In all industries - real estate, auto sales, mortgages - whatever, you will find business ethics that range from the highest possible down to outright fraud.  The recent news about mortgage fraud and abusive sub-prime mortgages are examples of how some business will exploit consumers.  The diamond and jewelry industry is no different. We find cases of over-grading, under-karating, diamond switching, selling stimulants as diamonds, and misrepresenting the total weight in a piece of jewelry.

We started our company in 1986 and were well aware of all the tricks of the trade that could be used by jewelry sellers to take advantage of the buying public.  This attitude is just not right. We felt that there was a proper way to do things.  In the simplest terms we felt that we had to treat customers as family.  That meant sharing all of our knowledge and using our knowledge and industry connections for the benefit of our clients.  This has been a driving force at our company and it has affected the way that we present products.

We recently had a terrible week that reminded us of some of the predatory actions that some jewelry sellers use to cheat the public.  The following are the situations came to our attention in the past week.

Over-grading
The first case is one of over-grading, meaning that the diamond was graded higher than what it was. Mark walked into our store looking to upgrade his pendant into an engagement ring. When we were assessing the color of the diamond by comparing it to the Master Color Set it was clearly evident to us and Mark that the color of his diamond was in the M-N range. (www.thediamondspecialistsinc.com/diamond-color.php) He produced a receipt that stated that the color of the diamond he purchased was an H color. This is 5-6 grades higher than actual. Mark was shocked and disappointed that the grading could be so off. He purchased the diamond pendant for $1000. A more reasonable price for the diamond should have been $350 -$500.

We are fully aware of these kinds of problems. To prevent this from happening you should find a store that will give customers a diamond education first before they shown or sold any diamond. Get to see the loose diamond under the microscope, compare it to the Master Color Set before it is mounted in the setting.

Over-graded Certificates
The second situation was a misrepresentation of the diamond grading. The consumer was taken advantage of by using inaccurate third-party documentation. John came into our store looking to mount his diamond and asked us determine the quality of his diamond. We examined it against other certified diamonds and told him it was a J SI1. He then took out and EGL certificate that said it was an 1.02 H VS2. We explained that the grade discrepancy was because not all laboratories grade with the same standards. He then asked what we would have sold this diamond for. We told him that we would have sold it for $4800. John said he had paid $6900.  John was perplexed thinking that he had done well making sure that he had an official grading report. He was very disappointed that it was actually a lower grade at a lower price.
 
We are very cognizant that there are stores that specialize in third-party certification that is not as accurate, making it look like the consumer is getting a good deal. Unfortunately, most of the laboratories use the same nomenclature to describe the diamond’s characteristics but not all of them use the same grading standards. Some of these grading reports are off by as much as four grades. Just because the grading report looks legitimate does not mean that it is. Recent research shows that most consumers know the importance of diamond grading reports and are aware of the prominence of AGS and GIA certificates.  However, the research also shows that most consumers can be talked into accepting a certificate from a lab that was unknown to them or even accepting grades or papers made by the sellers themselves!  Be careful as you may risk losing some money. John had paid $6900 for the diamond which had it been an accurate 1.02 ct.  H VS2 would have been a reasonable price, but as a J SI1 he had paid too much. A more reasonable price for what it was would have been $5000. We would recommend finding a store that will show diamonds that have grading reports by AGS or GIA.

Diamond switching
The third incident was a case of diamond switching.  Jane entered our store and wanted to put the diamond from her pendant back into her original ring. We removed her diamond in front of her and in the process of remounting her diamond into the ring we discovered that it did not fit. She said that her original diamond was a one carat diamond. Weighing it we found it to be 0.60 carats. The diamond had been switched. She expressed her sadness saying that this was the only diamond she had ever owned and now it was not what her husband bought for her. What made matters worse is that it was switched fifteen years before by her husband’s friend.

We understand the sentimental nature of our customer’s jewelry, especially the diamond in their wedding rings. To assure customers that the diamond they receive back after a repair or remounting is theirs, you should find a store that would make a plotting of their diamond and that they get to confirm it under the microscope. They should receive a copy of the plotting and are shown the diamond again to match the plotting when they return to pick it up, before they leave the store. This way they can be assured that they received back their diamond.

Selling a fake
The fourth situation is possibly the worst; it is selling a fake as a real diamond. James showed up in our store wanting to sell his ring. After assessing it we offered $150. With great indignation he asked why we offered only $150 for his diamond ring. We explained that is was not a diamond but a Cubic Zirconia and proved it to him with a diamond tester and a microscope. He was in dire straits and learning of this deception did not help. He was incensed that someone would actually do something like this. Apparently he purchased it as a diamond and paid $3000 for a ring that may have only cost $200 to produce. Whoever sold the ring made a huge profit.

In this case the best scenario is that he should have educated first. He should know how to identify the different characteristics of a diamond and confirm its grade with accurate third party grading reports by either AGS or GIA. Certificates will confirm that it is a diamond. If it was a diamond without a certificate he should be able to compare diamonds under a microscope against diamonds with grading reports, and be able to assess the color with a Master Color Set.

It is disappointing and saddens us to see these kinds of deception happening in our industry. Being aware of these problems we have tried address and resolve it by showing and educating the consumer as we would do to help a friend. With more consumer education and awareness these types of cases will less likely happen.  We as a store strive to give the consumer full peace of mind knowing what they bought based on accurate documentation or visual confirmation.  We only wish all of the members of our industry do the same. In the meantime, buyer beware!