The Price Of Giving A Gift Of Jewelry This Valentine's Day
As Previously Published on Forbes.com
Diamonds are a girl’s best friend – and never more so than on Valentine’s Day. Across the country, many are hoping to get a sparkly gift from their Valentine love in the form of rings, bracelets and necklaces.
As a Valentine’s Day gift, jewelry is consistently the number one gift given. For Valentine’s Day 2019, the National Retail Federation is projecting over $3.9 billion will be spent on jewelry alone. In fact, 18% of all Valentine’s Day purchases are jewelry. While for some it might be a simple bauble, with romantic expectations high on the holiday, for others it will be an engagement ring or an equally significant piece.
But another interesting trend is emerging as well. The NRF found in its annual survey that 11% of individuals plan on treating themselves to a gift, including jewelry.
“Valentine’s Day this year is especially big,” says Suzy Boshwit, co-owner of Suzy B Jewelry, a private jeweler in New York City. “Either it’s the economy or maybe the #metoo movement as more and more women feel empowered, purchasing for themselves pricier items than ever!”
Regardless of whether you are buying for your beloved or for yourself, the purchase of jewelry can be a complex financial transaction. On one hand, you need to maximize your budget. On the other, you need to protect your purchase. For many, it might be one of the most expensive single purchases they ever make, so the pressure is on to make the right financial decision.
Similar to The Stock Market
Like investing in the stock market, making a significant jewelry purchase requires understanding the marketplace. In fact, the two markets have similarities – buyers want to get the highest quality product for the most cost-effective price. Often in the investment market, individuals seek out financial advisors to help level the playing field. The jewelry market is similar and in working to make the right financial decision on jewelry, it might be prudent to forgo the retail storefronts and meet with a private jeweler.
“The benefits of having a private jeweler like myself is that I help curate the clients’ collection,” says Boshwit. “Private jewelers personally take care of the clients’ every jewelry need throughout their life, ranging from engagement rings, a baby gift for a new mother, graduation gifts, bat mitzvah gifts, holiday, and birthdays”
While working with a private jeweler might seem, as with a financial advisor, something only for the very wealthy, it might be a good way to make a financial decision in a complex market. While not a financial planner, a private jeweler can help manage the financial budgets involved. Nowadays, the financial advice behind jewelry purchases needs to be more informed than simply going with the familiar adage of spending “two months of salary” for engagement ring, as just one example.
“I can stay in budget with a client. I always ask that upfront so that I’m not showing items that are out of bounds,” says Boshwit. “For people buying jewelry, the biggest thing I stress is don’t spend what you don’t have; spend what makes you comfortable without having to borrow money from the bank.”
Often the biggest surprise for those using a private jeweler for the first time is that they aren’t going into a fancy storefront with diamonds in the window. Rather, most jewelers are in offices inside the diamond districts, which also helps buyers mitigate their costs. “A private jeweler can save clients a lot of money, not being a full retail establishment, no advertising, and no storefront,” adds Boshwit.
Ultimately, it means more money towards the jewelry versus the overhead.
Protect Your Investment
Once the jewelry is purchased, additional financial issues need to be addressed. When investing in a significant piece of jewelry, you need to consider what you would do in the event of theft or loss . For many, this can be a source of confusion as to the best way to proceed. The worst thing you can do is just simply assume your homeowner’s policy will cover it.
“Always check your homeowner’s policy to confirm what is and is not covered and what are the coverage limitations,” says Chris Thorndike, President of NorthStar Risk Management & Insurance in Northern California. “Most homeowners policy will provide ‘some’ coverage for jewelry, however, the coverage can be limited and does not include items lost or broken. Your homeowner’s deductible would also apply.”
For items that exceed $10,000 in value, it makes greater sense to actually schedule out your jewelry. What that means is you are specifically listing out each piece of jewelry and its value on a separate insurance policy. While this might result in increased premiums, it also gives greater protections.
“The most common jewelry claims we see are [pieces] stolen or lost while traveling,” says Thondike. “You should consider scheduling any jewelry items of value you would want to replace if lost, stolen, or somehow destroyed. Normally, scheduled items have no deductible.”
Further, you want to make sure that in the event of a loss, you get the right value for it. Most insurers require an appraisal on jewelry valued at $10,000 or more. Further, you need keep the original receipt and take a photo of the piece. In the event of a loss, this documentation ensures that you can make a claim and receive full value for your loss.
All That Glitters
Ultimately a gift of jewelry on Valentine’s Day is a more complex financial transaction than it might appear on the surface. While a private jeweler might seem like an advisor only for the very wealthy, having someone to counsel you on a large financial purchase can be invaluable. Further, once you have spent significant sums on the bauble, make sure you protect it. After all, it might be part of your legacy for the next generation