Anytime you try to upgrade an item to add effects there's a chance you might lose an effect already on the item, or all the effects on it. Here is a way to upgrade without worrying about losing effects:

Go to Goren the item enchanter. First press START and select "Exit to Title." This will save the game, now start the game back up. Choose the item you want to upgrade and attempt to enchant it. If the upgrade fails then press the guide button on your controller, press Y and select "Yes." The game will not save and you will have your money and item still as it was before the upgrade.

This is very helpful if you try to enchant an item and it fails, making all the upgrades go away. If the upgrade is successful, then press START and select "Exit to Title." This will save the game with your new upgrade intact. You can repeat this indefinitely.

Note: This also makes the Achievement "Enchantment Overload" very easy as it requires you to successfully enchant an item 10 times.