There's a difference between wearing a piece that clearly isn't meant to look real, and one that is and fails. This post addresses the latter.
How to pull off costume jewels:
- Don't go too big. This is the biggest mistake people make--they buy something humongous that they could clearly not afford if it were real. The bigger the stone, the less likely you are to have been able to afford it. You want to try and find stuff where the stone is just larger than what the average person could buy, so that it makes an impact without straining credulity.
- Silver tone is easier to pull off than gold. Fake gold shows its wear quicker, and also more often looks "off" in color. Platinum and white gold and silver and surgical steel, on the other hand, are interchangeable enough that the average person isn't going to be able to determine the difference in a cursory glance.
- Look at the craftsmanship. Costume jewelry often looks costumey because of shoddy construction. Examine the piece closely--are the stones set crookedly? Are there little bits of solder where there shouldn't be? Are the prongs straight and even? Is the metal properly polished? You might not consciously register these details, but the eye does catch them, and then the piece reads as cheap. (Incidentally, these are things you should check for when buying real jewelry, too.)
- Examine the cut and color of the stone. I think it's rare that colored costume jewelry is convincing; cubic zirconium, on the other hand, is easy to come by in a decent quality. The cut should simulate a real gemstone; often, costume jewelry has fewer facets in it than a real stone would.
- Wear it casually. Normal people often wear costume jewelry when they get dressed up; it's almost expected. Rich people are insouciant enough to throw diamonds on with a pair of jeans.
- Don't wear too many pieces or fake stones in a single piece. Go for one or two stones at absolute most. Again, if you're dripping in so many fakes that you'd have to be a sheik to afford them all, no one will believe that they're real. A minimalist bezel-set pendant is easier to believe than a pair of chandelier earrings.
- If you can, go for high quality costume. You can get real stones set in sterling; it saves quite a bit of money (gold is at $1500/ounce right now!), and looks very nearly as good. Gold vermeil (sterling plated with real gold) is also a good option, as long as you're wearing the piece only occasionally, since eventually the plating will rub off.
A side benefit to this (the main benefit being that you look nice) is that shopkeepers are more likely to treat you with deference if you're wearing good jewelry. I'm not sure about anyone else, but I enjoy being treated like I could drop several hundred dollars on a whim.