Appraisal: A Recession-Proof Solution for Jewelry Retailers in 2023 and Beyond

Why many are turning to a new service to protect against economic headwinds and a potential downturn.

By Warren H. Morss, GIA GG, ASA, MGA®

2023 is shaping up to be a pivotal year for retail jewelers. While experts argue on the certainty of a recession, consumers are dealing with stormy inflation levels not seen for the past 40 years. Essentials, like food, gas, utilities and housing are taking precedent over discretionary spending, including gems and jewelry purchases.

The last time the jewelry market faced a recession it took seven years for jewelry consumption and jewelry retailer sales to recover.[1] To protect against such headwinds or a potential downturn, savvy retail jewelers will look for solutions to help recession-proof their business. One solution garnering attention is the addition of appraisal services offered to consumers.

_______________

[1] Danziger, P. (2022, March 21). Jewelry Market Must Prepare for a Steep Drop and Signet Jewelers is Ready. Forbes. https://www.forbes.com/sites/pamdanziger/2022/03/21/jewelry-market-must-prepare-for-a-steep-drop-but-signet-jewelers-is-ready/?sh=e0c92c7330fd

Why? Because an opinion of value is in constant demand. One of the primary benefits of adding appraisal services is its uncorrelated nature to economic change. No matter whether consumers are purchasing gems or jewelry for lifestyle or alternative investments, or selling such for income, the resulting transaction requires a thoroughly researched and documented opinion of value. Ideally, one defendable in court should a dispute arise.

When it comes to appraisals what constitutes a opinion of value? For many jewelers their explanation would focus on retail experience and market knowledge, however sadly for some this mistaken interpretation has led to costly errors and legal problems. So how does one become “qualified”? There are three key components: education, accreditation and membership.

Education

Education is crucial to understanding the principals, practices, standards and terminology of valuation. Professional organizations, like ASA for example, offer complete programs for novices or jewelers seeking to start their career or expand their expertise, as well as for allied professionals, like insurance professionals, auctioneers or attorneys, seeking to gain a greater understanding into areas affiliated with their jobs and the people connected to them. ASA’s three course Principles of Valuation program includes over 100 hours of instructor led content tailored exclusively for the gems & jewelry industry. The Society also offers an introductory course, Fundamentals of Jewelry Appraisal, that provides an excellent primer into the profession. Registration is currently open for their February 15, 2023 virtual offering. Their Foundation also provides educational grants.

Accreditation

Credentials are important, but the process behind earning such even more. Undergoing a vigorous process complete with exams, peer reviews and experience requirements are a critical differential. ASA designated members must successfully pass four comprehensive exams; undergo a peer review to measure research, analysis and report writing skills; and complete or demonstrate 5-10 years of direct work experience for the Accredited Member (AM) or Accredited Senior Appraiser (ASA) designations. Additionally, these credential holders must reaccredit by completing 100 hours of continuing education every five years. ASA also offers the Master Gemologist Appraiser®, an advanced, specialized certification program, one of the most respected credentials in the gems and jewelry appraisal profession.

Membership

Maintaining membership in a professional organization, like ASA, demonstrates to consumers your commitment to the highest possible standards in ethics, professionalism, education and designation criteria, as well as being objective, unbiased and a trusted expert. Not all professional organizations are the same, be sure to review and understand the values and requirements to belonging, as well as the reputation you are aligning yourself with.

While the near economic future is still cloudy, the benefits and opportunities for retail jewelers to recession-proof their business by adding appraisal services are clear. So are the competitive advantages of partnering with a professional organization, like ASA, to pursue the necessary education, accreditation and membership needed to become a “qualified” gems & jewelry appraiser.

For more information about becoming an appraiser or hiring one, visit www.appraisers.org or call (800) 272-8258.

Warren H. Morss, GIA GG, ASA, MGA®, is Managing Principal at Boston Estate & Gem Appraisal. Warren has over 45 years of experience in the Jewelry Industry and related fields. He has worked in wholesale and retail sales of loose and mounted diamonds, watches, and designer Jewelry. His clients consist of banks, attorneys, insurance companies and private individuals. He holds a Graduate Gemologist (GG) degree from the Gemological Institute of America (GIA), an Accredited Senior Appraiser (ASA) designation and Master Gemologist Appraiser® (MGA®) from ASA. Warren also serves as Chair of ASA’s Gems & Jewelry Discipline, and instructor of the Society’s Appraising Gems and Jewelry for Insurance Scheduling course.