In our Diamond District storefront, the most common question we probably hear is “what’s this worth?” We always analyze the scrap value of any item brought in, but other professionals will make other considerations. For example, finding a fair valuation for estate jewelry requires a deeper look at the piece and the situation behind the sale. Here, we’ll look at the different types of valuations so you can be better informed when dealing with other precious metal professionals.
As mentioned above, scrap value only considers an item’s worth based on its raw materials after it’s been processed, refined, and recycled. In some cases, not all raw materials will contribute to the scrap value – for example, most buyers aren’t interested in taking small diamonds, or odd cut gemstones. Generally, most consumer scrap jewelry sells for 70-80% of its precious metal value, depending on quality and quantity. At MGS, we’re proud to pay our clients 98-99% of their precious metal.
This applies to items that are only “on the market” for a short time, limiting its exposure to potential buyers. Another way to think of liquidation value is “cash value” – how much ready-cash can an item garner. Not only does the scrap value factor in, but so does the situation of the sale. This value is what pawnbrokers and many jewelers think about when buying used jewelry. Pawnbrokers usually pay 10% or less of that value because they can’t resell your item until the pawn period has expired. Jewelers are more discerning, but they tend to pay a bit more – 10-20% of an item’s scrap value, or more if its high quality and/or it can be easily resold.
Fair Market Value
This is a combination of the value of an item’s materials and its desirability in the most common market. The fair market value is found by estimating the current price for an item of similar characteristics, quality, function, and condition from an establishment selling/specializing other similar merchandise.