Jewelry Scams and Rip-Offs:
How to Protect Yourself
A Consumer Awareness Guide Published By:
Table of Contents
When buying diamonds (as with any important purchase), the more you know, the better able you are to protect yourself from misrepresentation and fraud. What that in mind, here is a brief primer on diamonds:
There are four essential aspects of a diamond that determine its beauty, quality, and value. They are known as "The Four Cs." Traditionally, they are listed in this order: color, clarity, cut, and carat weight.
This is one of the first things people notice when judging a diamond. The closer to "white" (i.e. clear or colorless), the better. However, very, very few diamonds are absolutely water-clear colorless. Those that are, are graded as a "D" color on the GIA (Gemological Institute of America) scale. There is no A, B, or C color. "D" is the best there is, although E and F grades are also considered extremely fine and are often also called "colorless."
The GIA scale runs all the way to Z, with increasing amounts of yellow/brown associated with each letter. (There are several other color grading systems in use, but the GIA is, by far, the most common.)
Diamonds, although rare to begin with, are even more rare if they have shades of blue (like the Hope diamond), or red, green, bright yellow, etc. These are known as "fancies" in the trade and there is no comparable letter scale to grade them.
As a product of nature, very few diamonds are totally flawless. Nearly all contain imperfections, such as tiny black or white specks, minute cracks, grain lines, etc. These imperfections are called "inclusions" if they are internal to the stone and "blemishes" if they are on its surface.
A clarity grade is really a "flaw grade," because the fewer and smaller the number of imperfections, the more fire and brilliance the diamond will have (all other things being equal).
Again, there are many different grading systems in use, but the most commonly used one is the GIA scale:
|Flawless. No visible flaws under 10X-loupe magnification.|
|Internally Flawless. No internal flaws. Only minor external blemishes.|
|Very, Very Slight Inclusions. Very difficult for trained observer to detect.|
|Very, Very Slight Inclusions, although little more than VVS1.|
|Very Slight Inclusions. Flaws only visible under magnification.|
|Very Slight Inclusions, although little more than VS1.|
|Slightly Included. Flaws may be visible without magnification on side or back.|
|Slightly Included, although little more than SI1.|
|Imperfect. Flaws may be seen with naked eye.|
|Imperfect. More flaws than I1.|
|Imperfect. More flaws than I2|
Most diamond buyers avoid the imperfect grades, especially I2 and I3, unless there are compensating factors.
The easiest aspect of a diamond to understand is its carat weight. But note that it is a weight, not a size (some people get that mixed up). A carat, abbreviated "ct," weighs one-fifth of a gram or 200 milligrams.
However, people commonly associate carat weight with a certain size of diamond. They expect a "1-carat" diamond to look a certain way. To some extent this is true, but there are other factors that affect how big a diamond looks, notably cut.
Naturally, carat weight affects price however in a "nonlinear" way. That is, diamond twice as big will cost much more than twice as much. Larger diamonds are rarer and therefore command a higher price (and price per carat).
There are 100 "points" to a carat. Therefore a � carat diamond might also be referred to as a 50 point stone.
In the diamond trade, the cutting and proportioning of a diamond (referred to as "make") are of critical importance. The make of a diamond has an enormous influence on the beauty of the stone. Proper cutting and proportioning releases the fire (intensity and diversity of the rainbow colors seen) and brilliance (sparkle) thats locked in the rough stone.
Cut is the least well understood aspect of a diamond, and most people are unaware of the major differences between well-cut and poorly cut diamonds.
There are few quality standards and criteria governing cut, unlike the standard grades for color and clarity. As a result, diamonds are sometimes purposely cut to a shallow depth, making them appear larger in diameter than a well-cut stone of the same weight. You get a "big look" from these so-called "spread stones" but the diamond appears lifeless. Some sellers mask this by using special high intensity lights to make the diamond seem more lively than it really is. Therefore, you should always check to see how a diamond looks in natural light. A well-cut stone will shine and sparkle even if the lighting conditions are poor.
When purchasing a diamond, always get a "plot" of the stone and a second appraisal from an independent "certified" appraiser. Independent means one with no connection (business-wise or proximity-wise) with the seller.
The diamond "plot" should include a detailed description of the diamonds color, dimensions, exact weight, and clarity grade.
Many people are unaware that a number of techniques are used to improve the clarity of diamonds by removing or hiding imperfections.
Two very common techniques are laser drilling and fracture filling.
Many diamonds come from the earth with tiny black carbon specks inside them. Even if they are hard to see, they tend to scatter light and reduce the brilliance of the diamond.
About 25 years ago, high powered laser beams were first used to "burn-out" these impurities.
To reach the "inclusion," a laser drill is used to create a tiny hole reaching deep inside the diamond. Often the lasers heat will vaporize the speck. If not, acid is poured into the hole, usually dissolving the spot or bleaching it to a less noticeable white color.
Naturally, this process is irreversible. And, since it has become an "industry-standard" procedure, its not usually disclosed by diamond sellers.
However, at Laneys Diamonds & Jewelry, well always tell you about any treatment used to enhance a diamond sold at our store.
The holes are so small in diameter, its very difficult to see that the diamond has been drilled. Still, looking at the side of the stone in very bright light may show some thin "threads."
Diamond grading reports will usually indicate that the stone has been laser drilled.
The Federal Trade Commission has recently revised the "Trade Practice Guides" for the jewelry industry, and surprisingly, has omitted laser drilling from its list of diamond treatments that should be disclosed to the public.
Normally, the FTC requires disclosure if the treatment: (1) is reversible (i.e. not permanent), (2) requires special care and handling (different from an untreated gem), and (3) substantially affects the diamonds value.
Laser drilling is permanent, and the treated gems dont require any special care. However, drilled diamonds are worth less than undrilled ones of otherwise equal size and equal grade.
When youre spending your hard-earned money on a diamond, you deserve to know the truth about what youre buying.
Sometimes, a chemical substance is used to fill small cracks in a diamond. The effect of this treatment can be very dramatic, turning a very "ugly" diamond into one that is remarkably brilliant.
However, all other things being equal, a treated, clarity-enhanced diamond is worth less than one that is naturally beautiful. Theres nothing inherently wrong with gem enhancement, as long as you know whats been done to the stone, and youre not paying for one thing and receiving another.
This makes it important to know how to detect fracture filling.
Luckily, the "dispersion index" of filler material is different from a diamond. Its close, but different enough so that you can detect its presence by rotating the diamond under a bright light. At certain angles, the filler will create a "flash effect."
Two companies in the United States supply most of the fracture-filled diamonds sold: Goldman-Oved Diamond Corporation and Yehuda Diamond Company. Fortunately, they are the "good guys," working to ensure that their products are not misrepresented to consumers.
However, there are reports of hundreds of thousands of fracture-filled diamonds (especially small ones) being surreptitiously released into the jewelry distribution channel. You must be extra-vigilant when the true source of the diamond being shown to you is unknown. This goes double for fractional-carat stones.
There are various chemical coatings that can be used on a diamond to temporarily enhance its color.
Radiation treatments can be applied to off-colored diamonds, turning low-value brownish yellow stones into expensive fancy colored diamonds (pinks, greens, blues, etc.). This is not fraud as long as it is disclosed. However, this treatment is difficult to detect except by a gem lab, and often, the diamonds are misrepresented as natural.
At Laney's Diamonds and Jewelry, our GIA Graduate Gemologists double check every diamond before it is shown to you or placed in our showcases. You can buy with confidence.
Unless you are a diamond expert, you can never be certain about the identification or quality of a stone.
One tip-off is a price thats too good to be true. The actual value of a real diamond is something that can be determined rather precisely. Most legitimate sellers seek only a nominal profit on the sale and are certainly not inclined to sell a diamond for less than they could buy it for.
When a diamond is not accompanied by a grading report, some unscrupulous sellers will represent the stone in an "overly optimistic" fashion with regard to color and clarity grades.
Some will even change the information on the grading certificate to make the diamond appear more valuable than it really is; theyve even used counterfeit certificates.
Most people know that a diamond started life as a lump of carbon (like a charcoal briquette) subjected to intense heat and pressure under the earth transforming it into the hardest (and most desirable) material known to man.
As youd expect, theres been a lot of interest in creating artificial diamonds in a laboratory a form of modern-day alchemy.
Industrial-quality diamonds have been available for decades and are used in grinding wheels, drill bits, etc. Industrial diamonds are small, and appearance is unimportant.
However, after the break-up of the Soviet Union, numerous crystal-growing labs sprang up in Russia and are now producing created diamonds in good qualities and increasing sizes.
Most created diamonds are less than one carat in the rough. Since 30% to 70% of the rough material is removed during cutting, the majority of created diamonds end up as fractional carat faceted stones.
However, the growers have recently started producing rough stones in 3-carat sizes, and we therefore expect to see full-carat (and larger) cut diamonds on the market soon.
Nearly all created diamonds are an intense yellow-orange "fancy" color, due to nitrogen introduced during processing. Theyre very pretty, but the market for near colorless diamonds is much larger than for the fancies.
The crystal growers are working on this problem, and we can expect to see "I" color grades and better (all the way to "D" and "E" in the near future.
Clarity can be very good in synthetics, as high as GIA VS1.
Whereas a synthetic diamond is an actual diamond created in a laboratory, a simulant is a "pretender," another "diamond-like" stone that is substituted for the real thing.
When it first became commercially available many years ago, cubic zirconia (or "CZ") fooled quite a few people. It doesnt anymore, and many can tell its not a real diamond at arms length. Nonetheless, there are some good fakes out there, and you need to be careful if dealing with a seller you dont know well.
Very recently introduced the marketplace, moissanite is an even better simulant than CZ. Its physical and optical properties are much closer to a real diamonds. Not all gem lab equipment is capable of detecting moissanite, although C3, the manufacturer is doing a brisk business selling their $500 detector to pawn shops and jewelry merchants who buy diamonds "off the street."
Opportunities for fraudulent misrepresentation will, no doubt, abound with this new material.
Two commonly "accepted" colored gem treatments are the "oiling" of emeralds and the "cooking" of sapphires and rubies.
Nearly all natural emeralds have extensive internal flaws. The appearance of these stones can be markedly enhanced by placing in a vacuum chamber and immersing them in cedarwood oil. When the vacuum is removed, the oil is pulled into the minute spaces between fracture planes, making them less visually apparent.
This treatment can produce a remarkable change in the appearance of an emerald, greatly enhancing the beauty and clarity of the stone.
However, over time, cedarwood oil can leak out of the stone. It may be necessary to retreat the emerald every few years.
In recent years, several alternative filling materials have come to market. The most famous is "Opticon."
Sapphires and rubies are often subjected to high heat in a gem furnace to improve their transparency and color. A well-known (yet unproven) side effect is diminished durability of the gems.
As opposed to oiling (which has become an "industry-standard" practice), fracture-filling of emeralds and glass-filling of rubies is a controversial, yet also common, practice.
You may have heard of a recent lawsuit that arose over a treated emerald. The NBC program "Dateline" reported on it. The case centered on whether treatment was disclosed to the buyer of a $14,500.00 emerald and diamond ring. Apparently Opticon was used to fill a large fracture in the stone. Theres still debate whether that filler was in the stone when the buyer initially took possession of the ring, or was added later on (by another jeweler).
The buyer won a large award in the settlement. You may not be so lucky. Its more likely that youll just get stuck with an inferior stone and have no recourse.
At Laney's Diamonds and Jewelry, we believe in educating the consumer. We want you to be aware of the common gemstone treatments and their effect on value.
Synthetic (or "created") gemstones are grown in a laboratory instead of being formed in the ground by nature. They are physically and chemically identical to natural-grown gems but cost much less to produce and to buy.
Just like natural gems, synthetics vary tremendously in quality. Using low-quality processes, synthetic emeralds and rubies can be created for less than a dollar a carat, whereas high-quality (or "luxury") synthetics can cost a hundred times more to create and sell for several hundred dollars a carat at retail.
Should you consider buying a synthetic gemstone? This is a difficult question to answer. To some people, nothing can replace the "magic" of owning a beautiful and unique product of nature. To others, what they see is most important and thanks to high-quality suppliers like Chatham Created Gems and J.O. Crystal can own a "museum quality" gemstone at an affordable price.
Many people believe a created gem is as "real" as one taken from the earth, and consider it superior to a natural stone that has likely been treated and "enhanced" by a variety of questionable methods. Still, quality is a major problem, particularly for lower-priced merchandise.
Heres a little background on synthetics, so youll know the right questions to ask.
You dont have to become an expert in synthetic gemstones, but its important to understand what youre buying. If the salesperson in the jewelry store cant answer your questions (or find out from somebody else there quickly), then youre in the wrong place to buy gemstones.
There are many different production methods used to create synthetic gems, but they all fall under two major types: melt growth and solution growth.
Two common melt-growth methods are Verneuil flame fusion (or just "flame fusion") and Czochralski pulled-growth.
The first technology utilized for growing gemstones in a laboratory, flame fusion is still very widely used to create rubies, sapphires, and spinel. Its inexpensive, but yields low quality gems. These created gems are often used in "class rings" and cheap jewelry found in discount stores. Its relatively easy for any competent jeweler to detect synthetics created by flame fusion methods because the "dripped" molten material forms "growth striae" (thin, narrow grooves) as it hardens.
Czochralski pulled-growth is also commonly used to create rubies, sapphires, and spinel. Its a more complex and costly method, and creates better gems than flame fusion.
Still, both these methods yield gems of questionable quality. Because they use very high temperatures, it is difficult for manufacturers to achieve uniform color (particularly in rubies and blue sapphires). The mechanical action of melting and reforming crystals introduces non-uniformities in the gems, which scatter light and give the stone a "dead" look like a piece of colored glass.
Some believe that solution growth leads to higher quality gems than melt-growth. There are two common solution growth techniques: flux and hydrothermal.
In addition to creating the "big three" (emerald, ruby, and sapphire), the flux method is used to grow spinel and alexandrite. This method uses a supersaturated chemical bath to form the crystals. Flux Method or Flux Fusion not to be confused with Flame Fusion creates the highest quality and most expensive synthetic corundum (rubies and sapphires).
High quality emerald, as well as the less common aquamarine, morganite, and beryl, can be lab grown by the hydrothermal method. It uses a water solution at very high temperature and pressure and takes several months to create a batch of gems. Thats one of the reasons higher quality created gems cost so much more.
Whats the difference between a synthetic gem and a fake? A true synthetic or "created" gem has exactly the same optical, chemical, and tangible properties as the corresponding natural gem. Any variation in chemistry removes this correspondence, and the gem cannot be legally called a true synthetic.
Otherwise, it is known as a "simulant," a man-made gem that has a outward appearance similar to a natural gem but is physically, chemically, and optically different. A "fraud."
Only true synthetics can be labeled as such. The Federal Trade Commission regulates this, and only allows a true synthetic to be described by the following terms: Lab-grown, Laboratory-grown, Lab-created, and Laboratory-created. The FTC also allows "trade names" to be used, such as Chatham-Created or Gilson-Created. You may also see "Synthetic" or "Man-made" used as descriptive terms.
Unfortunately, these designations can be used to label cheap flame-fusion created gems as well as the much higher-quality solution-grown stones. As always, be very wary of cheap no-name goods. If you cant determine the pedigree of the stone, dont buy it!
Unlike synthetic diamonds, which are still quite rare, the market has been flooded with substandard created emerald, ruby, sapphires, and purple amethyst. Youre much more likely to find these cheap synthetics in discount stores than your local independent jewelry store.
Unfortunately, a number of gem merchants mislabel and misrepresent colored stones to the buying public. As always, it is best to deal with a reputable seller who will guarantee your purchase satisfaction.
At Laneys Diamonds & Jewelry, we take great pains to comply with all laws and regulations governing gem labeling and disclosure. Youll know exactly what you are buying, and will be fully informed about any treatments or enhancements that have been applied to your gemstone.
Most jewelry sold today is not 100% gold (not even "solid gold" pieces). Pure gold is too soft and easily damaged so it is alloyed with other metals for strength and durability. Pure gold is 24-karat (abbreviated 24K). Here is a handy table listing the amount of gold for in each karatage:
In the United States, jewelry must be at least 10K in order to be sold as real gold. However, in other countries, the karatage requirement is lower. In Canada, the legal minimum karatage is 9K, while in Mexico, it is 8K. You will see the "karat mark" stamped on most gold jewelry. Please dont confuse karat with "carat," which is a measure of weight for diamonds and other gems.
Silver, copper, nickel, and zinc are commonly used as alloying metals. Different combinations and proportions of these elements are used to create different gold colors, such as white gold, or less commonly, rose or green gold. "Yellow" gold remains most popular, and the higher the karatage, the deeper and richer the color will be. Naturally, the higher the karatage, the greater the cost.
U.S. law requires that any piece of jewelry that displays the karat mark also be stamped with the manufacturers trademark or hallmark. Often, the country of origin is stamped as well.
Although the presence of karat mark, hallmark, and origin stamps will give you some assurance that youre getting the gold content youre paying for, be on guard if the piece is priced very low, or youre buying from an suspect source. Recently, 10K (and lower) karatage jewelry has been sold with 14K marks. The absence of a manufacturers trademark should always raise a red flag.
Certainly, the amount of gold in a piece of jewelry is an important determinant of its value and selling price, there are many other factors. After all, youre not buying a small gold ingot. Design, fabrication, detailing, etc. all add value and cost to the piece. Even though most jewelry is constructed using machinery, there are almost always steps that require handwork. If its a custom piece, itll probably be 100% handwork. The more there is, the higher the price.
You dont have to look very hard to find "diamond exchanges" and "jewelry marts" advertising 50% 60% 70% off sales, on a seemingly continuous basis. Can you really get a great buy at one of these places?
Unfortunately, many jewelry sellers (even large department stores) take quite a few liberties with their discount arithmetic. The main issue is 50% off what? Whats the "original" price theyre basing the discount on?
How long has it sold at that original price? How many were sold? How long has the "sale" been running?
The Federal Trade Commission sets specifications for discount basis, rules which most reputable independent jewelers follow scrupulously. Unfortunately, others choose to ignore the regulations and hope to skirt around the law.
If a store doesnt "play by the rules," theres nothing stopping them from doubling the price of an item on Monday, and then declaring a 50% (half off) sale on Tuesday. This is phony discount fraud, and at Laney's Diamonds and Jewelry, we never play that game with you.
For your protection, whenever you buy a piece of fine jewelry, make sure to have the jeweler write a complete description on your sales receipt. If youre buying a diamond, then the carat weight, color grade, clarity grade, size, and dimensions should be listed. For multiple stones, carat weight of the main stone as well as total carat weight including side stones, should be listed. Your jeweler should indicate if the diamond has been treated, drilled, or enhanced in any way.
For colored gems, get an exact description of their color characteristics, as well as dimensions and carat weight. Importantly, get full disclosure of any synthetic or treated stones.
Gold jewelry should always include karatage on the bill of sale.
Some people like to buy things out of catalogs, based on written descriptions and pictures. Others like to be "part of the action" and order the jewelry they see advertised on the shopping channels. However, a large percentage of jewelry purchased "by remote control" gets returned for a refund. Many people are disappointed when their merchandise arrives and doesnt live up to their expectations. Theyre then aggravated by the hassles of having to repackage and reship the goods back to the seller, paying sometimes outrageous "shipping and handling" charges plus the return postage.
Yes, these days, you can buy jewelry with your computer. Some people love the fact that they can "surf the web" and find jewelry for sale. Unfortunately, just about anybody can throw up a web site and start selling jewelry. Many of these "virtual stores" dont even list a physical address. Also, many security experts caution against giving credit card information via insecure connections. Finally, the quality of photographs transmitted over the Internet leaves a lot to be desired. Its hard to know what youre really getting from these low resolution screen images.
The big box stores, the Wal-Marts, K-Marts, Price Clubs, even Sears, all sell jewelry these days. Prices are low, but, of course, you cant expect much in the way of knowledgeable assistance from the sales clerks. And, at best, youll be selecting from a limited offering of "best sellers" thats the nature of a "mass merchandiser." Many people like to feel theyre choosing a piece of jewelry thats a unique reflection of themselves, and dont like the idea that 200,000 other people are wearing the exact same thing they are.
May we humbly request that you consider shopping for your jewelry purchase at our store? Well bend over backwards to help you find that "just right" piece of jewelry. Whether its an indulgence for yourself or a gift that guaranteed to take their breath away, well make sure that youll find exactly what you want.
At Laney's Diamonds and Jewelry, youll find a warm and friendly welcome, and refuge from the maddening crowds. Heres a place where youll be delighted by a vast selection of high-quality merchandise, a place where youll never be pressured to spend more than you expected, and a place where youre sure to find affordable, yet extraordinary jewelry a great value at a great price
Heres a place where youll be delighted by an extensive selection of exclusive designer jewelry, a place where youll receive the personal attention you deserve, and a place where youre sure to find that one extraordinary piece a future heirloom .
Weve located at 5121 Center Street, Suite103, Williamsburg, VA 23188 in Williamsburg, at the corner of New Town Avenue and Center Street , in New Town. Weve been serving the greater Williamsburg community for over 30 years and have become the trusted source for fine jewelry. Were members of the American Gem Society, Independent Jewelers Organization, and the National Association of Jewelry Appraisers.