Fully bonded diamond:

Do bonded jewelers really exist as I get the advice as follows?

This is what you get when you buy a bonded diamond:

1. All bonded diamonds come with a lifetime breakage policy. You bust the stone; the jeweler gives you a new one. (One bust per customer) This is a wonderful policy. Since treated stones tend to be brittle. No jeweler would give you this guarantee unless your diamond is 100% natural.

2. And you're going to love this: all bonded stones come with a lifetime buy back policy. Translation, for the life of the diamond, you can take it back to the jewelers and get 100% of your money back on the diamond!! (Mountings and sales tax not included) How wonderful is this! If you're not 100% satisfied for the life of your purchase you get your money back. Now you might ask, "How can a jeweler afford to do this?" How can he not? Great diamonds are in demand, very liquid and easy to resell. Any jeweler worth his salt will be glad to buy back a good diamond. If a jeweler doesn't want to buy back your diamond, then there was probably something wrong with it in the first place.

3. All bonded diamonds come with an unconditional lifetime exchange policy. This is great! If your fiancee ever gets bored with her shape, your jeweler will allow even exchanges. (You have to pay for resetting fees.)

4. Bonded diamonds come with a lifetime trade-in policy with a fixed appreciation rate to keep up with inflation.

5. Bonded diamonds come with a market crash protection policy. If the diamond market ever crashes and your diamond depreciates, the jeweler will refund the difference between what you paid from the new market value.

6. All bonded stones are guaranteed to be natural and untreated.

Final Comments: If you can find a bonded jeweler, they are the way to go. Dishonest jewelers thrive knowing that it's possible to take a bad diamond and make it look good. But looking good and staying looking good are two different things. That diamond needs to pop as much as the day you bought it as it will on your 25th wedding anniversary. With a bonded diamond, if the diamond doesn't always meet your expectations or surpass it, you get your money back.

Garry Holloway FGAA DipDT

HCA and Ideal-scope developer

http://www.ideal-scope.com and
http://www.HollowayDiamonds.com.au

David S. Atlas

GG(GIA), ASG, Sr. Mbr. NAJA

www.datlas.com

Stan Grossbard
Original Radiant Cut Diamond
www.radiantcut.com

David

Stan Grossbard
Original Radiant Cut Diamond
www.radiantcut.com

I"m with Stan, this is a valid question and it comes up regularly.

As mentioned above, there is exactly one dealer.  This is sort of like observing that there is only one ‘ultimate driving machine’.  This is not a disparagement of BMW's or anyone elses fine products, just an observation of their advertising. 'Fully Bonded Diamonds' is a decent offer but it’s not nearly as fantastic as their advertising suggests. Make no bones about it, Fred's books are advertising. Since this subject comes up and since the 'How to buy a diamond'  book that text in the original question is extracted from actually sells pretty well, let's look at a few of the highlights of bonded diamonds.... 

For starters, notice that in their terms and conditions that there is a 2% recurring annual fee to keep your bond active.  Not that this is all that surprising or even unusual, since bonding is identical to insurance and it’s appropriate that a fee be involved but they do seem to imply in their marketing that this is all a free, or at least prepaid, service.  Their bond covers:

Return privileges for life.  This is a pretty cool offer.  Who's life? Remember that this sort of deal will only last as long as the store making the offer. That's ok but remember that there is no underwriter. I know several dealers who offer this and I’m surprised there aren’t more. Customers love it. Costco comes to mind as a big dealer who makes this offer. A customer return outside of say 5-10 years clearly benefits the dealer anyway since they are buying into inventory at obsolete prices and a return in less than that is effectively the same as you lending them money at zero percent interest as long as they are selling you diamonds that they are willing to take back into inventory. If they get a rush of returns and they don’t have enough cash on hand to cover them, they can dump some of them back on their suppliers and, perhaps, take a small loss (there are some wholesalers who offer this program to the dealers so really all that is being given up in the case of a return is their original markup. It’s still a pretty good offer but I’m not sure I would suggest paying very much extra for it. It doesn’t seem like it would justify the higher prices and the 2% but it depends how much they like this sort of program. There is a restocking fee by the way.

Breakage guarantee.  Yawn.  Assuming you plan on buying a standard insurance policy to cover your other risks, like loss and theft, this is going to be better covered under your other policy anyway because of the restriction of only one replacement per client. As with the above, it’s a nice offer but I wouldn’t recommend that you put a very high value on it.

Guaranteed Quality.  All stones sold by the store meet the stores quality requirements. Whoopie. Every store does this.  Some have more exacting standards than others. The claim that all diamonds sold by others are deficient is clearly false.  Same thing with the guarantee of natural origin.  If they are going to claim that their standards are better, look at the standards and decide if you agree. There's no calories either.

Trade up. This is another pretty interesting offer. Most jewelers offer some version of this without the need for that nasty recurring fee but DCI does seem to have a pretty good program.  As I understand it, you can trade in any undamaged stone for a new one as long as you pay the restocking fee, the fees to pull repair and reset, etc. for as long as you continue to pay the 2%.  It’s not clear to me if you can have an outside jeweler do all that work or if you have to pay them whatever they want for that. That might be fun if it turns out that what you want is something they have for sale.  They also allow you to ‘trade down’ which is pretty unusual for these programs and can occasionally be handy. For the right people, this might be worth some extra money but there is something a little odd about paying extra to be able to trade down and it’s worth considering how much extra you’re willing to pay to get this.  The trade in occurs at what they call ‘market value’ but I’ve never been able to figure out what they mean by that.  I kind of doubt that it is the same as their then current selling prices but, if it is, that’s a pretty slick deal.  Most trade in programs are based on your actual selling price so this might be an interesting improvement on the program that most of them have.

Market Crash Insurance.  I can't figure out what this is, what would trigger a valid claim or how they would process that claim if you had one.  Is it a crash if you find similar stones for less elsewhere at a later date?  Somehow I doubt it.  If the diamond market truly crashes and people are using diamonds to pave their driveways, you can bet that the store, and a whole bunch of other stores, will be history and this guarantee is going to mean bupkis. Other than that scenerio, what's being insured against?

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

There's never a crowd when you go that extra mile.

Stan Grossbard
Original Radiant Cut Diamond
www.radiantcut.com

----------------------
Bill Pearlman
www.pearlmansjewelers.com

There's never a crowd when you go that extra mile.

David

IceMine.com

Garry Holloway FGAA DipDT

HCA and Ideal-scope developer

http://www.ideal-scope.com and
http://www.HollowayDiamonds.com.au

Ana "The greatest experts are only as good as the sum total of what they have seen." [Souren Melikian]

Stan:

One of the facts that makes me very suspicious in this case is that this is not even bonding from a legal perspective.  In constrution and related industries, or for sales of certain items (principally to goverments) it is not uncommon for a vendor to have to post bonding as part of the conditions to do the job or make the sale.  A bond is a guarantee by a 3rd party that they will pay to make good on the conditions of the contract if the original vendor cannot complete the job or is not arround in the future to honor claims on the quality or warranty.  The cost of the bond is included in the price that the customer pays.  It does not happen much, but I have been personally involved in one job where the vendor could not meet their agreed upon contract - and the bonding company then stepped in, took over the work, and brought in another contractor to finish the work.  I hear of similar cases every year or so (most recently the failure of a highway contractor delayed the reconstruction of HWY 12 in Wisconsin, and the bonding company stepped in and hired another contractor to finsih the job).  I recall an example where the bonding company endid up picking up something like a 20 years warranty & service obligation for a major piece of equipment. 

So, "Fully Bonded Diamonds" is not legally "bonded" at all unless they are supplying you with a 3rd party certificate from a company stating that they will make good, or pay off, the claimed actions (from a known and reliable bonding company).  Personally, this is fraud from my part:  Claiming something that does not exist.

In the end this is nothing more than a form of advertising.  We can analyze the pro's and con's of the details but in the end the key to it working is the store being their in the future to honor the terms - and their willingness to honor them.  Where is the guarantee in that?  Given that they are lying about your purchase being "bonded" are you really going to trust that they will honor their claims 5 or 10 years from now?  

 I would rather put my chips on State Farm, Chub, or other major insurance companies being their than on any one store (or even a chain) being arround in a few years.

The history of "lifetime" guarantees and other return policies for diamonds is that they tend to expire the moment your diamond's life is over (as eveidenced by a chip or crack).  Why would I suspect that this offer is any different. 

Perry

Stan Grossbard
Original Radiant Cut Diamond
www.radiantcut.com

Garry Holloway FGAA DipDT

HCA and Ideal-scope developer

http://www.ideal-scope.com and
http://www.HollowayDiamonds.com.au

Wink Jones
GG
Winfield's/High Performance Diamonds

Wink Jones
GG
Winfield's/High Performance Diamonds

 One thing about FC shop is FAST e-mail response.  This makes it very easy to check the statement above...

 Perhaps this is valid business practice, but the very thought is not a pleasant one, not in the very least.

Ana "The greatest experts are only as good as the sum total of what they have seen." [Souren Melikian]

Stan Grossbard
Original Radiant Cut Diamond
www.radiantcut.com

A very interesting thread.

I’m a simple consumer and presently deeply involved with the purchase of a diamond and setting.

I have absolutely no links with any dealer, jeweler or supplier of any kind, other than were my somewhat educated decisions have taken me so far.

I bought a copy of Fred’s book back in November.

He scared me.

I was not comfortable with buying at a local B&M store but Fred scared me regarding buying online.

I felt that I wanted to buy the stone separately from the setting and Fred scared me with his reference to “torquing” and diamond switching etc.

Fred’s book spends far too much time noting the negative side of the industry and relives the nightmares of many in times gone buy.

As a consumer, I want to be enlightened to the dangers and pitfalls, but I still wish to enjoy the experience of making this once-in-a-lifetime purchase. For me, Fred’s book turned my excitement into horror, at least until I discovered other avenues of information.

For me, Joe Blow, these forums are ideal. I get to read other points-of-view - some pc, some not so pc- and draw my OWN conclusions.

The world is full of people who shoot from the hip and others who wish to maintain decorum, even through the most heated of situations. This is what makes the word go around and I want this variety and colour reflected in any given discussion.

I also note from Fred’s book that the price tables seem rather inflated. Now if I put this together with all the horror stories; the dangers of dealing with all the cowboy jewelers and diamond dealers out there, the fact that I can’t seem to locate any other bonded dealers and noting that he provides plenty of contact information throughout, then to me, the book simply says, “go to Fred”.

As a consumer residing in Asia, who had to pay a fair amount for this book, I do not feel it very ethical to be sold marketing material, especially when under the false impression that I was to be reading independent and impartial consumer advice.

My 2 cents.

IceMine.com