Maurice Branch, 90, bought the necklace from La Jolla Fine Jewelry in January as a gift for his wife, Helen, ABC News reported Friday.
Branch said he thought he was buying something nice, but inexpensive, for his wife.
"I thought it was a $20 rhinestone bracelet, and that it was pretty," Branch told ABC News. He charged the item on his Visa card and was on his way.
The price difference was noticed by Branch's daughter, Carol, about a month later.
"I saw this $25,000 charge and I said 'Dad, do you know this La Jolla Jewelry?'" Carol Branch said, adding that her father suffers from cognitive impairments. "He said, 'I bought your mom a real pretty rhinestone necklace there for $20."
Carol Branch called the jeweler and explained what happened and asked if the owner, Curtis Gough, if it would be possible to refund the necklace.
However, Gough informed Branch of his store's strict no-return policy.
"At any level, we try to work with customers, but we do have a no-return policy on. It says so on our receipts and in the store. This is a small family business," he said.
Branch and Gough worked out a deal to sell the necklace on consignment in La Jolla Fine Jewelry.
"I would love to have this thing resolved," Gough said. "I'm a designer. This is my life, this is what I do. Certainly I don't need anything like this to go on."