Fake to jewellery

[Ishback]

I''m not to do the following, just curiosity from me and my colleagues, that are working in a project for an insurance company. We came with that question and we need to solve it!

Imagine someone buys a ring (let''s say 60.000$) in Tiffany''s, with the certificates (I suppose for this price the jewels are certified). At home, the customer changes one diamons for a fake one, and one month after, he goes back to Tiffany''s, and says that he took the piece to a laboratory and the result was that one diamond is fake, and he hasn''t touched anything from the piece. What would Tiffany do?

Is the customer word over Tiffany''s? Do they have an insurance for this cases? Do they have some sophisticated system in order to assure that when the piece leave Tiffany what authentic?

How do they manage these situations?

Thanks a lot!!

 

[purrfectpear]

It is impossible to remove a diamond and reset another stone without it being detected by a bench jeweler.This sort of crap doesn''t even work on eBay

So, to answer your question...yes Tiff''s would notice.

 

[Ishback]

Hi purfectpear; I know that Tiffany would notice that, the thing is what happens next, if I say that I haven''t changed the piece and if it''s a fake, Tiffany''s sold me the piece with the fake diamond. I know that wcould not happen, but how do they solve the situation if someone comes with these arguments? They say just "I''m sorry" or they have any kind of report to demonstrate that when I leave Tiffany''s the piece hasn''t any fake diamond?

If the customer assure that they did, and they assure that the customer did, how can they prove that?

Thanks again!

 

[vslover]

Tiffany''s would know they had their quality assurances put into place and they would tell the customer to stop trying to commit fraud.

 

[Dogmom]

What an interesting first post. Welcome!

 

[purrfectpear]

They don''t have to prove it, and not much would happen next. They would explain to the person that the prongs had been tampered with and that they are not responsible. They''d probably be polite to them (rather than call them the crook that they are) but they would show them the door. If the person wanted to pursue it further through a lawsuit, they would clearly lose.

 

[crown1]

i think that the insurance company you are doing the project for might be able to get you access to tiffany personnel who can help you with the questions you have. i am sure that they are familiar with most tricks used to attempt fraud and would be glad to assist in any way to stop said fraud.

 

[denverappraiser]

What you describe is, of course, a felony and both Tiffany and the police would take this very seriously. To answer your question, each dealer has their own ways of protecting themselves against criminal behavior by their customers and/or employees and the investigators, whether it's the police or the fraud investigators from an insurance company have lots of ways to collect evidence either way. In the end, this would become a matter for the courts.

Although it's an academically interesting question, I think it would be inappropriate here to discuss details of how merchants can and do protect themselves from fraudulent claims like this because the last thing anyone here wants to do is write a tutorial on how to steal from jewelers and discussing details of their defenses or how the police do their work would result in exactly that. We want them to treat us fairly and we should do the same in return. The alternative is chaos.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[RBD hunter]

Very well said Neil.

Might I add....If you are buying for 1K - $60K?

You had better know a little something about what your buying.

Now after a failed engagement
If the GF or BF try''s to sell a 20K ring and finds out from the jeweler that the ring now has a CZ center stone??

One Might have an EX with secret after a break up.

 

[jewelerman]

Date: 9/5/2008 10:04:14 PM
Author: RBD hunter
Very well said Neil.

Might I add....If you are buying for 1K - $60K?

You had better know a little something about what your buying.

Now after a failed engagement
If the GF or BF try''s to sell a 20K ring and finds out from the jeweler that the ring now has a CZ center stone??

One Might have an EX with secret after a break up.

I have actually had this happen in a store I worked at ...A young women came in with her engagement ring(1/2 carat marquise in yellow gold)and wanted the diamond(SI1-G)to be switched for a cubic zirconia...she was breaking up with her boyfriend and wanted to give the ring back...I wished i had the guys phone number to call him before the bench jeweler made the switch....

 

[RBD hunter]

I guess this post would make a good argument for Laser inscribing a diamond with a report number?

 

[simplysplendid]

Date: 9/5/2008 11:05:09 PM
Author: jewelerman

Date: 9/5/2008 10:04:14 PM
Author: RBD hunter
Very well said Neil.

Might I add....If you are buying for 1K - $60K?

You had better know a little something about what your buying.

Now after a failed engagement
If the GF or BF try''s to sell a 20K ring and finds out from the jeweler that the ring now has a CZ center stone??

One Might have an EX with secret after a break up.

I have actually had this happen in a store I worked at ...A young women came in with her engagement ring(1/2 carat marquise in yellow gold)and wanted the diamond(SI1-G)to be switched for a cubic zirconia...she was breaking up with her boyfriend and wanted to give the ring back...I wished i had the guys phone number to call him before the bench jeweler made the switch....

Wow. The boyfriend definitely made a right choice to break up with her.

 

[sonnyjane]

Wow. The boyfriend definitely made a right choice to break up with her.

Off topic, but a close guy friend of mine bought a $60,000 engagement ring for his then fiance. Yeah, you read that properly. She cheated on him and called off the engagement and kept the ring...He was too much of a gentleman to fight to get the ring back, but he had saved for years for that ring... He is now happily married, but his present wife got a very modest 1 ct. solitaire...he didn''t want to make the same mistake twice!

 

[CharmyPoo]

That girl sounds like such a "female dog". In some ways, it is probably a good thing that she cheated on him and ended it. He could be living a life of pain and suffering.

 

[denverappraiser]

I was an expert in a court case that revolved around one of these deals where the gentleman bought a very expensive diamond and the bride to be refused to give it back after the engagement broke off. For obvious reasons I can’t talk about the details but, one of the conclusions at the end was that since the diamond was a gift of considerable value from someone other than a spouse, the recipient owed taxes on it. She didn’t give it back because she he had already sold it for far less than it was worth and spent the money but that’s not the way IRS values these sorts of things. When penalties and interest were added, she owed the government more in taxes than she had received on the sale.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[arjunajane]

Date: 9/6/2008 7:59:28 AM
Author: denverappraiser
I was an expert in a court case that revolved around one of these deals where the gentleman bought a very expensive diamond and the bride to be refused to give it back after the engagement broke off. For obvious reasons I can’t talk about the details but, one of the conclusions at the end was that since the diamond was a gift of considerable value from someone other than a spouse, the recipient owed taxes on it. She didn’t give it back because she he had already sold it for far less than it was worth and spent the money but that’s not the way IRS values these sorts of things. When penalties and interest were added, she owed the government more in taxes than she had received on the sale.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

Interesting, sounds like Karma at work

It seems as if you have witnessed some very intriguing times in your career Neil, I always look forward to when you share your experiences

Clearly a different situation to what the OP is proposing though - Ishback, I''m not sure what type on Ins. Co. you are consulting for, but I seriously doubt that anyone could or would want to develop a policy for this type of thing.
The internal "checks and balances" in place at high end retailers such as T&Co would be enough to resolve this type of situation, that is if someone was foolish enough to try it

 

[EmeraldCutQuest]

OK ... I understand that merchants have their systems to protect themselves.

What about the consumer?

Yes, we assume that most merchants are honest --- but ALL? ALL the time? So, merchant ABC ships a diamond with all the paperwork, certificates, etc. I get the package, have it appraised ... and guess what, it''s a CZ! (This is a hypothetical). I complain to the merchant. They say: " Oh, nooooooooo dear consumer, WE shipped the real thing!"

Now what?

--ECQ. (no longer)

 

[denverappraiser]

Date: 9/6/2008 7:45:40 PM
Author: EmeraldCutQuest
OK ... I understand that merchants have their systems to protect themselves.


What about the consumer?


Yes, we assume that most merchants are honest --- but ALL? ALL the time? So, merchant ABC ships a diamond with all the paperwork, certificates, etc. I get the package, have it appraised ... and guess what, it's a CZ! (This is a hypothetical). I complain to the merchant. They say: ' Oh, nooooooooo dear consumer, WE shipped the real thing!'


Now what?


--ECQ. (no longer)

This concern is one of the reasons for having a credit card company involved in the deal. The burden of proof is on the merchant to convince the credit card company that they shipped what they claimed if a customer protest is filed.

Many of the dealers will also ship directly to an appraiser, without passing through your hands. This protects both them and the buyer. I can’t speak for anyone else but I receive and open such shipments under recorded video surveillance for exactly this reason and I will not agree to receive a shipment from a dealer that doesn't have a researchable history in the industry (I look up their record through the jewelers board of trade. Many of them will do the same with me before they agree to ship).

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[MoonWater]

Date: 9/6/2008 7:59:28 AM
Author: denverappraiser
I was an expert in a court case that revolved around one of these deals where the gentleman bought a very expensive diamond and the bride to be refused to give it back after the engagement broke off. For obvious reasons I can’t talk about the details but, one of the conclusions at the end was that since the diamond was a gift of considerable value from someone other than a spouse, the recipient owed taxes on it. She didn’t give it back because she he had already sold it for far less than it was worth and spent the money but that’s not the way IRS values these sorts of things. When penalties and interest were added, she owed the government more in taxes than she had received on the sale.


Neil Beaty

GG(GIA) ICGA(AGS) NAJA

Professional Appraisals in Denver

Hahahaha, that''s great!

 

[jewelerman]

Date: 9/6/2008 7:59:28 AM
Author: denverappraiser
I was an expert in a court case that revolved around one of these deals where the gentleman bought a very expensive diamond and the bride to be refused to give it back after the engagement broke off. For obvious reasons I can’t talk about the details but, one of the conclusions at the end was that since the diamond was a gift of considerable value from someone other than a spouse, the recipient owed taxes on it. She didn’t give it back because she he had already sold it for far less than it was worth and spent the money but that’s not the way IRS values these sorts of things. When penalties and interest were added, she owed the government more in taxes than she had received on the sale.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

Neil,
i always look foward to your posts.This is a great story...what goes around comes around!

 

[lovegem]

Date: 9/6/2008 8:07:45 PM
Author: denverappraiser

Date: 9/6/2008 7:45:40 PM

Author: EmeraldCutQuest

OK ... I understand that merchants have their systems to protect themselves.



What about the consumer?



Yes, we assume that most merchants are honest --- but ALL? ALL the time? So, merchant ABC ships a diamond with all the paperwork, certificates, etc. I get the package, have it appraised ... and guess what, it's a CZ! (This is a hypothetical). I complain to the merchant. They say: ' Oh, nooooooooo dear consumer, WE shipped the real thing!'



Now what?



--ECQ. (no longer)

This concern is one of the reasons for having a credit card company involved in the deal. The burden of proof is on the merchant to convince the credit card company that they shipped what they claimed if a customer protest is filed.

The situation will resolve because you can do a "chargeback" with the credit card company?? How about if you pay with cash? or wire in some cases like most of us PS'ers?

BTW, interesting court case. I always thought the female has to give back the engagement ring when the relationship ends.

 

[jewelerman]

Date: 9/7/2008 2:17:12 AM
Author: lovegem

Date: 9/6/2008 8:07:45 PM
Author: denverappraiser

Date: 9/6/2008 7:45:40 PM

Author: EmeraldCutQuest

OK ... I understand that merchants have their systems to protect themselves.



What about the consumer?



Yes, we assume that most merchants are honest --- but ALL? ALL the time? So, merchant ABC ships a diamond with all the paperwork, certificates, etc. I get the package, have it appraised ... and guess what, it''s a CZ! (This is a hypothetical). I complain to the merchant. They say: '' Oh, nooooooooo dear consumer, WE shipped the real thing!''



Now what?



--ECQ. (no longer)

This concern is one of the reasons for having a credit card company involved in the deal. The burden of proof is on the merchant to convince the credit card company that they shipped what they claimed if a customer protest is filed.

The situation will resolve because you can do a ''chargeback'' with the credit card company?? How about if you pay with cash? or wire in some cases like most of us PS''ers?

BTW, interesting court case. I always thought the female has to give back the engagement ring when the relationship ends.

If she breaks it off then yes it goes back...if he does she can keep it only if its not a family heirloom...in some states the value of the ring can deturmine if she can keep it.

 

[bee*]

Date: 9/5/2008 8:54:24 AM
Author: purrfectpear
They don''t have to prove it, and not much would happen next. They would explain to the person that the prongs had been tampered with and that they are not responsible. They''d probably be polite to them (rather than call them the crook that they are) but they would show them the door. If the person wanted to pursue it further through a lawsuit, they would clearly lose.

I would have said the same. I can''t see them doing anything but showing the exit door.

 

[denverappraiser]

Date: 9/7/2008 2:17:12 AM
Author: lovegem

The situation will resolve because you can do a 'chargeback' with the credit card company?? How about if you pay with cash? or wire in some cases like most of us PS'ers?

Selling fake jewelry for the real thing is ALSO a crime and, as with the first scenario you considered this would be of interest to the police although this is a problematic and painful case to prove.

The first step in your protection is to choose a dealer you consider to be trustworthy. How do you do that? Talk with them, talk with your friends, read their testimonials here and elsewhere, choose dealers that have been in business a long time, choose stores with a significant investment in their businesses and who have a well established reputation so they have something to lose if they vanish into the night. What makes you comfortable will be up to you. I think your odds of this kind of trouble go way up if you’re shopping with an inexperienced seller who isn’t running an ongoing diamond business.

If you have any doubts at all about your seller, I wouldn’t use cash. There’s just no reason for it anymore in a commercial transaction. If you’re buying from a private party where cash is the right medium, I would require the deal to include an appraiser where the deal is done contingent on their approval. For people in Denver, I arrange an appointment with both the buyer and seller together, and inspect the piece in the presence of both. If the buyer ends up deciding to do the deal, they get presented the piece directly from me, not from the seller. I charge the buyer for this and the charge is the same whether the deal goes through or not so I have no conflict of interest in the deal. Sellers are protected because they are present or in possession of the piece at all times and buyers are protected by having an expert involved on their side of the deal.

Wire transfer comes with protections through the banking system. Wire fraud is serious crime that’s actually tied into the anti-terrorism folks and a charge will get them a visit from the men in black. This leads to the same sort of ‘burden of proof’ issues as with the credit card where they need to demonstrate to the MIB that they delivered on their part of the deal or they end up in a whole world of trouble with the Feds.

In all of these cases, the merchant has the burden of trying to run an ongoing business. Defrauding one customer would be relatively easy but making an ongoing business out of it is going to end up with jail time.

I would not wish to be a jewelers’ first customer for this reason but there are others who would prefer it because the prices from new dealers are often attractive.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[denverappraiser]

Date: 9/7/2008 2:17:12 AM
Author: lovegem

BTW, interesting court case. I always thought the female has to give back the engagement ring when the relationship ends.

Female’s do not always do what they’re supposed to do and broken engagements are not a situation where you find either men or women on their best behavior. There are lots of different scenerios. The general rule is that the ring belongs to whoever paid for it but there are plenty of complications that can come into it. Rarely are relationships simple matters and the ones that end up in court NEVER are.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[cestmoi]

Regarding the tax aspect of things... you're saying that if I gave a diamond ring of significant value to my fiancee, IRS wants a piece of the pie from my fiancee too?! This is preposterous! In my case, I would then be on the hook for the taxable portion of the 'gift' as what's mine is hers and what's hers is hers.

I doubt many people know this!

PS: what is the minimum value at which such a gift would trigger a tax consequence for the recipient? ie. lottery winner hands out money to his/her loved ones?

 

[denverappraiser]

Date: 9/7/2008 9:00:42 AM
Author: cestmoi
Regarding the tax aspect of things... you're saying that if I gave a diamond ring of significant value to my fiancee, IRS wants a piece of the pie from my fiancee too?! This is preposterous! In my case, I would then be on the hook for the taxable portion of the 'gift' as what's mine is hers and what's hers is hers.

I doubt many people know this!

PS: what is the minimum value at which such a gift would trigger a tax consequence for the recipient? ie. lottery winner hands out money to his/her loved ones

You may currently make a gift of up to $12k/year to anyone you want for any reason you want with no tax consequences to either of you. You may gift an unlimited amount to your spouse with no tax effect.

In the usual situation, the ownership to the ring does not change hands until after the wedding actually happens. “With this ring I thee wed…” and all that. Until then it’s effectively a loan or perhaps a deposit on a pending contract, neither of which is a taxable event. After you’re married, she’s your spouse and none of this applies. When it gets sticky is in situations where the man bought the ring or was otherwise clearly the owner, the wedding didn’t happen, the FMV of the ring is more than $12k and the woman didn’t either give it back or otherwise pay for it.

Special note: If you feel this situation applies to you, please do not consider this to be professional tax advice. Talk to a tax advisor, not a jewelry appraiser about your situation.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[EmeraldCutQuest]

Also NOT professional tax advice ...

Gift tax, to my knowledge, is NEVER owed by the recipient -- only by the giver of the gift (if at all).

The courts are full of cases where person A got an engament ring from B. The wedding never happend. Sometimes A breaks it off ... sometime B. Was the giving of the ring a 'completed gift' (i.e., "I give you this -- period."); or a gift 'in contemplation of marriage' (a conditional gift)? I have read cases where regardless of who gave the ring; who broke the wedding off; what was the intent; etc. ... sometimes A wins, sometimes B wins, sometimes the 'value' is split.

Pre-nup, anyone???

--ECQ. (no longer)