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The Reality of Real Secondary Market Value & Retail Appraisal Value

Posted on November 26th, 2018 by JoeG

A couple buys an engagement ring at a retail jeweler before the holiday season , someone buys jewelry while on vacation from a hotel resort jeweler, another person purchases jewelry or diamonds from a nationwide jeweler, department store or television jewelry sales show, you’ve obtained jewelry that your spouse or ex-spouse or a relative gifted jewelry to you as well as the Appraisals or receipts showing the price they paid for the items purchased at a retail store; the scenario can go on and on but the end remains the same: Appraisals that reflect the Appraised Retail Replacement Value, or receipts showing the price someone may have paid for jewelry at a retail jeweler or a “wholesale” jeweler is not reality when one is trying to re-sell the items on the secondary market. This is a reality that most educated consumers know & understand but some people when they’ve decided to sell their jewelry, diamonds, watches, pre-owned jewelry and scrap gold to a gold buyer or estate buyer seem to misunderstand. Some get upset and even want to blame the buyer or “kill the messenger” when they hear that their items are not worth the price they paid at the retail store, or that the secondary market values are not even close to the retail appraisal values.
Appraisals are necessary so in the event of a loss the insurance company would pay a retail marked up value so the consumer can go into a retail store to replace their jewelry at a retail price ; not to determine or mandate what prices should be expected to receive when selling the appraised items on the pre-owned secondary market.

Jewelry, Diamonds, Watches, Silverware, Coins

 

Some consumers seem to forget and realize a gold buyer is like any other business, they are a business and are in business to make a profit as all other businesses are. Even in cases of selling higher-end re-usable and hallmarked pre-owned jewelry like Cartier, Van Cleef & Arpels, Tiffany & Co., BVLGARI, Rolex, the consumer will still receive a discounted evaluation when selling these high-end retail items as will the dealer or buyer that purchases them. There are weekly and monthly publications that dealers & buyers subscribe to & use for determining the current pricing for coins, diamonds, watches etc that list and show indications of what the prices are for dealer to dealer transactions on a weekly basis and even those listed prices in some cases are not always perfect as the major nationwide and world diamond buyers and market-makers will still discount the listed dealer prices by 20 to 60% for diamonds, coins, watches etc. even when buying from another dealer in dealer to dealer transactions and that is what the secondary market is predicated on, NOT what the consumer paid for the items or what the Appraised Value may be.
Again, Appraisals are necessary so in the event of a loss the insurance company would pay a retail marked up value so the consumer can go into a retail store to replace their jewelry at a retail price ; not to determine or mandate what prices should be expected to receive when selling the appraised items on the pre-owned secondary market.

Old Gold, Unused Gold Scrap, Gold, Silver, Platinum

 

The same applies to certain consumers wanting to sell their unwanted, old or scrap gold, they become armed with misinformation about what gold prices for individual karat gold is worth from an informational internet website. Gold “information” websites, for example, state/list the “full melt value” per DWT ( pennyweight) and not for the real world value a gold buyer will actually get when he sells the gold to a refiner. Gold buyers do not get 100% of the full melt value , a gold buyer will usually receive 94 to 99% of the “final refined value” so when the gold information sites list the full 100% melt value of each karat for instance: 14k at .585 purity they are stating what the legal contained percentages should be when a manufacturer makes the jewelry, and ironically a lot of 14k jewelry is approximately .535 to .565, not .585 after refining and then the final value a gold buyer ends up yielding is approximately 94 to 99% of that value once the assay is completed, and in the case of silver 80 to 87% of the value; not to mention that the gold buyers must pay the refiner a fee for the assay as well as have to amass a large quantity of gold before they can even send the gold in to the refiner to receive those percentages. And this applies to all karats from 8 karat all the way up to 24 karat. Some consumers just do not grasp and fail to understand this; “some” can, do & will take their frustration out on the gold buyer rather than realize they or their family themselves may have paid too much for the item and they know the retail store they purchased the item from will not buy it back from them ( unless traded in for another higher priced retail item) so they take their frustration out on the gold buyer, and refuse to realize that the appraisals are not an indication of the secondary market values for sale. The internet can inform yet at times it can also misinform. This holds true when consumers try to compare the Appraised values to the real Secondary market value.

Outdated Jewelry Styles & Demand

 

There are various styles of jewelry that were popular that are no longer in demand as styles change, in the 1980s like tennis bracelets many with smaller diamonds, cluster rings, and cluster pendants & diamond cluster earrings that were retailed at high prices back then and gold buyers cannot even get more than the gold value on some of these items because the diamonds are usually so cloudy or included and low quality, not to mention that the demand for those items are not popular any longer. We try to explain to some customers that if they expect to receive the retail appraised value or original purchase price value to try to return them to the store they purchased them from or sell their items privately, and in most cases they have tried already online or they are past the return privilege period so then take their frustrations out on the gold buyer for not paying the retail prices or close to what they have paid, and think their items are worth based on the Appraisal value.

Units of Measure that Precious Metal Buyers Use

 

Many gold buyers in the USA use pennyweights ( DWTS) as the unit of measure for purchasing, sometimes the seller will confuse the translation of these units of measure because they are thinking in grams and may have bought 100 grams which converts to 64.3 DWTS, and when they are at a dealers or call up a gold shop and hear that they have 64.3 DWTS they will become upset and say no I have 100! , thinking suspiciously and accusing the gold buyer when it is really a matter of conversion like: Liters to Gallons, Fahrenheit to Celsius, sometimes causing the buyer to get a hair trigger bad review when the seller just does not understand. There will always be differences from dealer to dealer, and store to store. Transactions can be based on 20 to 25% profit, and 5 to 15% on bullion related items, but be that as it may a gold buyer is a business that pays rent, heat , electric, advertising, license fees, employees, supplies, taxes, etc. and is there to make a living and pay their overhead and bills.

Jewelry Manufacturers, Retail Jewelers & Retail Jewelry Pricing

 

Gold, Silver, Platinum & Palladium are commodities, and once they are manufactured into jewelry the retail jeweler pays the jewelry manufacturer a price for finished items for their inventory and they then, in turn, must sell the items for at least Triple keystone which means 3 times what they paid the manufacturer , and some retail stores even sell for 4 to 6 times more and it is their prerogative, they are a business and are in business to make a profit. Most consumers are intelligent enough to know this and do realize businesses are in business to make a profit, but there are still the few that think because their jewelry has an appraisal they should get appraised values or what they paid for it.

Keeping Expectations Realistic

 

We will and have been paying top dollar for 39 years and do our best to make a mutually satisfying win/win transaction; one should prepare and enlighten themselves before setting out to sell their gold, silver, jewelry, diamonds, coins, watches or silverware, that this is the way the secondary market is and their expectations will result in a happier mutual transaction.

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"I recently worked with Chicago Gold Gallery to design an engagement ring. From picking out the stone to designing the setting, it was a wonderful experience to say the least. Thank you so much for your help!"


Date: 07/22/2014 • 5 / 5 stars ★★★★★

Can't say enough about this place.

Recently took my family of 4 for a week to Chicago for a family vacation. We were on a limited budget but being lifelong Cub fans I thought it would be a great treat for my kids ages 7 and 10 to go to a game that we hadn't planned for...


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Love this place!

Chrissy & Joe are all super friendly and easy to work with. I trust them and they will do whatever they can to help you including giving you advice on what you have or what you should look for. I won't ever go anywhere else and I've recommended it to several friends.


Date: 08/02/2015 • 5 / 5 stars ★★★★★

I would do business with them again

I had a diamond ring that I wanted to sell and they gave me top dollar for it. They were so nice and I would do business with them again.


Date: 07/17/2015 • 5 / 5 stars ★★★★★

Don't Hesitate to call...

I find that Joe at Chicago Gold Gallery consistently offers and pays more for my coins than coin dealers in Chicagoland. He's very nice and easy to deal with. Don't hesitate to call him and preferably visit him.


Date: 12/04/2015 • 5 / 5 stars ★★★★★

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