After looting a body, we recently received a 750gp necklace, and were specifically told that it consisted of 250gp of gold, and a 500gp Ruby set into that gold.
That seems remarkably specific, and our first assumption was that the Ruby is the right size to be a component of some particular spell.
But I found various component databases and nothing matches.
Is there any specific use for a 500gp Ruby, beyond "sell it for money"?
There are several spells that use rubies, generally by crushing them.
Continual flame uses 50GP of ruby dust. See Basic Rules, pg. 227
A flame, equivalent in brightness to a torch, springs forth from an object that you touch. The effect looks like a regular flame, but it creates no heat and doesn't use oxygen. A continual flame can be covered or hidden but not smothered or quenched.
Simulacrum uses 1500 gp of powdered ruby. See Basic Rules, pg. 276
You shape an illusory duplicate of one beast or humanoid that is within range for the entire casting time of the spell. The duplicate is a creature, partially real and formed from ice or snow, and it can take actions and otherwise be affected as a normal creature. It appears to be the same as the original, but it has half the creature's hit point maximum and is formed without any equipment. Otherwise, the illusion uses all the statistics of the creature it duplicates, except that it is a construct.
Forbiddance uses 1000 gp of ruby dust. See Basic Rules, pg. 243
You create a ward against magical travel that protects up to 40,000 square feet of floor space to a height of 30 feet above the floor. For the duration, creatures can't teleport into the area or use portals, such as those created by the gate spell, to enter the area. The spell proofs the area against planar travel, and therefore prevents creatures from accessing the area by way of the Astral Plane, Ethereal Plane, Feywild, Shadowfell, or the plane shift spell.
Forcecage uses 1500 gp of ruby dust. See Basic Rules, pg. 243
An immobile, invisible, cube-shaped prison composed of magical force springs into existence around an area you choose within range. The prison can be a cage or a solid box, as you choose.
Sequester, see Basic Rules, pg. 274 also uses ruby dust, using
a powder composed of diamond, emerald, ruby, and sapphire dust worth at least 5,000 gp, which the spell consumes)
And does this.
By means of this spell, a willing creature or an object can be hidden away, safe from detection for the duration. When you cast the spell and touch the target, it becomes invisible and can't be targeted by divination spells or perceived through scrying sensors created by divination spells.
Infernal calling and Summon Fiend also use rubies, but your ruby isn't valuable enough.
You could also arguably use them for magical crafting, or use them for bribery or social things.
In addition to the other answers, a fantasy ruby has the same mundane uses as real ruby; bling.
If you turn up to the king's party without fancy jewellery you will stick out like a peasant, maybe even mistaken for the help!
Roleplay opportunity is often missed in favour of 'what do the rules say'.
As an example my kobold once found 500 x 10gp gems and a wolf skull in the same room. He now wears a helmet made from a gem encrusted wolf skull and looks super cool in his own imagination.
In addition to existing answers, there are spells that require gems or crystals in general, and ruby is both. Here is the list of the spells I found from Basic Rules:
The last one can use your ruby perfectly, and and I find the form of a necklace convenient for Magic Jar.
I'll leave looking up spells from other sources as an exercise to the reader.
There are several spells that require ruby dust as material components:
Your ruby allows 10 casts of Continual flame or it allows to cast Imprisonment for a 1HD creature.
One possibility is that your DM is giving this ruby as part of the components needed for one of the others spells, that has to be cast in a future part of your campaign.
Yet another alternative to the other answers, and one you touched on in your question - selling it for gold.
So the entire necklace is worth 750 gold, and the ruby alone is worth 500 gold.
The ruby weighs very little (let's be nice and say it weight around the same as a single gold piece) - so in rough numbers the ruby is worth 500x it's weight in gold (skipping exchange rates which are covered in other questions).
So how much does this actually mean?
One gold is ~1/3 of an ounce, or 50 gold weighs 1 pound.
500 gold weighs 10 pounds (there's also volume to consider, but again - not worrying about that right now).
Given carry capacity is 15 pounds per point in strength - selling the entire necklace for full value is going to give gold that weighs enough to use up a not inconsiderable percentage of a character's entire carry capacity (and if using the Variant: Encumbrance rules it's 5 pounds per point before you start suffering). In a real world situation 10 pounds is noticeable if being carried - and too much for a belt pouch!
So even without using it for a magical material component - it is a lot more portable than converting it to gold.
