Keeping the Sparkle in Gem & Jewelry Purchase—Part II As we discussed in my first piece, when buying jewelry it is very important to find someone who is a gemologist, or who has a gemologist working for them. This is your best assurance of receiving reliable information about what you are buying and its quality. Two of the most respected gemological credentials include the “Graduate Gemologist” title (GG), awarded by the Gemological Institute of America (GIA), and the “Fellow of the Gemmological Association” (FGA), awarded by the Gemmological Association of Great Britain (Gem-A). [Note: the British spelling of “gemologist” and “gemology” is with a double “m”—“gemmologist” and “gemmology.”] Finding someone with gemological credentials is essential. Having said this, however, you cannot assume that just because someone is a gemologist and has the expertise you seek, that they are also trustworthy. There are unscrupulous gemologists just as there are unscrupulous people in every field. The difficulty here is that those with the most extensive knowledge are often the most successful in gaining your trust because they are so knowledgeable and can effectively communicate that to unsuspecting buyers. So how do you find someone who has both gemological knowledge and integrity? First, don’t base your decision on personality or on if you like the seller—“con artists” are called “con artists” because they are so adept at gaining your confidence. To determine if you have found someone reliable requires a three-step approach: if you follow these three steps, you’ll be able to buy with confidence! Keeping the Sparkle in Gem & Jewelry Purchases—Part III As we discussed, the key to buying with confidence is following a three-step approach: 1. Learn what questions to ask If you follow these three steps, you’ll be able to buy with confidence anywhere. While there isn’t enough space here to discuss all of the questions that you should be asking, you can start with the four Cs—carat weight, color grade, clarity grade and cut grade (in all of my books I devote an entire chapter to the questions you should be asking whether buying diamonds, colored gems, pearls, gold or estate jewelry). We’ll spend just a moment, however, discussing one of the most important and least understood of the four Cs for diamonds: cut grade. Cutting is less important when judging colored gemstones, but it is the most important factor affecting a diamond’s sparkle, brilliance and overall beauty. When discussing diamond cut, we are not referring to shape but to many factors affecting the way light travels through the stone and comes back to your eye. Cutting differences can affect the price by 40 percent or more. Today, for round diamonds, the Gemological Institute of America (GIA) includes a cut grade on its diamond grading reports, and grading reports issued by other respected gem-testing laboratories such as the laboratory of the American Gem Society (AGS) and Gemological Certification and Assurance Laboratory (GCAL) also include a cut grade. In any event, if a diamond has a diamond grading report, a knowledgeable seller should be able to tell you what these quality factors are. Basically, whether buying diamonds, colored gemstones, pearls or gold jewelry, the seller should be willing to document the facts—that is, whatever representations have been made pertaining to the identity, weight and quality—in writing, on the sales receipt. If the seller is unable or unwilling to do so, I have only one piece of advice: don’t buy! In cases where they are willing to do so, be sure not to overlook step three: verify the facts. Once you have the pertinent “facts” in writing, the most important thing to remember is not to “assume” that the seller is reliable simply because he/she was willing to put it all in writing—many have learned that most people never bother to get an independent appraisal. We’ll discuss this next time! Keeping the Sparkle in Gem & Jewelry Purchases—Part IV We’ve been discussing the three-step process that you need to follow to ensure you know what you are buying when you buy gems or jewelry. We’ve already discussed the importance of buying only from knowledgeable people with gemological expertise, and the importance of getting—in writing, on the sales receipt—all of the pertinent facts pertaining to the identity and quality of what you are buying. Now we come to the most important part of the process—especially in terms of learning if you are dealing with someone who is knowledgeable and honest—verifying whatever representations have been made. Verification is the key to knowing if you’ve made a good choice in terms of the purchase and the integrity and knowledge of the seller. This requires seeking a gemologist-appraiser who holds respected credentials. You can find such a person by checking with the American Society of Appraisers (www.appraisers.org), the American Gem Society (www.ags.org), the National Association of Jewelry Appraisers (www.najaappraisers.com) or the Accredited Gemologists Association An independent gemologist-appraiser will confirm if the representations are accurate. If so, you’ll feel good about the purchase, and about the seller, too! If not, you’ll have what you need to return the item and get a refund. In either case, you’ll have important information not only about the jewelry, but also about the seller. If you repeat this process with subsequent purchases, it won’t be long before you’ll have a complete picture as to if the jeweler has knowledge and integrity. NOTE: even in cases where stores have posted signs saying “no cash refund,” this does not apply in cases of misrepresentation. Where misrepresentation has occurred, while state laws vary, most require sellers to refund your money or replace the item with another that matches the original representations. Jewelry Insurance: What You Don’t Know Can Be Costly! For most people, nothing is more upsetting than discovering the loss of a favorite piece of jewelry, or worse yet, the theft of many wonderful pieces … nothing, that is, except learning that they are not covered by insurance when you were sure that they were! Unfortunately, this happens all too often. Most people think that jewelry is automatically covered in your general homeowner’s policy, but this is usually not the case. Where jewelry is concerned, your homeowner’s policy provides very limited jewelry coverage, often insufficient to cover the actual value of an important piece such as an engagement ring. To make sure you have the coverage you think you have, you must check with your insurer to learn what their policy is with regard to jewelry. It can vary widely from one company to anther. You must be sure to find out what your policy covers in terms of the maximum amount your insurer will pay, per item, and what the total coverage is in the event you lose multiple pieces from theft, fire or natural disaster. If adequate coverage is not provided in your general homeowner’s policy, you can obtain additional coverage by listing specific pieces on a separate “schedule.” This will require a “replacement appraisal” on each item you want to “schedule,” on the value of which you will pay an additional premium. This will provide the additional coverage you need to ensure adequate reimbursement in the event of loss. In addition to finding out how much your insurer will cover, there are other important questions to ask in order to know exactly what you can expect should you suffer a jewelry loss. Specific coverage differs widely in terms not only of what is covered but in terms of the circumstances under which they will pay, or not pay! Many companies will not reimburse the “full value” on which you’ve been paying your additional premium on the “scheduled” items. Instead, they exercise a “replacement” option by which they offer to replace the item for you, or if you choose not to have them replace it, offer a cash sum less than the amount for which the jewelry is insured. In such situations, most people prefer to have the insurer replace the item for them, so you must have a very detailed appraisal in order to ensure that your item is replaced with one that is truly comparable in quality and value. It is important to ask very specific questions to determine the precise coverage offered. I recommend asking at least the following:
I also recommend keeping a “photo inventory” that can be useful for insurance documentation and with insurance claims. You don’t need anything more than a snapshot that you can take yourself. Simply lay out all of your jewelry on something like a table, and take some color photos from different angles/positions so you can see as much detail as possible. Keep the photos in a safe place such as a bank safe deposit box. In case of loss, theft or fire, a photo will be useful to help you describe jewelry, remember what you had so you’ll know what is missing and can serve as an aid to identification of any piece that may be recovered. Since an appraisal will be needed for each item that is “scheduled” separately on your insurance policy, it is extremely important that you find an appraiser with the right credentials, and gem and jewelry appraisers must have very specialized knowledge and training. They must have respected gemological credentials as well as training in gem and jewelry evaluation. I strongly recommend the following: 1. Get a professional independent appraisal—do not rely on appraisals provided by the seller—and keep it updated. An appraisal is important for four reasons:
Keep in mind that there are no legal requirements to become a jewelry appraiser. Anyone can claim to be one, and many lack the expertise necessary to provide an accurate and reliable appraisal. An appraiser must be selected with care and diligence. Ideally, choose someone in the business of gem identification and appraising, someone who is not primarily in the business of selling gems. 2. Get an appraisal only from a gemologist-appraiser who holds one of the following respected credentials, awarded by one of the following organizations:
With this information, you should now be able to take the necessary steps to ensure you have the insurance you need … and enjoy your jewelry without unnecessary fear of loss. Gems and Jewelry Post New Consumer Threats—Investment Fraud No one in the gem and jewelry industry can deny the reality of the changing marketplace. Recent research shows that sales from online venues such as eBay and Yahoo! are increasing rapidly. It takes less time, is very convenient and is anonymous. Consumers enjoy what appear to be “competitive prices” touted from one site to another. And now “investment” is being recommended, providing yet another way to exploit the unsuspecting, moms included! With worries about recession and devaluing currencies, more and more people are thinking about putting money into diamonds and gemstones (which are also portable if the need arises to sell your home or move elsewhere). I have only one word of advice: CAUTION! And if you are considering buying “investment gems” on the Internet, DON’T! The biggest difference between online vendors and traditional retailers is the degree to which online venues provide opportunities to deceive and misrepresent products, and the difficulties inherent in finding and dealing with vendors who disregard laws and play by a different set of rules. It is even more challenging for consumers because most of you know so little about the product and rely so heavily on what you are learning on the Internet, regardless of the fact that you have no way to judge the reliability of the information on which you are relying. Unfortunately for everyone, unethical behavior is on the rise and the Internet has been the catalyst. Worse, in today’s economy, it has prompted others in more traditional venues to compete in less-than-ethical ways, especially where investment is concerned. Investing in Gemstones and Diamonds and Misleading Lab Reports One thing we are seeing is the use of misleading “laboratory documentation” to create a false sense of seller reliability and product quality assurance. Seemingly legitimate, the professional-looking documentation is usually provided by what appears to be a legitimate lab, one you can even find and check out on the web. Don’t fall for it! Information provided on misleading laboratory documents consistently and calculatedly over-grades the quality and value, misleading you into thinking you’re buying something of much better quality and value than is the case. With the latest “investment” angle, many will never even learn they’ve been cheated until they get ready to sell their “investment gems” in two to five years. Then they will learn that they didn’t get what they thought and overpaid by many times, never able to recover even a small percentage of their investment. Successful gemstone or diamond investment requires careful selection, relying on expert counsel to guide you, one stone at a time. With diamonds and gemstones, investors need to understand that in addition to the normal risks present in any investment, the risk is increased because gems require specialized knowledge about a scientifically complex field. There are many gemstones that are not what they appear to be, and even in cases where you may get the gem you seek, there are subtle quality differences not apparent to the eye which can have a dramatic effect on price. Today’s marketplace brings to mind the age-old saying “caveat emptor” for very good reason—in the gemstone marketplace there are lots of fakes (imitations and synthetics), stones composed of multiple pieces cleverly assembled together, inexpensive gems sold as more valuable gems of the same color and inferior gemstones artificially enhanced to look much better than they are. Being thus warned, perhaps the wisest and safest initial investment for anyone interested in diamonds or gemstones will be to invest in the time it takes to learn more about the dangers as well as the delights of owning objects of beauty that have also historically been storehouses of value.
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