Getting Internet Stones Set - A Solution?

[kenny]

In years past jewelers sold you the both diamond and the ring and then set it for you.

Enter the Internet.
Now a growing number of buyers buy their diamond on the Internet.
Then they may select a setting on the Internet form another vendor.
Then they need someone to set the diamond into the ring.

B&M jewelers don't want to do it.
They are disappointed they didn't make the sale of the diamond or setting.
Based on what I read here they don't like to set stones they didn't sell because it is not profitable.
They even go so far as refusing to cover damage during setting on stones they didn't sell.
I have read here that jewelers can not buy setting coverage
It is a real problem.
Here's the solution:
Jewelers that set stones should self-insure by charging more for the serivce.

Face it; the Internet is here to stay.
There is a growing market in setting whatever customers may carry into a B&M.

Calculate two fees for setting a stone, one with and one without damage coverage.

Charge 10% of the value of the stone to set it, or whatever percentage really covers your risk.
Hypothetically let's say each stone you set is valued at $10,000
If you botch one out of 10 setting jobs you break even.
If you botch one out of 20 you make $9,000, not bad.
You will also refuse to set dangerously flawed stones.
Charge only, say, 5% for VVS medium girdle stones, etc.

Charge an amount that gives you a profit that is high enough so you welcome this new business.
For setting with no coverage charge only, say, 1%.
Educate the customer about the risks.

Why doesn't the marketplace work out this problem?
Are B&Ms just sticking their heads in the sand?
Is the problem uneducated customers that can't understand the risk and pay for it?

 

[strmrdr]

The liability issue has been solved.
JM has stepped up to the plate and will cover them.
When the consumer gets a 1 year policy and the jeweler is covered by a JM policy.

 

[strmrdr]

https://www.pricescope.com/community/threads/poll-about-damage-during-setting.30569/page-4

Towards the end of page 4 of that thread and on page 5 for info.

 

[belle]

Date: 7/9/2005 7:22:45 PM
Author: Feydakin

Date: 7/9/2005 7:04:33 PM
Author: strmrdr
The liability issue has been solved.
JM has stepped up to the plate and will cover them.
When the consumer gets a 1 year policy and the jeweler is covered by a JM policy.

I don''t know that it has been ''solved''..

How many people will like hearing, ''well, I can set your diamond and accept responsibility, but you gotta buy insurance from this one company first''.. It sounds a lot like the ''extended warranty'' sales pitch at Circuit City etc.. Many people have their own insurance coverage already, etc. etc..

I''m not syaing that this is a bad thing, or that JM is in the wrong, it''s nice to see at least one possible solution offered.. But instead of forcing the customer to ''buy'' the insurance why not just cover it under the jeweler''s policy rider??

i totally agree.

 

[strmrdr]

Date: 7/9/2005 7:22:45 PM
Author: Feydakin

Date: 7/9/2005 7:04:33 PM

Author: strmrdr

The liability issue has been solved.

JM has stepped up to the plate and will cover them.

When the consumer gets a 1 year policy and the jeweler is covered by a JM policy.

I don't know that it has been 'solved'..


How many people will like hearing, 'well, I can set your diamond and accept responsibility, but you gotta buy insurance from this one company first'.. It sounds a lot like the 'extended warranty' sales pitch at Circuit City etc.. Many people have their own insurance coverage already, etc. etc..


I'm not syaing that this is a bad thing, or that JM is in the wrong, it's nice to see at least one possible solution offered.. But instead of forcing the customer to 'buy' the insurance why not just cover it under the jeweler's policy rider??

On a new stone purchase they are going to need insurance anyway.
So it isnt really an added expence.
Iv checked rates and JM is in line with home owners insurance riders in my area.
One way or the other the customer is going to pay for it.

Of course covering it under the jewelers policy would be best but there is a solution to the problem that is better than the other solutions avaialble up until now.
I call it solved.

 

[belle]

Date: 7/9/2005 7:28:18 PM
Author: strmrdr


On a new stone purchase they are going to need insurance anyway.
So it isnt really an added expence.
Iv checked rates and JM is in line with home owners insurance riders in my area.
One way or the other the customer is going to pay for it.

Of course covering it under the jewelers policy would be best but there is a solution to the problem that is better than the other solutions avaialble up until now.
I call it solved.

not necessarily. i'm not going to insure a stone that is less than a couple grand. carrying the policy will eventually end up being more than the stone. i do believe that if it is damaged while setting and not in my ownership, it is the jewelers responsibility.
i don't mind paying an extra percentage to help offset the jewelers cost of insurance in addition to the setting fee, i just don't think a policy purchase should be required.

 

[strmrdr]

Date: 7/9/2005 7:39:57 PM
Author: belle

Date: 7/9/2005 7:28:18 PM

Author: strmrdr



On a new stone purchase they are going to need insurance anyway.

So it isnt really an added expence.

Iv checked rates and JM is in line with home owners insurance riders in my area.

One way or the other the customer is going to pay for it.


Of course covering it under the jewelers policy would be best but there is a solution to the problem that is better than the other solutions avaialble up until now.

I call it solved.

not necessarily. i'm not going to insure a stone that is less than a couple grand. carrying the policy will eventually end up being more than the stone. i do believe that if it is damaged while setting and not in my ownership, it is the jewelers responsibility.

i don't mind paying an extra percentage to help offset the jewelers cost of insurance in addition to the setting fee, i just don't think a policy purchase should be required.

In the other thread they were talking about atleast a 1% of the diamonds value fee being needed to cover the jeweler.
That will buy a year of JM coverage in a lot of areas.
So which do you want to pay 1 year of insurance or a couple days insurance?
Same cost.

 

[perry]

Not eveyone insures ever diamond they buy.

I purchased 2) sidestones at 1/4 carat each, and did not insure them. They have been appraised, but have sat in my vaut since (except when I play with them - showing others).

Now to get them set, when I buy the centerstone, I will either have to accept liability for what could just be sloppy work, or buy a separate policy on just those stones.

It was my intention to insure the final ring, not the parts as I was accumulating them.

Perry

 

[strmrdr]

Date: 7/9/2005 8:33:31 PM
Author: perry
Not eveyone insures ever diamond they buy.


I purchased 2) sidestones at 1/4 carat each, and did not insure them. They have been appraised, but have sat in my vaut since (except when I play with them - showing others).


Now to get them set, when I buy the centerstone, I will either have to accept liability for what could just be sloppy work, or buy a separate policy on just those stones.


It was my intention to insure the final ring, not the parts as I was accumulating them.


Perry

When you get the final ring done you can get a policy covering them and the center and the setting and its all covered.

 

[strmrdr]

Would saying a workable solution has presented itself please you better than the word solved?
My jeweler just accepts liability on any diamonds id be willing to buy so I dont have to worry about it.
Because if they are bad enough he would have a problem setting them I wouldnt buy them in the first place.

 

[perry]

Strmrdr:

You have completely missed my point.

The fact that I can insure them as part of the final ring - after they are set in the ring - does not cover them while they are being set.

Now I was one who was willing to pay extra for the jeweler - who by accident, flaw of the stone, or just sloppy work, would potentially chip the diamond.

At this point it seems that I must now purchase a separate policy up front, which may require me to reappraise the diamonds (est 100+ with shipping), in order to demonstrait that I have not damaged them before they can be covered.

Some solution.

Or accept that someone else may have a bad day and chip them and I'm out.

Being they are a matched set of super ideal cuts, with MB fluoresence - that took months to find. I can't just replace them on a whim, and the chance of matching the unchipped stone is almost impossible. I would need to find another matched set.

Perry

 

[strmrdr]

Date: 7/9/2005 9:53:34 PM
Author: perry
Strmrdr:


You have completely missed my point.


The fact that I can insure them as part of the final ring - after they are set in the ring - does not cover them while they are being set.


Now I was one who was willing to pay extra for the jeweler - who by accident, flaw of the stone, or just sloppy work, would potentially chip the diamond.


At this point it seems that I must now purchase a separate policy up front, which may require me to reappraise the diamonds (est 100+ with shipping), in order to demonstrait that I have not damaged them before they can be covered.


Some solution.


Or accept that someone else may have a bad day and chip them and I''m out.


Being they are a matched set of super ideal cuts, with MB fluoresence - that took months to find. I can''t just replace them on a whim, and the chance of matching the unchipped stone is almost impossible. I would need to find another matched set.


Perry

No your missing the solution.

You insure them and the center and the ring with JM before they are set as outlined in Jeff''s posts.
Then they are covered while being set along with the center.

 

[perry]

strmrdr:

Do I still have to reappraise them?

Perry

 

[strmrdr]

Date: 7/9/2005 10:21:31 PM
Author: perry
strmrdr:


Do I still have to reappraise them?


Perry

The jeweler who submits the paperwork can do that for you.
Id just have him use the existing paperwork and add any increases then go with the purchase price of the center stone and setting.
Get the policy.

Then if you wish get an independant appraisal and adjust the policy amount accordingly later.

 

[denverappraiser]

I’m with Storm, the new JM policy has solved the problem. What’s happening now is a haggling over the price.

Under the new JM policy, a client can get an appraisal for the unmounted diamond along with a plan for a ring they the expect to make. It the underwriters approve the policy, they will cover any damage to the ring or the components during the construction in addition to the normal coverage that the client would enjoy on the finished piece. This policy establishes a benchmark for valuing the risk. If the consumer wants to take the risk in exchange for a discount, they are welcome to do so. Similarly, if the jeweler wants to assume the risk in exchange for collecting a higher fee for themselves, or, for that matter, if they want to offer it as a part of a $10 setting fee, they can still do so.

Under the new JM policy, the consumer can use any jeweler they wish for the work and they can negotiate whatever fees they feel are appropriate. If the underwriters approve the policy, I believe that they are covered against damage during setting.

JM commercial policyholders enjoy increased coverage as well. If a jeweler damages a JM insured item, the company has the right to take recourse against the jeweler for their loss. JM commercial policies now protect the jeweler from this risk because the company has agreed that they will not pursue a JM personal policy damage claim against a JM commercial insured client. They will continue to seek damages against non-JM insured jewelers but the consumer claim will be valid either way.

Perry, in answer to your question, no, the company does not require an additional appraisal in most cases. They have not written up the text for this yet but assuming that the final product is substantially similar to the intended design then the policy will be in effect and coverage will apply for the entire year. If you choose to get additional appraisal services because your requirements are higher than the insurance company’s you will always be entitled to do this but it is rarely a requirement. If the final product is different from the original plan then you will be required to submit different documentation. The JM standards for what constitutes acceptable documentation continue to be extremely low.

Steve, The fact that a full third of the respondents to the poll thought this assumption of risk should be a free service is interesting but irrelevant. I can think of lots of things that I wish were free and that don’t turn out to be that way. Again, this is all haggling over the price.

Kenny. I think you're dead on with your last comment that consumers don't understand the problem. Actually, I think a fair number of jewelers don't understand the problem either. Your solution is a pretty good one but I think your proposed pricing structure is a little high.


Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver

 

[strmrdr]

Date: 7/10/2005 10:51:55 AM
Author: crankydave
I too, am not so quick to say ''problem solved''. I will say that JM has stepped up to offer the consumer an option that was not available before. A while ago, JM ''solved the problem'' when they insured the jewelers. I remain cautious, as I do with any ''pilot'' program.


Dave

That is a very good point.
It would be a good idea to verify the policy every so often.
I will feel better when its in writing also.

I think im going to use the term workable solution rather than solved.

 

[denverappraiser]

Date: 7/10/2005 10:51:55 AM
Author: crankydave
I too, am not so quick to say ''problem solved''. I will say that JM has stepped up to offer the consumer an option that was not available before. A while ago, JM ''solved the problem'' when they insured the jewelers. I remain cautious, as I do with any ''pilot'' program.

Dave

The problem that I think has been solved is:

Many customers find that buying a diamond from one source and a mounting from another results in a need to assume some risks associated with the assembly and setting processes that are difficult assess, thereby making it difficult to decide if they are willing to assume these risks.

For many cases, this has already been resolved. The easiest solution is to have the stone set by a jeweler who is willing to assume these risks. Usually this will be the seller of the diamond, the mounting, or both although there are jewelers who are willing to do this as an independent supplier of service alone. For customers who don’t wish to assume the risks themselves, and who can’t find a jeweler who is willing to do it that is otherwise acceptable to them, this whole issue is a problem. It’s been the source of dozens of discussions. JM has solved this. JM insurance is available to almost every customer in the US and by buying a JM policy and complying with it’s terms, the consumers risk will be transferred to the company without regard to what craftsman is chosen to do the work.

I’m not suggesting that this cures all possible difficulties associated with the whole transaction but it does provide an answer to this one. The previous JM attempt to include this coverage in the jewelers policy also solved the problem, at least for the consumers. It was the stockholders that objected and ended the program. Whether this new policy lasts beyond, say, tomorrow will be entirely up to the policy wonks at JM and I’m sure they are carefully watching how it plays out. This solution may not be available forever. There are also still plenty of other issues like choosing a craftsman that will deliver appropriate quality and there is always the issue of deciding if the coverage being offered is worth the price. These are not the same problem that Kenny brought up at the beginning.

I agree with your concern that JM has yet to publish this policy and the devil is always in the details. If what we’ve been told by the JM employees here is not an accurate description of the program then all of this discussion is irrelevant. I too am eagerly awaiting there announcement of the details.

Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver

 

[claimsjeff]

I think Neil has done a nice job addressing any questions, but please let me know if I can answer anything else. Thanks

Jeff Mills
Jewelers Mutual
Vice President Claims

 

[SquareCut]

Why can''t you just have the vendor who sold you the stone set it for you?

 

[oldminer]

JM has provided one way for people like me, who have JM coverage, to offer settting service to consumers who also have JM coverage....True enough. However, people want their work done right away, not after their appraisal has been submitted and approved by JM. Until the poicy is legally in effect, there is not coverage.

The issue of getting the work done right now and not in a couple days remains. The issue for people without JM coverage or for setters without JM coverage also still remains. WOuld a JM insured firm that farms out setting work, such as I do, still be covered, or would JM go after my contractor diamond setter? This was not really clarified.

What remains is a certain degree of risk. People may save thousands buying diamonds for low mark-ups, but may need to pay full price for certain risky services. That''s how the game is often played when you bargain hunt. It isn''t just diamonds.

I see a low degree of risk in setting most well cut diamonds. We therefore do it for a profitable fee, but willingly. If we see a problematic situation we recommend only the original seller of the diamond be allowed to set the stone. So far, so good.

 

[denverappraiser]

Date: 7/11/2005 12:21:53 PM
Author: oldminer
JM has provided one way for people like me, who have JM coverage, to offer settting service to consumers who also have JM coverage....True enough. However, people want their work done right away, not after their appraisal has been submitted and approved by JM. Until the poicy is legally in effect, there is not coverage.

The coverage is offered to the consumers, not the jeweler. They are covered whether or not the jeweler has a commercial policy. If a client objects to the policy because of the delay, because of the price, because of the need for an advance appraisal or any other reason, they aren''t obligated to buy it. I certainly agree that it does seem logistically more difficult than it needs to be. Similarly, if a jeweler like yourself wishes to offer a competitive service that is faster, cheaper or better in any other way they can do it with no problem. This is not the only solution and, in my opinion, it''s not even the best but it has the feature of being available to almost every customer in the US and it is not dependent on the source of the diamond, the source of the mounting or the provider of the labor. It establishes a benchmark for others to compete against. I suspect that in most cases, jewelers who are interested will not find it difficult to make an attractive offer and consumers have a fallback position if they find that they can''t find other appropriate options.

Date: 7/11/2005 12:21:53 PM
Author: oldminer

The issue for people without JM coverage or for setters without JM coverage also still remains.

If the company binds a policy, it''s with the consumer not the jeweler. The consumer is covered against breakage while in a jewelers care. The company may choose to take recourse against the jeweler but this does not affect the validity of the claim.

Date: 7/11/2005 12:21:53 PM
Author: oldminer

Would a JM insured firm that farms out setting work, such as I do, still be covered, or would JM go after my contractor diamond setter? This was not really clarified.

It was clarified. They will go after your contractor unless they are a JM client.

Date: 7/11/2005 12:21:53 PM
Author: oldminer

I see a low degree of risk in setting most well cut diamonds. We therefore do it for a profitable fee, but willingly. If we see a problematic situation we recommend only the original seller of the diamond be allowed to set the stone. So far, so good.

There is no particular reason that selling setting services to the public can''t be a reasonable business that benefits both the jeweler and the customer as long as everyone involved understands what is being purchased. If this JM policy falls apart, I think this will be the reason. The jewelers will happily assume the risk on the low risk stones for a lesser fee and they will leave the company with the high risk situations. The setter who is considering accepting a job is in a far better position to choose wisely than the insurance underwriters who have nothing but a hypothetical appraisal to go on. Different setters will draw the line differently but I think this will result in a disproportionate amount of the problem jobs landing in the lap of JM.

Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver