13 September

Evaluating Your Jewellery

Arno Egen, the founder of Mr Kruger, a Gold Bullion specialists company, began evaluating jewellery 13 years ago when he bought his fiancé a wedding ring. During that purchase, Mr Egen realised the tremendous value of Gold and became extremely interested in the evaluation of jewellery.

It is important when considering having your jewellery evaluated, to understand that valuations can be subjective and you may receive a difference in opinions from one jeweller to another. There are four different values for a piece of jewellery, and these depend on the purpose of the valuation.

1)     The Insurance Value

The jeweller can give you a value of your jewellery for the specific purpose of handing over to your insurer. This is the estimated cost of replacement of the item with something of similar specifications. It is the highest value of all as it is determined by the current retail value and includes a 15% escalation.

2)     The Retail Value

This value can be determined by ascertaining the current market value of the item as advertised by a retailer. This includes the retailer’s markup and will, therefore, be the second highest value of your piece of jewellery.

3)     The Second-Hand Value

This value will be the third highest value of the item.  It is simply made up of the sum of the  materials and calculates the current worth according to prevailing market prices. This value will reflect 30 to 60%   of the retail value of the item.

4)     The Estate Value

This value will be about 20% of the retail value of the item, and therefore the lowest of all the valuations. It is calculated according to what the piece of jewellery would be worth in a forced sale.

The process of evaluating a piece of jewellery is complex and requires knowledge and experience. Firstly, the purity of the metal used needs to be determined. In the case of Gold, the evaluation expert needs to consider the carat of the Gold, the common measure of the purity of the substance. Gold jewellery comes in either 9, 14, 18 or 22 carats. Gold in its purest form is 24 carats – what is commonly referred to as fine Gold – but is very soft and easily damaged making it unsuitable for the manufacture of jewellery.

In circumstances where the purity of the metal has yet to be determined, the valuation expert will use a non-destructive precious metal analyser such as an XRF Analyser which uses radiation and is designed to be non-intrusive, quick and extremely accurate in the chemical analysis and purity testing of Gold and other precious metals.

Mr Kruger is able to evaluate any kind of jewellery that has been crafted with a precious metal, this would include Gold, Silver, Platinum or Palladium (a durable and more cost effective alternative to Platinum which works well for rings owing to its hardiness).

Secondly, the jeweller will need to assess the quality and weight of any precious or semi-precious stones embedded into the piece. Stones need to be assessed in terms of their current market value. Sometimes the exact dimensions and facets of a stone are not immediately visible, therefore the stone might have to be removed with the utmost care in order to be measured. Mr Kruger will make an offer on all Diamonds and selected high-quality Tanzanite.

Diamonds are evaluated on their carat, their colour, their clarity and their cut; what is known as the Four Cs of Diamond quality. Since round, brilliant cuts are more popular these days, these would fetch about 25% to 30% more money than other cuts. Mr Kruger employs a similar principle and process as is used in other grading laboratories in South Africa. Additionally, Mr Kruger refers to the Rapaport Diamond Report, the international jewellery industry standard when it comes to the pricing of Diamonds. Semi-precious stones are interrogated on a case by case basis as there are no formal guidelines as exists the Four C’s for the valuation of Diamonds.

The current market value of the elements is assessed according to the weight and quality of the metal as well as the cut and quality of the stone. Once the weight has been determined it is included in a formula that incorporates the prevailing price of the commodity in relation to its weight. Mr Kruger lists their prices for commodities in relation to their weights on the pricelist on their website. These are updated daily based on international market activity. Mr Kruger does not add a commission to the offer on jewellery, and the price to the customer reflects only the evaluated cost of the item for sale.

We will make the customer an offer, and if the customer accepts the offer, the deal is conducted there and then. The payout is done either in cash or via electronic transfer. An exchange for a Krugerrand can also be negotiated, should the customer opt to go that route. A valid driver’s license or South African ID book is essential to complete the transaction.

If it is a customer’s preference to refashion or recycle their jewellery, as opposed to selling it, either the customer can come in with a design in mind, or they can set up an appointment with Mr Kruger’s in-house jewellery designer, who will take them through the process of re-envisioning their jewellery piece and designing an original, unique hand-crafted trinket.