Fine Jewelry vs. Luxury Bags: Why is Jewelry Winning Consumers’ Hearts?
Pop quiz!
Which alternative investment offers better returns: luxury bags or fine jewelry?
A 2022 Credit Suisse report found that luxury bags outperformed, rising 16% in value compared to jewelry’s 4% in the same period.
The report also indicated that luxury bags were more resistant to inflation and showed lower volatility compared to other collectible asset classes. Luxury bags were projected to be a wise investment for collectors in the following 12 months. Heritage brands like Hermes, Chanel, Goyard, and Louis Vuitton are expected to retain value if kept in excellent condition.
Luxury bags have occupied first place as symbols of success for some consumers due to their exclusivity and scarcity. Leading to a “Buy-and-hold” mentality that incentivizes consumers to treat bags as an investment like art or other collectibles. Rebag found that Hermes bags possessed a value retention of 90%. That’s why a $9,000 Birkin bag can be sold for $30,000 or more, depending on the condition.
If analysts are sure luxury bags are the next big thing on the art market, why are fine jewelry companies gaining popularity among consumers who were splurging on bags during the pandemic?
The answer is more apparent than it seems.
The struggling luxury bag sector
According to a Consumer Edge report, multi-luxury platforms declined 22% and single-brand luxury fell 6% compared to January and February of 2024. Wealthier clientele remained loyal to the luxury market, with retailers MyTheresa and Farfetch gaining shares. Conversely, economic strain has forced aspirational customers to save their dollars. Last year, 50 million consumers reduced spending on luxury goods, according to consulting firm Bain.
RBC estimated an average 33% price increase from big brands between 2019 and 2023, a response to consumer demand during the pandemic. However, price fatigue has dampened desires for aspirational consumers who are growing more selective with their purchases. The slump in the 2025 period leaves little room for luxury brands that hoped to recover their losses with price increases.
While the luxury bag market isn’t, and probably never will be, obsolete, this sector of the luxury space has been stalling since the latter half of 2024, with heritage brands such as Gucci, Chanel, and Christian Dior witnessing a decline in sales. Economic hardship and numerous unaddressed consumer concerns have caused a portion of shoppers to turn their sights to fine jewelry brands to fill the void.
Controversy around markups and labor practices
The perceived value of jewelry, which hinges on a consumer’s subjective assessment of a product or service’s worth, has demonstrated greater resilience than the reputation associated with luxury handbags. The prestige of luxury bags has diminished following the Dior and Armani scandal. In July 2024, the Italian Competition Authority initiated an investigation into allegations that workers in certain factories supplying Dior and Armani were underpaid and overworked.
The allegations stated that the working conditions were like those found in sweatshops. The Wall Street Journal investigated the situation. According to the report, the supplier was producing the $2,780 Dior Book tote for $57. Armani bags were reportedly sold to the supplier for $100, resold to Armani for $270, and then retailed at nearly $2,000.
Many consumers felt betrayed by the markups and alleged labor practices. “They are not paying the workers, they are housed in terrible conditions and safety measures deliberately removed from their machinery to make as many bags as possible,” one disgruntled Redditor wrote. “There is no justification for the markups. The book tote design is mediocre at best,” another person commented.
The luxury dream is changing
However, the response to the scandal was symptomatic of a pervasive issue: consumers are starting to fall out of love with the luxury dream. “The scandal has demystified the luxury industry. People aren't falling for the allure anymore,” commented one disappointed consumer. “I gradually stopped believing in the luxury dream since Balmain made those high-priced ripped t-shirts,” wrote another. “Are we pretending to be surprised? I thought it was common knowledge that their products are insanely overpriced,” a user concurred on the r/europe Reddit forum.
While fine jewelry can be associated with heritage brands, these precious metals can be purchased anywhere. It can be handmade by the local jeweler, thrifted, inherited, or crafted by the consumer. The value of a luxury bag is often dependent on the item’s association with big-name brands, particularly in the auction or resale market.
Brands like Chanel typically see higher resale values when their products hit the resale market. However, sellers generally earn more from selling a vintage Classic Flap than a Jacquemus Le Chiquito Shoulder Bag. A Classic Flap made with lambskin leather and gold hardware has a retail price of $11,300 and tends to sell for between $5,000 and $10,000 on the resale market. In comparison, the women’s Le Chiquito leather shoulder bag retails for $1,190 and generally sells between $450 and $750 on resale platforms.
Why is fine jewelry becoming more popular?
A well-crafted piece of jewelry can yield a substantial return on investment, with value often derived from superior craftsmanship and materials rather than predominantly brand prestige. For instance, vintage jewelry retailer Maejean currently lists a 10k yellow gold green sapphire engagement ring for $895. Typically, green sapphire engagement rings are priced between $500 - $2,000. The featured ring is not stamped with a luxury brand logo; instead, its resale market value is determined by factors such as materials, craftsmanship, and condition.
A consumer can purchase fine jewelry without subscribing to the luxury dream. Fine jewelry is more accessible than luxury handbags and typically delivers more stable returns, making it an asset for diversifying an investment portfolio. Fine jewelry is timeless and less responsive to rapid trend cycles. Just think about it, even your grandmother’s pearls are a fashion statement.
One Reddit user posted a question to the r/jewerly Reddit forum, asking if jewelry sets ever go out of style. “I don’t think jewelry really goes out of fashion. I would wear that,” one commenter responded. “Sets are always in style,” one Redditor agreed. “I just mix and match my jewelries by metal color,” another supplied. These responses demonstrate that fine jewelry isn’t as quickly abandoned as luxury bags are.
Fine jewelry is less responsive to trends
Trend longevity is less significant for luxury bags. Consumers went crazy over the Balenciaga Hourglass bag, then swiftly abandoned it when it lost the cool factor. The bag retailed for around $3,000 in 2019, but the average resale price on Stock X is $1,800. That price is only valid for customers who managed to sell the bag. Luxury YouTuber Jenee Naylor once remarked in a 2024 collaboration video with Cassie Thorpe that she tried to sell the bag, but was unsuccessful.
Unlike certain styles – such as the chunky statement jewelry popular in the 2010s – which may fall out of favor, materials like durable metals, crystals, and precious stones remain as valuable possessions retained as family heirlooms. In contrast, most luxury bags lack this lasting appeal. Their popularity can be likened to shooting stars; they burn bright and fall fast. Unfortunately, the rapid trend cycle results in market oversaturation both online and in public spaces. Consumers tend to seek the freshest bags to avoid the dreaded “basic bitch” label.
Declining customer service is consumers shoppers off
While the pursuit of individuality is noble, rising customer service issues have made buying luxury bags more difficult. Declining customer service has hurt the luxury sector, with 52% of customers reporting negative experiences, according to Ventrica. The r/handbags Reddit forum is filled with accounts from dissatisfied customers. “I have found Chanel SAs quite arrogant as if they are doing me a favor when it’s me who is spending $$. I prefer Dior over Chanel for the same reason,” one consumer wrote. “Hell, sometimes I get better service at brands that cost $300 not $3000,” commented another Redditor.
Research conducted by Joor found that consumers have become picky about their luxury handbag purchases. Consumers were less likely to purchase bags for over $1,000 and more likely to seek bags for $250-$500. Bag purchases exceeding $1,000 accounted for 3% of the luxury segment, while the proportion of bag purchases in the $250–$500 range has increased from 63% to 70% over the past three years. More consumers are turning to resale sites like TheRealReal due to rising tribulations in the industry.
Quality control remains a problem
Customers refuse to accept a decline in customer service along with ever-present quality control issues. The costs of production and raw materials are climbing, causing some luxury bag brands to outsource labor and make up for lost profit margins with an influx of product. Supply chain supervisors have overlooked or even promoted defects to boost sales. Numerous videos featuring consumer complaints have hit social media, amassing millions of views.
Between 2022 and 2025, numerous individuals posted on platforms such as TikTok to express complaints regarding manufacturer-related issues publicly. In 2022, TikToker Sab Sade posted a viral video of her blue Goyard bag melting onto her white shirt, which reached 8.3 million views. Earlier this year, Marei shared a TikTok video demonstrating the monogram on their Louis Vuitton bag peeling off. The video attracted an audience of 4.2 million viewers. Gracezyzhang expressed her concerns regarding her Chanel bag by demonstrating to her audience that the strap had broken.
Warranties aren’t being honored
Although fine jewelry brands have faced occasional quality control issues—such as influencer mangomoniica's negative experience with Van Cleef in March—these incidents are comparatively uncommon. Many major luxury brands now decline repair requests for damaged items. Brands such as Bottega Veneta, which guarantee a lifetime warranty for some handbags, are becoming rarer. Some established brands, such as Chanel, Louis Vuitton, and Gucci, have returned defective or damaged bags to owners without making repairs.
Most leading luxury bag brands—such as Valentino, Christian Dior, and Gucci—typically offer two-year warranties, limited repair services with exceptions, or sometimes no warranty at all. While a two-year warranty is standard across the industry, how these policies are implemented is like the wild west (every brand for itself). On the other hand, several fine jewelry brands, like Tiffany & Co., give lifetime warranties on engagement rings. Other companies, including Kay Jewelers, Shane Co., Sorrelli, Brilliant Earth, and Blue Nile, also provide lifetime guarantees for their pieces.
Consumers are reevaluating their priorities
As luxury bag brands grapple with mounting criticism over price markups, diminishing craftsmanship, and inconsistent customer support, a growing portion of consumers are questioning whether luxury bags are worth the struggle. The value proposition that once defined the segment has been shaken by a disillusioned landscape fraught with production shortcuts and influencer apology-level accountability, and shoppers are reevaluating the merits of the label “luxury”.
Instead of chasing fleeting trends in an unstable economy, many are prioritizing durability, superior craftsmanship, and excellent customer service. Consumers are accomplishing this goal by seeking alternatives, such as fine jewelry, that better align with their evolving values and expectations. In a climate in which everything feels so up in the air, fine jewelry is starting to feel more luxurious than luxury bags.