These guidelines are supplied directly from the JCSA:
The issuing of any document today is legal and binding, sometimes even with exclusion clauses in place. It is important that we have consensus on the issuing of Valuation Certificates to affirm the credibility and ethics of the jewellers in South Africa. Jewellery pieces to be valued are not always new pieces sold where stones, metal, and qualities are known. It is of utmost importance that the valuator attends all courses and refreshment courses regarding jewellery and gemmology where possible. Remember, your knowledge and identification of a piece depends entirely on the product and technical knowledge. As anybody can call oneself a Valuator this does not confer expertise without education.
The following should be noted for issuing certificates:
Remember, a Valuation Certificate is not a “glorified receipt”!
Have a pricing structure in place for the valuation of pieces and quote a price for the job (if applicable) to be completed before accepting the goods. It is advisable to use a “rate per article” system and not a “percentage of total value” as this system is open to abuse, for example, giving a higher valuation to charge more.
Note that there are two types of valuation certificates: One which reflects the replacement value of the article, and one which is used for Estate purposes.
A VALUATION ISSUED FOR REPLACEMENT VALUE:
Should reflect the value of a similar replacement article that you or another jewellery / antique dealer must supply to the customer in the unlikely event of the loss of such an article. It is in other words, no use quoting, for example, on “old cut diamonds” if you know that the replacement product could never be supplied. In this case, you would have to quote on a similar quality and size in the brilliant-cut range of stones. Never assume that a customer would not want a family heirloom to be remade. Quote adequately as the customer expects to be put in the same position as before the article has been lost or stolen. Term to be used then: “Comparable Replacement Value”.
Ensure that you advise the customer that the price given on the valuation for insurance purposes is not an offer to purchase on your behalf and that it reflects the replacement value of articles. Make it clear to them that there is an escalation built into the price structure.
Customers need to understand the difference between ‘replacement value’ and ‘resell value’.
‘Replacement value’ relates to the method for determining what an insurance company will pay you in case of loss. It equals the cost of replacing the item of jewellery. ‘Resell value’ refers to the price which something can achieve when sold in the future.
Jewellers may wish to advise their clients to accept a ‘valued policy’ from their insurer. A ‘valued policy’ is an insurance policy in which the insurer and insured agree on a stated amount that will be paid in the event of a future loss instead of an amount that would have to be proven as the actual loss.
A VALUATION ISSUED FOR ESTATE PURPOSES/FAIR MARKET VALUE:
Should reflect what the market would pay for the particular article in the condition it is at the time of the valuation. In the event the party/parties inheriting the piece want to sell it, it would be a reflection of what the money value for a given piece would be. It must also be a true reflection of value as the Estate will be taxed according to your certificates.
When evaluating articles:
Work according to a system. Ensure that your article has been professionally cleaned before you start, check the gold content/metal where no stamp is visible, etc. Do not assume anything unless confirmed visually. The market is flooded with fake pieces stamped gold/silver or platinum. See that the certificates to be issued are clearly worded, typed, or printed, so that no possible misinterpretations can be made.
Certificates should have the following details:
- A reference number
- The full date
- The total valuation amount written in words
- A photo of the piece
- If diamond origin is confirmed a known in new pieces, add the conflict diamond clause as given in the example.
- A full description of each piece with all possible detail mentioned that could affect the value of the article.
- An exclusion clause. This is necessary as even with all the necessary precautions, the valuator still only gives an opinion on a piece, and as we know stones that are already set can produce different opinions and can vary from valuator to valuator.
- All certificates must be signed by the valuator and preferably not “pp” or “signed for” the person who did the evaluation.
Copies of these documents must be kept for five years or longer, as customers and insurers have been known to misplace the certificates.
When a new or duplicate certificate is issued it should be noted as such on the document, to avoid confusion. Note that on the omission of the “duplicate” clause, it can be assumed that the piece has been seen, and re-evaluated even though the customer may have lost it/stolen it in the meantime.
When evaluating articles the following should be noted:
- The kind of metal used, the colour, and carat mass. Note the texture, engraving, and other surface features. In the event of the piece being stamped “Made in Italy” etc., it should be noted that the piece is “Imported from Italy”. Once again, do not commit yourself on paper unless you are 100% sure.
- Note identity of stones, cut, number, etc.
- Diamonds should be evaluated according to the four C’s: cut, carat mass, clarity, and colour. When a laboratory certificate is available, it should be checked against the stone, and it should not be assumed that it is the stone in the mount. Note the relevant laboratory certificate number on your valuation. Also, note that the stone’s mass is estimated by formula if not weighed.
- The gross mass of the article should be documented.
- If coloured stones are evaluated, create your own structure so that you have consistent results, especially if a piece is returned and you have to do it again.
- Link your certificate to the US Dollar and tell the customer to check fluctuation in currency and ask his or her insurance company to link the policy to the exchange rate.
- Pearls should be graded according to a system. The emphasis should be placed on size, shape, thickness of the nacre, surface texture, and colour. Note where possible if the pearls are “cultured”, freshwater, Japanese or Chinese.
- Try to use clear concise terms that all valuators can relate to. There are many “nicknames” for stones and these should be avoided at all costs.
- Have an adequate escalation on the article price to cover inflation for at least 2 years. Suggested: 10-15%. Can be variable (Note your escalation percentage on your certificate as you could be held liable for unnecessary inflated insurance premiums.)
However objective valuations can be, if we have a system we can work according to and we can consistently produce the same results, we can narrow the gap between valuators. It is important that the customer has faith in the valuator, and that our certificates are as close as possible in value. By giving an accurate assessment of an article you do not compromise your “competitive edge”, but rather create respect from your colleagues and trust from the public.
CPM sells lamps, testers, optivisors and other tools needed to complete your valuation successfully. Contact your regional sales representative to order
