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How Do Experts Value Pawn Jewelry? Your Questions, Answered

There’s a reason why there are over thirty thousand professional jewelry workers found in the United States. We rely on these professionals to deliver the beautiful, and often expensive, jewelry pieces that enrich our lives.

So, why is it when you try to sell your jewelry it’s worth much less than you bought it? This seems to be especially true at pawn shops. So, exactly how do these experts value pawn jewelry?

If you want to learn the answer to this question, and more, you’re in the right place. In this guide, we’ll walk you through everything you need to know about jewelry valuation in pawn shops. Let’s get started!

What’s the Difference Between Jewelry Appraisals and Evaluation?

If you ever tried to pawn jewelry, you were likely offered a lot less than you paid for it. So, how do pawn shops determine value? The answer lies in the difference between jewelry evaluations and jewelry appraisals.

A jewelry evaluation is based on the current market value of the piece of jewelry. You can think of it as the potential profit a buyer might get from selling the jewelry at their shop.

A jewelry appraisal, on the other hand, is the approximate replacement cost of the item. Appraisals are important for insurance purposes. If the piece is stolen or lost, the insurer will need to know the cost of the item so they can replace it.

But, appraisals have nothing to do with jewelry evaluations when you try to sell them. Let’s use an example to understand. You purchase a piece of gold jewelry for $1,000 at a jeweler.

You get it appraised for your insurance and the jeweler says it’s worth $1,000. You go home and keep that appraised piece in a safe for a year.

Then, you take it to a pawn shop, along with the appraisal, and ask for a little less than $1,000. However, the pawnshop offers you less than $150 for it. Why?

Because they’re offering you the price that they’ll get selling it on the open market. The reality is that pawnshops aren’t ripping you off. Instead, it’s the jewelry retailers.

Like new cars, jewelry loses most of its value the second you walk out of the store with it. So, you need to be prepared for this when you try to pawn it.

What Resources Do Pawn Shops Use to Determine Value?

There are many resources that a pawn shop might use to determine value. One way is through blue book databases. These are online databases that give approximate values for certain items.

They may also use auction result databases. This shows what items like it sold for at auction. However, the most common method is through experience. Most pawnshops have been in the industry for a while.

That means they know best in terms of what they can sell an object for. If they aren’t sure of the value of the object, they might bring in an expert to take a look at it. Otherwise, you’re going off of their expertise.

How Do Pawn Shops Value Gold?

Gold does have an intrinsic value, which makes it valuable to pawnshop owners. But, exactly how is gold valued? Dealers will trade 24K (Karat) gold in dollars per ounce.

However, odds are that your wedding jewelry isn’t made of 24K (Karat) gold. This is because this type of pure gold is incredibly soft. So, while it might be shiny and attractive, it isn’t durable as jewelry.

Instead, what most manufacturers do is sell 14K gold. This type of gold is only 58.3% pure. The other 41.7% is different elements like copper. That means that your gold jewelry is likely worth half the current market value of pure gold.

There are plenty of ways to answer the question, is your gold real? The best way is to take it to a seller that specializes in grading it. However, remember that no pawnshop or seller will offer you the full market value of the gold.

For one thing, the pawnshop still needs to make a profit. On top of that, they also need to pay the smelter to melt it down.

How Do Pawn Shops Value Diamonds?

There are four main attributes that pawnshops use to value a diamond: color, cut, clarity, and carat. Sadly, unlike gold, diamonds don’t have any intrinsic value.

When you couple this with the fact that the diamond industry often manipulates the supply of diamonds it’s bad news for sellers. The truth is you won’t get anywhere near what you paid for with a diamond.

The only exception to this is large flawless diamonds. However, these are rare so odds are your piece of jewelry doesn’t contain them.

Pawn Shop or Jewelry Buyer?

If you can find a jewelry buyer or precious metal buyer, you should consider going to them over a pawn shop. Why? Because contrary to popular belief most shops want you to redeem whatever is pawned.

It makes their life a lot easier since they don’t need to find a seller for it. Because of this, they often offer lower prices.

So, if you plan on only using your jewelry for a loan, go with the pawnshop approach. Otherwise, you’re better off going with a professional jewelry buyer.

Enjoy Learning How Experts Value Pawn Jewelry? Keep Reading

We hope this article helped you answer the question, How do pawn shops decide how much to give you? As you can see, when you sell your jewelry to a pawn shop you shouldn’t expect to get anything near what you paid for it.

This is one of the unfortunate things about jewelry: it’s a poor investment. So, while you can get some cash out of it, you should curb your expectations in terms of how they value pawn jewelry. Otherwise, you’re just setting yourself up for disappointment.

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