How to deal with customers

[youaregold!]

Hi Everyone

I am new here and would appreciate any advice. I sell diamonds on online auctions (mounted) and am having some problems with customers. A few questions-

I have my diamonds certified by the GIA and provide valuations but stil bidders ask me how I can verify the diamonds are what I say they are- what can I do as I thought a valuation and GIA certificate was enough (they are photographed)? Are these customers just being picky or is there anything else I can do to put their minds at ease?

Also I am scared of stones being swapped, scratches appearing from no-where or general complaints on a ring I have sold as seen if a customer decides to return the ring, apart from macro photographs what are my legal rights? (I have been done over in the past).

I understand that buying diamonds as a customer is a big decision and a lot of money, especially on auction sites but I really don''t know much more I can do

Also I am looking to do a diamond grading course so I can grade the diamonds myself- any advice on where to go i.e. GIA, EGL?

Please help

 

[arjunajane]

Hmm..I would go to the GIA to become accredited.
As far as your legal rights, wouldn't your auction site be the ones to ask ?

Personally, I would need alot of trust and reassurance if I were buying a diamond at on online auction. What kind of return/refund policies do you offer? Perhaps you can make the sales final upon an inpection by a completely independent appraiser - that way the buyer knows what they're getting, and if it comes back you will have documents to prove any damage/dishonesty.

Also, seeing as you're technically "in the business", forum guidelines require you to declare this in your signature. You may want to consult admin.

I will leave the rest to others!

also, just fyi about 90% of the members of this forum are customers that buy diamonds online, so starting a post by calling discerning shoppers picky and intimating fraud may not get you a ton of responses..?

That is just my perception.

 

[denverappraiser]

You’ve got some valid concerns and they hold for everyone selling diamonds from one time individuals to the biggest dealers out there. Since this is a consumer forum I’m going to address it toward small time sellers who find themselves needing to sell one or a few diamonds that they don’t need anymore or who are just trying to capitalize on a good opportunity that came up. For .people doing this in a big way, the rules change somewhat.

‘Certification’
For online sales, it’s almost always a good idea to get GIA grading. This mostly resolves the fight over ‘what is it?’ If you’re a regular on this forum you know that there are still some big areas to consider but this gets past the issue of who called it a VS1 or whatever. GIA did. The lab doc also provides a good way of recognizing the stone again. Often there are girdle inscriptions, and there are distinctive things about almost every stone ranging from dimensions to fluorescence to the inclusions on the plotting diagram that can be useful. This helps you as much as it helps the buyer.

‘Valuation'
This is some opinion by a 3rd party of what it’s worth. For the most part, a sensible buyer is wise to ignore whatever you tell them and hire their own expert for this. It often makes for good advertising copy to say that a piece has appraised for a particular amount and sometimes an appraisal will include other information that’s useful to the buyer but the value conclusion is, at best, something they’re going to take with a grain of salt.

Switched and damaged stones.
OK, this is the root of it. If you offer any sort of returns, you open yourself up to the opportunity of fraud by the buyer. How do you protect yourself? The big guys are downright compulsive about this. They have experts that inspect every stone immediately prior to shipping and immediately upon return. They record the whole process on video, use 3rd party surveillance etc. It’s a big deal and a lot of brainpower goes into getting it right. As a small time operator it’s way harder. The easiest way is to stick with local sales and, when you make a deal, do the deal in-person at the office of an appraiser (who usually will be working for the buyer and will be hired for similar sorts of concerns by the buyer). The appraiser can match it to the docs and confirm that it’s undamaged and, if the deal goes south you’ve never lost control of the merchandise.

If your buyer is out of town, like most ebay deals, it’s harder. You can use a 3rd party appraiser as a transfer agent to pack, send and, if needed, receive the return and this mostly solves your issue if you can find an appraiser who is willing to do it and you’re willing to pay the fee. Ask ‘em. You can’t transfer the risk to the appraiser but you can build a winning case this way.

For the most part, the issue will be decided at the credit card company and this is where your burden of proof lies. Let’s look at a scenario. You list a rock, someone buys it, pays with a credit card, you ship it to them, they don’t like it and they ask for a return within your terms. You accept and what comes back is different or damaged. You tell the customer the problem and ask them how they want to proceed. They hit the roof, call you a liar and a thief, and reverse the charges at their credit card company. Now what?

The CC company takes the money out of your bank account and holds it in their own buffer account until it’s resolved and asks you for a written response. The burden is now on you to convince the CC folks that you delivered what you said and that what you got back is different. The buyer will present their own case, you present yours and the company will decide who to give the money to. If you or they are unhappy with the results you then have recourse with the courts, which is expensive and an enormous pain in the behind. Obviously this means that the key is to establish a sufficient case to persuade the CC company that you’re in the right. For a small time dealer, a conversation with your merchant processor or even our own credit card issuer may be helpful. For a big time dealer it’s essential.

Different people have different approaches to this and I would certainly love to hear from some of the dealers about how they do this but I suspect this will fall solidly into the category of business secrets. To a certain extent you are simply assuming some risks by selling to strangers online and to some extent you can design an approach to it by careful planning and judicious use of 3rd party services who can then serves as witnesses in your behalf.

The #1 way to protect yourself is to make local in-person sales only, do sales for cash and with no refunds available (by the way, be wary of personal risks associated making large cash transactions with strangers. Do it at an appraisers office, the bank or some similar secure location. Use good sense).

#2 Don’t accept returns or credit cards and put up with the fact that this will cost you 95% of the potential buyers. Sensible buyers will refuse to buy under such conditions but not everyone is sensible. Some buyers are willing to assume the higher risk you’re causing them in exchange for a lower price.

#3 is to sell only to buyers you know and otherwise trust.

#4 is to use 3rd party services and well thought out systems as part of your shipping procedures. This includes selling on consignment through a dealer who you know and otherwise trust and who already has good systems in place.

#5 is to charge enough that you are willing to take the risk.

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

 

[oldminer]

Offer to have a third party, some independent experts, such as those listed on Pricescope, do a verification service on anything for clients. Make arrangements to get the money after the stone has been verified, but before it was delievered (shipped) by the independent party to your client. There is extra cost involved, but it does not have to be too high to be practical. It will protect you coming and going, even for returns.

 

[youaregold!]

Hi

Thanks for your advice. The only problem is that I have already had my diamonds GIA certified so if I get them appraised again before shipping it will mean I have to pay for two appraisals ( the GIA certificate is free to customers)?

Also I know this is a website predominatly for customers but I am on here for advice from sellers like myself. I have to cover my back aswell, if this offends anyone I''m sorry. I understand that that some people may be offended by the term picky, but when I am giving a full written valuation and a GIA certificate for free I am pretty much left holding my hands up- A minority of customers I think want blood!

Thanks everyone

 

[dockman3]

The GIA certificate is not an appraisal. It is simply a lab report on the diamond. An appraisal will give the customers the peace of mind that the diamond in the ring is the one listed on the lab report and will also give a good indication of the value of the ring. They are two different things, but anyone who buys one of these is probably goign to get it appraised anyway, so I don''t know if you have to offer that or not.

 

[denverappraiser]

Call it ‘free’ if you want. The GIA grading increases the value of the stone and it’s part and parcel of the product you are selling. It protects you at least as much as it protects the buyer. To me it's no more 'free' than the services of the cutter. It's just not separately billed.

The ‘valuation’ that you hire is entirely for your own advertising purposes. That does NOTHING for the buyer although it does help you to set your own prices. You can, of course, write your ads however you want in order to convince people you have what they want but this appraisal is for your benefit, not theirs.

Yes, you will need to pay to protect your interests. You have the option of paying a 3rd party fees to reduce your risks, you can pay a dealer/broker to assume the risks in your behalf, you or your employees can work harder at it to reduce them, you can give the buyer lower prices in exchange for them assuming the risks or you can just put up with the risks and effectively ‘self insure’. Choose one. As you have obviously noticed, you have not solved the problem of the risks associated with dealing with strangers so far and there is no free solution that I know of.

'Picky' customers is what this place specializes in. Naturally, you are under no obligation to cooperate with what shoppers want and they are welcome to shop elsewhere if you don't have policies or products that they like. I have no problem with either side of that.

I don't think anyone is offended at the issue dealer concerns of consumer fraud but it is worth noting that the rules of the forum are slightly different for dealers than they are for consumers and you are treading on the line. You might want to consult with the Admin about how he would like you to proceed just so this thread doesn't get deleted and we haven't all wasted our time. I think this is a valid discussion and of genuine consumer interest because there ARE consumers who sell things and who have these same concerns about their potential buyers.

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

 

[RxTechRN2b]

Denverappraiser has given you some excellent, professional, and *free* advice. It will take a lot more work and expense on your part than simply offering a *free* GIA report with your merchandise if you want to run a professional business that protects you as much as your customer. Ebay is a nightmare for diamond buyers not only because of scammers, but because of sellers (who are obviously far from professional) that have no business peddling products out of their expertise.

 

[arjunajane]

Date: 7/9/2008 9:32:53 AM
Author: youaregold!
Hi

Thanks for your advice. The only problem is that I have already had my diamonds GIA certified so if I get them appraised again before shipping it will mean I have to pay for two appraisals ( the GIA certificate is free to customers)?

Also I know this is a website predominatly for customers but I am on here for advice from sellers like myself. I have to cover my back aswell, if this offends anyone I''m sorry. I understand that that some people may be offended by the term picky, but when I am giving a full written valuation and a GIA certificate for free I am pretty much left holding my hands up- A minority of customers I think want blood!

Thanks everyone

Just trying to answer your queries from the consumers'' POV, Neil has given good advice as always.
And, if you mean by "blood", they want to know they''re getting exactly what they''re paying for with big-ticket items like diamonds, than I don''t think thats unreasonable.
A GIA cert is Not an independent appraisal. If you''re concerned about the cost, I''m sure many would be happy to spend the ~$100, or else just build it into your fee structure?

 

[oldminer]

Years before the Internet blossomed into the sort of place it has become for shopping, I had an idea to create myself as sort of an Escrow Agent who would handle third party diamonds and third party money. Being an intermediary for both sides was the concept. The buyer, consumer, would be the one paying for the services. It would add something to the total cost, like any other service would, but there could be a degree of trust that the diamond would be "as described" and the payment would not need to be made "before verification". Only upon release of the owner would the diamond be sent on to the purchaser.

Now there is a rather good sized network of appraisers with decent credentials who offer similar services. This helps the careful and "picky" buyers out there to get what they want with a high degree of comfort and satisfaction. Many people don't need this level of safety, but for those who want it, it is easy and pretty well organized now.

The seller has a legitimate concern with adding more costs to stones which already have rather low mark-ups and high selling prices. Consumers spending many thousands of dollars tend to be well informed and smart enough to know when to spend a few dollars extra or when to say they feel comfortable. So long as the middleman is independent, recognized as credentialed and trustworthy, the sale is more easily made and not prevented.