Purchasing by reverse auction

It is becoming increasingly common for jewellery to be purchased "on line" from specialist retailers who sell by a technique known as the reverse (or Dutch) auction method. In this scenario the item is usually given an unreasonably high starting value which then decreases with time until a bid is received. If the item remains un-sold when it reaches the target price it is withdrawn from sale. The auction is sometimes referred to as a "game" by some vendors.
There is nothing unlawful about this selling method but it is possible to be taken up by the excitement of it all and assume that because the item had a very high starting price but sold low it must be a tremendous bargain. As an experienced jewellery valuer we know that this is seldom the case.
When it comes to valuing such items there are a number of points that need consideration. First of all the best way of establishing the value of anything is to sell it. Since the item has just been bought by you the "value" has been established to be what you were prepared to pay for it. Insurance is taken out so as to put you back to the same position as before a loss, so all you need to do is insure for the purchase price using the sale receipt as proof. If you loose the item you will get your money back.

All right you say, but suppose I really have a bargain here, what then? Well, if asked to value this sort of item the valuer will take into consideration, as with all jewellery, the market in which the replacement will be made. The answer is that replacement would be from the same vendor charging about the same price. Using his knowledge of the average price paid for such items the valuer is very unlikely to place a much higher value on them than was probably paid in the first place.
Having said all that sometimes, rarely, a bargain does come up. Gemstones occurring in this type of jewellery tend to be of a lower grade than that seen in the average high street jeweller but just occasionally we come across a better than average stone so it is a good idea to have your valuer check your purchases.
The final point is that similar goods will sell for a somewhat different amount each day so the valuer must decide on an average and most likely price. This could well be more or less than the price you paid and almost impossible to get exactly right from your point of view.
We will undertake this work only on the understanding that we must see the sales receipt and that only in exceptional cases is the value likely to be substantially greater than the price paid. The valuer will in effect describe the goods, check that they correspond to the receipt and that the price is reasonable for replacement purposes.