why and say it works for them. Meanwhile, some clients do want independent and/or professional appraisal work done after or before the purchase. Whatever floats your boat.

A professional appraisers knows how to provide an Independent Opinion of quality and value regardless of who hires them or who pays them, BUT if there is doubt raised to the honesty or accuracy of an appraisal because of who has paid the appraiser or who has a relationship with the appraiser, then just the hint of possible bias can create distrust and anxiety. Such doubt and anxiety should be kept to a minimum in the optimal situation.

 

[Richard Sherwood]

Date: 12/13/2009 6:38:14 PM
Author: kenny
Appraisals are never independent.
Appraisers work for the party who pays them.
Nothing wrong with that.

I am not challenging the ethics of WF''s appraisers and I love WF.
I actually wish all vendors stopped including these ''appraisals''.
That appraiser is not working for free so their fee is built into the price you pay for the diamond.
I''d rather get the diamond for less without that bogus piece of paper.

That ''appraisal does NOT make me feel better about my purchase; it frankly make me feel worse.
Here''s why.
The ''appraisal'' says the diamond (which I just paid $6000 for) is worth $8500. (numbers just made up.)
Gimme a break.
That is absurd enough when you hire the appraiser but when the seller pays the appraiser to say it it just makes the whole system look bad AFAIC.

I realize appraised worth depends on factors like where you bought it but WF and the appraiser know perfectly well that I just bought it from them for $6000.
If the $8500 appraisal was legit they''d include a bill for the other $2500.

An appraiser is considered "independent" if he does not engage in buying or selling. It has nothing to do with who hires him.

Most appraisers appraise at the market level which the vast majority of diamonds are purchased at, bricks & mortar retail replacement. Not at (very) low internet retail.

If you want an appraisal at (very) low internet retail, just ask for it. But keep in mind that you might not be able to replace your diamond next year for the (very) low internet retail at which you purchased it this year.

 

[oldminer]

Rich;

We differ on the definition of "Independent". I understand your approach, but the fact that someone is paying a fee to the appraiser always has some appearance of potential bias. We all do need someone to pay us. A Professional appraiser remains unbiased regardless of how they are paid, but one can always have some lingering doubt if they are the suspicious type. When a consumer pays the appraiser for their opinion on something just purchased elsewhere, the appraiser is given the best chance to be completely unbiased. If the seller pays for the opinion, there may remain some doubt about bias.

I have proven over and over again that my being a buyer of second hand jewelry has no effect on appraisal work done for clients who want to have retail replacement, new purchase appraisal work. If I have to appraise an estate, I generally say I''d rather be the buyer than the appraiser. I can''t appraise the estate and then become the buyer without crossing the line, but I can perform either task "independently". Selling to appraisal customers is not so easy to get by. I won''t compete with retail vendors and do not sell to consumers except on a very limited "friends and family basis" which I believe is forgiveable. Such buying and highly limited selling does not change the Independent status of work.

Being "Independent" has more to do with the professionalism and ethics of the appraiser than simply not buying or selling.

Of course, taken to an extreme, any outside buying and selling can be questioned, but under control, it works just fine. (for me)

 

[IceExplorer]

Date: 12/13/2009 6:38:14 PM
Author: kenny


Appraisals are never independent.


If the $8500 appraisal was legit they''d include a bill for the other $2500.

That comments makes a lot of sense to me.
I find the ''appraisal'' value to discount the validity of the purchase value or is it the other way around? The contradiction adds to what brings skepticism to this industry.

That being said, I''m thankful I found Pricescope.com during my due diligence process. Everyone here has really helped me gain confidence and much more in-depth knowledge.

THANKS EVERYONE!!!

 

[Texas Leaguer]

Date: 12/14/2009 11:22:04 AM
Author: oldminer
An appraisal, qualitative (quality only) or qualitative and quantitative (quality and dollar amount) which comes along with a new diamond supplied by the seller is not really provided on an ''independent'' basis. It may be very accurate and honest, but it fails the sniff test for the appearance of bias, even if there is no bias. Just knowing how the fee for the appraisal was derived raises the issue of credibility. It may be accurate in every respect, but there may be reasons why it fails to be so.

Why do firms like Whiteflash provide such paperwork? While those of us who see lots of the Whiteflash sales know they are a great firm with good business practices, many or most of their customers have no idea how honest they are. These newbie clients are taking a chance and Whiteflash is giving them one more piece of paper to help prove that they are ''good people'' to do business with. I see no harm at all in this as a business decision. It clearly makes sense and works for many people.

While we may think that these papers are not truly ''independent'' they do serve to create business and they do cost money. If the cost is less than the money generated by supplying them justifies giving out paperwork with diamonds, then we just need to recognize why and say it works for them. Meanwhile, some clients do want independent and/or professional appraisal work done after or before the purchase. Whatever floats your boat.

A professional appraisers knows how to provide an Independent Opinion of quality and value regardless of who hires them or who pays them, BUT if there is doubt raised to the honesty or accuracy of an appraisal because of who has paid the appraiser or who has a relationship with the appraiser, then just the hint of possible bias can create distrust and anxiety. Such doubt and anxiety should be kept to a minimum in the optimal situation.

Dave,
Thank you for the kind words. I would add one other very fundamental reason we provide the document what we refer to as a "Letter Of Verification", lovingly referred to as a LOV

Many of our internet customers are located outside large metropolitan centers and in some cases do not have convenient access to qualified jewelry professionals. Since many of our customers desire to insure their purchase, we provide this document, which is accepted by Jewelers Mutual as well as other insurance providers, as a service and convenience to them.

As in all things we seek to be entirely transparent as to the purpose and value of the goods and services we offer. While the symantics of "independent" can be debated even by top professionals, and valuations can be based upon various market scenarios and formulae, our LOV is done by a GIA graduate gemologist who runs an appraisal service that is relied upon by a large number of wholesalers and retailers here in Houston. We have found his valuations to be generally comparable to conservative appraisals we see from other sources.

While the LOV is not intended to be a substitute for an exhaustive arm''s length workup, it does serve a constructive purpose for a great many of our clients. We never discourage our customers from seeking additional assessments from qualified professionals- they usually serve to underscore our value proposition. Furthermore, we know our customers to be astute shoppers who understand the product we are offering and the competitive landscape within which we operate. By seeking information and opinions here on pricescope and comparing apples to apples with other merchants here and elsewhere, most of our customers have a solid understanding of what they are purchasing. The LOV confirms the product they are recieving is the product they have purchased.

 

[Allison D.]

As Lestat correctly stated, we provide a letter of verification from a third-party; it''s not represented as an appraisal and isn''t meant to substitute for one.

Before grading labs existed, buyers had no way to determine if the price for their purchase was a fair one; getting a full appraisal was the only way a customer could make sure he was paying a fair price. Grading reports merely provide a pre-secured professional opinion about the properties of a stone that impact market value.

Generally speaking, people who purchase goods with grading reports already have confidence in the grading results, so they aren''t looking for full appraisals; they just want to be sure the stones they receive are the correct stones.

Our letter of verification serves us and our clients by assuring the stones being shipped are the correct stones and they are undamaged. It also makes life easy for our customers by providing documentation they''ll need to establish coverage through their insurance carriers, which is why it lists replacement cost.

Also, to answer Kenny''s specific concern about the accuracy of the stated values: the value is meant to reflect replacement cost, not purchase price. Purchase price is established through your invoice. Replacement cost is what is likely will cost you to replace your stone in a retail setting. Kenny, you may have paid $6,000 for your stone, but what happens if online providers don''t have comparable inventory in stock at the time of your replacement? You''d have to go to the retail sector where the costs would be higher. Our letters of verification are meant to keep the customer whole for replacement regardless of their purchase venue.

Hope this information is helpful.

 

[kenny]

Thanks Bryan.
I understand what you are saying.

An "LOV/appraisal" states what a diamond is worth based on where and how it is sold, so shouldn't the dollar value on the LOV/appraisal (that is folded in with an invoice and shipped with a diamond) match the price on that invoice?

Can you understand how a 30% mismatch decreases rather than increases customer comfort?
Do you really think customers jump up and down because they only paid $6000 for a $8500 diamond?
I'll be a few of them think you made a mistake and sent them a more expensive diamond.
It is truly confusing to your customers.

We all know are several "values" for diamonds based on where and how it is sold.
Why not list them all, right down to what a pawn shop will give you for an ACA?

It seems disingenuous, or worse, to only list the highest "value" of several, especially if you are doing this for the comfort of the less-informed.

I think you should not mention any value on your LOV, just have them verify it is the correct stone.
Better yet, make the LOV optional and offer a discount to those of us who don't want it.

 

[denverappraiser]

Date: 12/14/2009 7:57:36 PM
Author: Allison D.

Also, to answer Kenny's specific concern about the accuracy of the stated values: the value is meant to reflect replacement cost, not purchase price. Purchase price is established through your invoice. Replacement cost is what is likely will cost you to replace your stone in a retail setting.

Allison,

Are there now other stores where someone can buy an ACA? Where? Wouldn't it be more appropriate to list the cost to replace it with a genuine ACA from the only store that sells them, particularly since the statement of replacement cost is coming from that very store? If so, what better basis could your appraiser have than to observe that the only vendor who can sell the item sold that exact one on the very day of the appraisal? Maybe not, that depends on the purpose and limiting conditions of the appraisal (which aren't mentioned on the LOV) but this decision has just crossed the line to an appraisal, not a verification service. If he wants to make a case that it would cost more somewhere else, on some different date or under some different circumstances he should make and defend his case rather than just stating a value.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Karl_K]

My personal opinion is that the letter provided by vendors is a good thing but it must be properly understood.
It is to satisfy your insurance company period.

In my opinion aprox. cost +30% is generally a good amount to insure a diamond and not overpay or be under insured.
That is all the document is good for is setting the amount for the insurance company.

Some companies do miss-advertise the document but WF isn''t one of them.

 

[Karl_K]

Here is the exact wording from the WF website...

"Every diamond and/or ring that is sold by Whiteflash.com is primarily inspected by our in-house experts. In addition, loose diamonds and/or any jewelry item set with certified diamonds are personally inspected by an independent appraiser who issues a signed Letter of Verification confirming:

1. The diamond has been professionally examined and matches the accompanying grading report from AGS, GIA or other labratory.
2. Setting description.
3. Approximate retail replacement value.

This Letter of Verification accompanies your purchase, confirming the contents of your package and ensuring your secure shopping experience.*

* The letter of verification is intended as a courtesy, not as a substitute for a full third-party appraisal, and is not included with orders shipped to independent appraisers."

I don't know how one could make it any more clear....

 

[Allison D.]

Neil,

You''re right; there are no other places to buy an ACA. That said, I''m not sure that binding our customer into a replacement situation that only we can resolve for him is truly serving HIS best interests, even though it would clearly benefit us.

What happens if we don''t have what he wants/needs available when he calls? It may not be possible to buy an ACA anywhere else, but it is possible to buy another AGS0, 1 carat, H, SI1 stone.

If a customer wants to provide documentation for insurance purposes that will hem the carrier into replacing only with an ACA, we provide ample materials (i.e. ASET, Idealscope, images, etc) for him to do so. If a client''s main priority was achieving the lowest possible premium, he is able to submit our invoice to his insurance carrier instead of the LOV.

The LOV''s purpose is clearly outlined on our website. Its main intent is to provide assurance to the client that he is receiving what he paid for. It serves a secondary courtesy function for those clients who wish to submit outside documentation to their carriers. We never discourage our clients from seeking appraisal services through professional appraisers such as yourself, but we do recognize that some may elect not to do so or may not have handy access to such services, and the LOV is an added service feature for them.

 

[Allison D.]

Date: 12/14/2009 8:00:04 PM
Author: kenny
Thanks Bryan.
I understand what you are saying.

An ''LOV/appraisal'' states what a diamond is worth based on where and how it is sold, so shouldn''t the dollar value on the LOV/appraisal (that is folded in with an invoice and shipped with a diamond) match the price on that invoice?

Can you understand how a 30% mismatch decreases rather than increases customer comfort?
Do you really think customers jump up and down because they only paid $6000 for a $8500 diamond?
I''ll be a few of them think you made a mistake and sent them a more expensive diamond.
It is truly confusing to your customers.

We all know are several ''values'' for diamonds based on where and how it is sold.
Why not list them all, right down to what a pawn shop will give you for an ACA?

It seems disingenuous, or worse, to only list the highest ''value'' of several, especially if you are doing this for the comfort of the less-informed.

I think you should not mention any value on your LOV, just have them verify it is the correct stone.
Better yet, make the LOV optional and offer a discount to those of us who don''t want it.

Kenny, the LOV is a courtesy document provided for those who might find it reassuring or useful, and it does no harm to customer who don''t ultimately need it. Neil correctly surmised that the service is inexpensive, to the point that there would be no savings to pass along via discounting if we didn''t provide it.

As Karl pointed out, our website pretty clearly states what the LOV is and what it''s for. Between that and education throughout interactions with our staff, we haven''t found customer confusion to be an issue on this. By and large, they understand its role and often find value in it. If that changes, we''d certainly revisit our decision to provide it.

Since replacement value traditionally means market value at a bricks and mortar venue, providing internet values instead would likely cause more confusion for customer and insurers instead of less.

I don''t know where anyone would get the impression that an LOV is designed for the ''less-informed'' in mind; if anything, our clients tend to know more than the ''average bear''.

We find knowledgeable customers to feel confident in their vendors and grading lab reports; to them, LOVs can be especially useful in securing insurance coverage without bearing additional verification costs.

I appreciate your position personally, Kenny, and I''m confident we''ll keep a pulse on this issue with our customers and make adjustments if needed.

 

[noob2010]

WF, what is the average markup percentage of the independent appraiser''s "Estimated Retail Value" over the regular non-pricescope discount price?

I''m very curious because mine was close to 50%.

 

[Dreamer_D]

Date: 12/14/2009 10:24:25 PM
Author: Karl_K
My personal opinion is that the letter provided by vendors is a good thing but it must be properly understood.
It is to satisfy your insurance company period.

In my opinion aprox. cost +30% is generally a good amount to insure a diamond and not overpay or be under insured.
That is all the document is good for is setting the amount for the insurance company.

Some companies do miss-advertise the document but WF isn''t one of them.

Yes, this is why I like it, saves me from having to go out and get it done just for insurance.