Exercise caution when selling jewelry to pay down debt

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Dear To Her Credit,
We're trying to pay off our credit card balances, and we're looking for things we can sell to free up some cash. What is the best way to sell loose jewels? We have three emerald stones that we would like to sell. Is it worth trying to sell things like that? How can we keep from getting ripped off?  -- Cathy

Answer for the CreditCards.com expert

Dear Cathy,
Selling something of value to pay bills or pay off debts is a great idea. Pam Christian of Yorba Linda, Calif., cashed in her jewelry with a jeweler she has dealt with for years. She was happy with the results. Others have not fared as well. Some people sell jewels only to discover later that they were paid a fraction of what they should have received. Other people do even worse. One woman left jewels to be examined, only to have the store deny the next day that they ever saw her before. Others have left real jewels with a dealer, but received fakes in return!

"Buying from a jeweler is sometimes stressful, but selling to a jeweler is downright scary," says Tampa-based gemologist and author Jessica Kendrick. "A seller's first concern is that they're going to be taken and not get the best price for their gems and precious items."

You have to do your homework if you want to sell loose jewels without risk of getting ripped off. Kendrick recommends that you make sure you know two things before you agree to sell anything:

  1. Know what you have. Take your stones to at least three jewelers to get an idea of what they say they are worth. If you want a current independent appraisal, be prepared to pay for the appraiser's time. You can find an appraiser at  the American Society of Appraisers website. Remember that the appraised retail value is much higher than the amount a dealer will pay you. The dealer must clean and restore the jewels and make a profit. Julie Nash, a master gemologist appraiser and co-author of "Working With Gemstones: A Bench Jewelers Guide," says, "If you or I buy a diamond ring at a retail jeweler for $1,000, a pawn shop, estate dealer or jeweler will likely offer to buy that item for about $200 to $250." Why? "Wholesale jewelry is simply a phone call away for a jeweler."
  2. Know who you are selling to. This is often the hard part! If you have dealt with a jeweler, you are fortunate. If not, stay with a well-known company. Check with the Better Business Bureau as well.

Taking jewels to a jeweler is like taking your old car to the car dealer. It's easy and fast, but you won't get the most money that way. Nash recommends another way: Sell to another private individual. You might even sell it to someone who has admired the piece when you've worn it. "Or if you hear of a young couple looking for a diamond, contact them with a possible solution," she says. "In this case, our theoretical $1,000 piece of jewelry purchased at retail may sell for $650 or $750. This gives the buyer a deal (a discount of 25 percent to 35 percent off the retail price) and gives you a better return."

You can find buyers by placing ads on craigslist.org, eBay, your local newspaper or the bulletin board at work. Of course, you won't advertise the fact that you have a stash of jewels and give your home address! Nash warns, "Do not ever meet a potential buyer that you don't know very well at your home. Meet them at a bank or other public place with security and security cameras."

One more note: Before you part with any old jewelry or loose stones, make sure you are not selling something that is worth more to you or your family members than the cash you will get for it. There are always options for dealing with debts; don't do something rash you may regret later.

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Updated: 03-21-2019