Sunday, January 17, 2016

Are Appraisals and Lab Reports the Same Thing?

I was asked the other day which tool would be best to have when evaluating a jewelry item: a lab report or an appraisal. This question comes up quite frequently since I am a certified appraiser, so I thought it would be a good occasion to make the distinction here.While the quick answer is that both are good to have because they complement each others strengths, it is not crucial to have both. Let's break it down:

An appraisal for jewelry is a document generally produced by a gemologist with appraisal qualifications which provides a monetary value for your jewelry. Because the most common appraisal is for insurance purposes, the value produced is based on market items that are comparable to the item in question. Meaning that, should a loss occur, it would be possible for insurance companies to provide either a similar item in kind or in its monetary value. The appraiser will also take into consideration factors regarding the jewelry itself: If is was handmade or cast industrially; if it was made by a special designer; if it had been worn by a very important person or in a very important period in history. All of these things are involved when determining the final value. 

A sample appraisal for replacement retail value. Photo courtesy of

That said, there are drawbacks. It must be understood that an appraisal given for replacement value is only an indicator of what you could claim on an insurance report. It is not necessarily the price you could fetch for the resale of your item. Too often people believe that the two are the same and feel duped when they find that their jewelry has lost value in its sale second-hand.  Also, appraisers are limited to the equipment they have at their disposal, and are not allowed to take the jewelry apart for inspection.  Meaning that most of the quality classifications will be approximate based on what they can see. 

By comparison, a lab report is produced by institutions (GIA, AGS, Lotus) that are equipped with very specialized tools and manned by scientists who can determine empirically the makeup of unset stones. From there they can determine many things, such as the where the stones were sourced as well as the levels of certain mineral impurities which cause color. In the world of colored gemstones, origin and color are two factors which will certainly impact the value of a stone; this is why these tests are so important. Also, because these scientists are not limited by the craftsmanship of jewelry (stones must be unset), they can subject stones to a battery of tests that will give very accurate and categorized assessments in color, clarity and cut. This is crucial to the diamond industry, since the proportions, symmetry, color and clarity are the distinguishing factors between diamonds and their respective prices. 
A sample GIA lab report for a diamond. Photo courtesy of

Lab reports have their own drawbacks. As mentioned before, these institutions cannot work on set jewelry, since the materials they are fashioned in can compromise the classification of color and clarity. Therefore, if curious about the scientific breakdown of your stone, it is important to get it examined before setting it. The biggest drawback of a lab report is that it contains no information regarding the stone's potential monetary value. They simply provide the information that will allow gem industry experts to classify it more readily. For instance, they can tell you if a ruby came out of Mozambique or Burma, but they cannot tell you what this price distinction would be  (and trust me,  there is a significant difference in price). 

As mentioned before, there are both strengths and weaknesses in these two tools.  Aside from everything that has been said, it is as always important to find reputable and honest counterparts of each. Unfortunately we find in both parties people who will over/undervalue  stones and jewelry at will. While the industry is working to flush out less honest individuals, it is important to look for those who remain transparent, meticulous and dedicated to finding the true value in our luxury items.