How much is my engagement ring worth?

Most people who own a significant piece of jewelry will have received an appraisal certificate with the purchase.

And when it comes to learning how to sell an engagement ring, people often base their expectations on what they will be able to sell it for on the appraisal price.

In reality though, the price that a ring can be sold for will be significantly lower than an appraisal value.

Firstly, one thing to know is that appraisals are almost always higher than the actual value of the ring.

There are a couple of reasons for this, depending on which type of appraisal you have.

Engagement appraisal: replacement value

When a jeweler appraises an engagement ring, they will give a quote for the ‘replacement value’.

This replacement value is the estimated amount of money that it would take to have the item replaced with an identically specced piece of jewelry.

That value can be based on the amount it would cost to buy the precious stones, the precious metals and create the ring, including any custom design or craftsmanship.

Replacement values generally try to take into consideration market shifts in the diamond prices over time – it’s basically an estimation of how much the jewelry could cost in the future. As a result, they are usually higher than the actual purchase price.

However, even allowing for this, the replacement values that are included on an appraisal are often over-stated. Jewelers know that engagement rings are significant expense, so want to make sure that there is no feeling of ‘buyer’s remorse’. They don’t want people to feel like they got ripped off.

The diamond in the appraisal certificate above is 1 carat ’round brilliant’, with SI1 clarity, H color and very good cut, polish and symmetry.

An identically specced ring can be bought today for around $4,500 – a full 25% less than the $6,000 appraisal value:

By providing an appraisal that is higher than the purchase price, jewelers make people feel that they got a great deal and hugely reduce the likelihood that people will have second thoughts and ask for a refund.

This is morally dubious, especially as it means that the buyer then needs to pay more than the ring is really worth for insurance.

What it also means is that if you are basing the amount that you hope to receive for your diamond ring off the replacement value on the appraisal certificate, you may be disappointed as it’s unlikely that the ring was ever actually worth the stated ‘replacement value’ amount.

Engagement ring appraisal: resale value

Resale value is the real number that you need to know for selling a piece of jewelry, but this won’t be included on an appraisal certificate.

Instead, the resale value is the amount that someone will pay for the goods in their current state. This value is generally a “used” price and it’s based on what someone wants to pay for item.

Often the biggest hurdle for a person trying to sell an engagement ring is accepting a resale value that they can live with. In the perfect situation, there’s normally a balance, slightly less money than the seller really wanted and slightly more than the buyer wanted to spend.

How the place you originally bought from may affect how you feel when selling your engagement ring

If you bought from a bricks and mortar then the difference between the ‘replacement value’ listed on the appraisal and the ‘resale’ value that you are offered may be significant, and more than you expect.

This is because diamonds and jewelry at bricks and mortar retailers are generally overpriced.

Compared to online retailers, bricks and mortar jewelers have far larger overheads – staff, rent, stock etc. This means that they need to charge more for their products to cover these. With diamonds, this difference can be significant and the price of a diamond at a chain jeweler can be twice that of an online retailer.

For example, a 1 carat, I color, VS2 clarity cushion cut engagement ring in a 14k solitaire setting is priced at $6,045 at Zales:

If we look at one of my recommended retailers for purchasing an engagement ring, an identically specced diamond costs just $2,830:

The ring from James Allen is the same quality as the ring from Zales, but it less than half the price to buy.

Despite this big difference in original price, these two diamonds would still be worth the same when it comes to selling them.

What this means if you paid a higher original price for your ring, then the difference between your purchase price and the price you are likely to receive when selling and the price you paid will be larger.