Selling the family jewels
By Diana McLaren • Bankrate.com

Since the value of jewelry depends on so many variables, including the worth of gemstones included in the piece, McLean says it's a good idea to get an independent appraisal. You can take jewelry to someone like him for a verbal appraisal at no charge. If you hear from a reputable appraiser that you have something of value, you might want to proceed to a formal written appraisal. While there will be a charge for this, you'll know what you've got and can then investigate what it should fetch if sold.

In the case of simple gold wedding bands or chain necklaces, the only criteria is the karat rating, weight and price of gold on offer. Not much need for an appraisal there.

Silver says when she hosts a gold party, she upholds an ethical standard that includes "no pressure tactics. I also advise people to remove any stones since we don't pay for them." This is the general rule where Internet companies are concerned also, but customers need to check it out for themselves by reading the fine print.

Getting sentimental
Where jewelry is concerned, people may have a sentimental attachment that outweighs the value of the items, says Silver. In these cases, she advises potential sellers to keep the jewelry until they're really sure it's time to let go.

Since it's often connected to an important event (an engagement or birth of a child) or person (a family heirloom passed on from a favourite aunt) or purchased while on a trip to some exotic locale, people sometimes have an inflated value in mind where jewelry is concerned, McLean says.

"Another misconception is that the value for insurance purposes is the same as the value if the jewelry is sold." Insurance certificates, he says, "muddy the water." That's because appraisal for insurance is based on the replacement value (what it would take to purchase the materials, design and manufacture the piece) and that's seldom what the piece would sell for. "A piece may carry an insurance certificate of $4,000 but the resale value is actually $1,000."

The markup on new jewelry is high. "Where cars may be marked up 10 percent to 20 percent, jewelry is typically marked up by 200 percent to 300 percent," says McLean. So purchase price may not be a good indicator of resale worth.

Tips for potential sellers

• Get an idea of what you've got by having an appraisal done by a reputable source.
• When selling simple gold jewelry such as chains or wedding bands, check the karat worth since rates are paid accordingly.
• If selling over the Internet, read all the fine print so you know what's actually meant by insurance coverage, etc.
• Shop around and research potential buyers. If it's an Internet company, check it out and ask for references.
• Consider waiting if your jewelry has fallen out of fashion temporarily. A case in point is cultured pearls, which have declined in value because freshwater pearls have flooded the market.

"You've only got one shot at it when selling something," says McLean. "So take some time to do your due diligence." 

Diana McLaren is a writer living in Toronto.