New all-digital GIA report

[denverappraiser]

The value add that I see is the picture, which can be used for advertising purposes by people who aren’t as good at taking pictures, and it’s a little bit cheaper. The value lost is that it’s a bit more difficult to match the stone to the grading, especially for a non-expert (ie a consumer) and it doesn’t come with a piece of paper, something that consumers seem to like for their money. I’m not so sure that’s progress for most clients but I guess we’ll see.

I agree with Karl, I think they’re making some mistakes here but I’m just some guy out in Denver. They’re the non-profit center of the universe. The report matching thing is an important concern for consumers and I think it definitely should be addressed. Including an inscription as part of the bundle of services would go a long way towards making people feel comfortable with it. It seems to have worked with the dossier. Personally I think it would a be benefit for consumers and a revenue stream for GIA if they made the paperwork available, for a fee. Think of it this way. An inspection already includes all 4 c’s, a plot, a photograph and an inscription, and an assortment of other data. That is to say, everything on a dossier or a DGR. The difference is the photo. Charge the same as a dossier instead of giving a discount. I don’t know how much it costs them to take that picture but I’ll be it’s mostly offset by the savings of not having to print and handle the piece of paper. The payoff is at the next step. Printing the report weeks, months or years after the stone is returned in no way jeopardizes the public trust but it can trigger a fee of dozens to hundreds of dollars PER STONE. That is to say, a document that’s ’free’ on the day they return the stone, is suddenly worth good money a month later. Maybe even quite a bit of money. It’s not perishable, it has no storage or insurance costs while they wait, it cost nothing extra to produce, and they can have an unlimited number of them available for sale. Merchants kill for products like that. No extra work, no additional costs, and no extra risks to them or their clients. Just a new revenue stream and a bank full of profit. Excuse me, non-profit. The same applies to consumers who have a dossier and would rather have a DGR or even an eReport. Kaching. Just make a new report and an invoice based on data that they already have collected. Keep the inspection date the same so there’s no confusion about when they saw it and when they set the grades. What’s the downside? Start out with a token discount for the first year or two just get people into the habit and help the program take off but it looks to me like a little bit more work to take the pictures and a whole lot more money downstream.

 

[Karl_K]

wow, they are blowing it :{
I hope they read this and reconsider.
I just cant see myself recommending anyone use it with the current rules/procedures.

Karl,

What aspect specifically makes you decide that they are blowing it? I see many aspects that I do not like, but some of these might have value for part of the chain, thus might be defendable.

Live long,

lack of security by not requiring an inscription.

Will insurance companies accept a report # and weight as part of proof of ownership?
A paper report can be used as part of the evidence that you actually owned the diamond.
The way it is now opens the door to insurance fraud and it will be the honest consumer who pays the price when they have a claim and have a hard time getting a settlement.

A lot of people like to have a paper report to put in a safe deposit box.
A lot of people are just more comfortable with something they can hold in their hand, than something on a computer screen.
If it can be converted to a paper report for a small charge it gives both buyers and sellers more options.
They are likely worried about fraudulent conversions but a system could be implemented to make it work.

 

[denverappraiser]

Will insurance companies accept a report # and weight as part of proof of ownership?
No, but possession of a printed report isn’t proof of ownership either. Heck, possession of a diamond isn’t even proof of ownership. Insureds claim, under penalty of perjury that they own and/or have insurable rights in the property they are insuring and if this is proven false then the company can and will prosecute.

A paper report can be used as part of the evidence that you actually owned the diamond.
Nah, digital documentation is just fine for this purpose.

The way it is now opens the door to insurance fraud and it will be the honest consumer who pays the price when they have a claim and have a hard time getting a settlement.
Insurance fraud is a huge problem but I don’t’ think this makes it worse. They could make it better, and there are some digital types of services that might help but I don’t think this is going the wrong way.

A lot of people like to have a paper report to put in a safe deposit box.
True. People love paper. The more expensive the item the more paper they want. Has ANYONE actually read the owners manual for a major appliance like a refrigerator? They provide them nonetheless, we keep them as treasures, and we would feel cheated if it wasn’t there.

A lot of people are just more comfortable with something they can hold in their hand, than something on a computer screen.
Same as the last comment.

If it can be converted to a paper report for a small charge it gives both buyers and sellers more options.
It doesn’t even have to be all that small a charge but I agree that people will feel cheated if the report format ‘upgrade’ costs more than a few dozen dollars without some justification.

They are likely worried about fraudulent conversions but a system could be implemented to make it work.
Fraud is definitely a problem that they need to be attentive to. There’s something to be said for restricting access to ‘genuine’ GIA documents that might be used for nefarious purposes later but this is already a problem with the paper documents. Perhaps limit the number of times a report will go out for a particular stone to one or require the consumer to ‘register’ their stone in order to get the service rather like the software people or automobile manufacturers do. Register and you get some sort of perk. They could even make the registration transferrable (for a fee). That’s yet another revenue stream! People can and do use GIA paper documents to sell or insure the wrong stone. People can make counterfeit documents and they can modify genuine ones. This would actually be significantly more difficult with a digital component. Lack of an inscription certainly makes it easier to imagine a mismatch between the stone and the data, especially with very high grades where the inclusions in the stone are difficult to find or when the most identifying characteristics are on the pavilion side and therefore not visible in the photo (like naturals and extra facets). I’ve no doubt that pros will have little trouble correctly matching eReports to the subject stones in 99.9% of the cases but something tells me this is going to be more difficult for individual shoppers who don’t even have a loupe.

 

[Paul-Antwerp]

Thank you for the replies, Karl and Neil.

Where you both indicate that consumers like and want to receive a paper report, I have the impression that many consumers simply forget to pick up or ask for the report, when they pick up their purchase. And with many stores calling in diamonds from a NY-wholesaler, and them only getting a copy (often a fax-copy) of the report, only to get the original after the sale is final, I think that a lot of consumers go home without the actual paper report. What is your view on that?

Also, Neil, I see you mentioning that a pro will have no problem matching 99.9% of stones to an eReport. I fear that many pros will just take their suppliers' word for it, without going through the actual check.

Live long,

 

[denverappraiser]

Thank you for the replies, Karl and Neil.

Where you both indicate that consumers like and want to receive a paper report, I have the impression that many consumers simply forget to pick up or ask for the report, when they pick up their purchase. And with many stores calling in diamonds from a NY-wholesaler, and them only getting a copy (often a fax-copy) of the report, only to get the original after the sale is final, I think that a lot of consumers go home without the actual paper report. What is your view on that?

Also, Neil, I see you mentioning that a pro will have no problem matching 99.9% of stones to an eReport. I fear that many pros will just take their suppliers' word for it, without going through the actual check.

Live long,

Whether the jewelers actually DO it is a different question. That's true of paper reports too. How dealers mostly do it now is by comparing weight, measurements, girdle treatment and obvious things about the color and clarity. When it gets hard they look at the plot and try and find specific unique features that are either present and not plotted or visa versa. It's not generally that hard with the majority of stones. If the photos are as good as their sample, I wouldn't expect it to be hard using that for the vast majority of stones below, say, VVS2 for someone who knows what they're looking at and who takes the time to go through the process. There are a few that can be pretty difficult with the existing approach as well but a good plotter makes a point to include the most unique features for exactly this reason.

Some customers don't care. The receipt from the jeweler and the statement from the jeweler about what it is is sufficient. Assuming the jeweler provides decent information (like the include the report number on the receipt which can then be checked online), this works just fine. The report from the lab is confirmation and support for the trust being placed in the jeweler. It's not a substitute for it, and it's not necessary for every customer. On the other hand, some people get pretty compulsive about this sort of thing. They want it straight from the source.

It's fairly common for dealers to loan out stones to stores to sell using a consignment system known in the trade as memo. Stones go out on memo for a sales presentation and, if it doesn't sell, it gets sent back where it waits to go out on memo somewhere else. Eventually it sells. It's common for the original report to stay with the wholesaler through this process and only get sent out when it finally sells. Some of this is about shipping efficiency but some is also about keeping the document itself from getting damaged. Those same compulsive people like to have the document in perfect condition when they get it. It's fairly hard to damage diamonds in the shipping and sales presentations but the report itself and/or the little plastic sleeve that contains it are fairly easy to screw up. Obviously for these sorts of people, having the report printed and mailed directly to them from GIA is the best possible solution.

 

[Karl_K]

Where you both indicate that consumers like and want to receive a paper report, I have the impression that many consumers simply forget to pick up or ask for the report, when they pick up their purchase. And with many stores calling in diamonds from a NY-wholesaler, and them only getting a copy (often a fax-copy) of the report, only to get the original after the sale is final, I think that a lot of consumers go home without the actual paper report. What is your view on that?

It will be fine for some people to get the real report later, but some stores in my area have pamphlets about seeing and taking home the actual report with examples on how to tell it is real.
They use it as part of the sales tactic, We own our diamonds, would you want to buy a diamond that the seller don't have enough faith in to buy themselves? is how they approach it. (some stocking online vendors use similar tactics)
That will likely have to change some as the electronic report becomes more accepted.

Also we have had people post on PS being very upset because they never received the actual report just the faxed copy after a sale.

That the NY-wholesaler holds on to the report until the diamond is paid for supports my comment above about a paper report being part of the proof of ownership.
I think that can be worked around as the report becomes more accepted.

I think having the option of getting a paper report at low cost is going to be important to it getting accepted in the near term.
I think it is important for consumers and sellers to have that option.
The paper can be very important when dealing with insurance and for resale on the secondary market.
If a client is more comfortable with a paper report the seller can work with them on it and still make the sale.
75% of the cost of a new report and the time factor is a sale killer for these clients.

I don't think that is as big a deal as the no inscription/no security issue however.

 

[Texas Leaguer]

Alot of great points and counterpoints about the security aspects of reports both traditional and new. The public DOES place alot of trust in the jeweler backed up by the expectation of authentic documentation. Afterall, not everyone is a pro-sumer. And while many people want the paper, others might be fine with the digital.

I just think there should be a system that addresses all needs for information in a reasonable, ala carte fashion. I think the new digital report with the photo is a great addition to the menu. I just wish you didn't have to pay the cost of a meal for each entre.

I would be very interested to get Paul's perspective as a manufacturer on his perceived value of buying the e-report vs a full or dossier.

It actually might be a brilliant play by GIA if the manufacturers say, "Hey, I can save 10% by getting the e-report for all my goods, AND I get the digital image which enhances distribution efficiency. If the jeweler or consumer want the paper/plot/inscription, let them send it in to GIA and buy it. That's their business."

It might turn out to be a bonanza for GIA in extra "non-profit".

 

[Yesshewill_Custom]

I believe in general, the world is moving more and more towards paperless, why not GIA reports too? The GIA name has enough clout to carry the trust of both retailers and consumers.

 

[oldminer]

The GIA could ahve made their normal, full report and their Dossier report Digital if they wanted to and let the price be 10% less with a 20% added cost for a paper report whenever it was requested. This would serve the purpose of using less paper, ease of transmitting information and allowing the final purchaser to get a very fresh, unwrinkled, undamaged grading document at the time the diamond sells to a consumer. No dealer needs paper reports. Consumers and insurance companies may like or want them, but the existing reports fill the needs of the industry. A digital image which has sufficient depth of field to allow replacement of the hand drawn clarity plot would likely be welcomed and likely would save the lab some time. It also would add more consistency to the way the clarity features are depicted since hand drawing often gives a distorted image of what the inclusion look like where a photo of the right high definition and depth of field might be better.

It could be that GIA will re-think this offering or they might find dealers like it enough to make the effort to have yet another "official" report. I think it is mirroring the lack of direction AGSL may have been showing with its myriad varieties of reports yet having a small portion of market share regardless of the multitude of offerings. Nothing at all wrong with a digital image of sufficient clarity to replace clarity plotting. However, a reasonable upgrade to paper report cost, but not a 75% upgrade cost would be a whole lot smarter, IMO. Requiring a customer to return a diamond to get an upgraded report makes no sense in most instances. It ought to be recommended, but not mandatory. They can wave their magic wand over the diamond at a great distance and still get paid for what amounts to a distant blessing of the work they already have done. If a client wants to verify a report today, they can do it by returning the diamond and that ought to be an option, not a necessity.

 

[Paul-Antwerp]

Alot of great points and counterpoints about the security aspects of reports both traditional and new. The public DOES place alot of trust in the jeweler backed up by the expectation of authentic documentation. Afterall, not everyone is a pro-sumer. And while many people want the paper, others might be fine with the digital.

I just think there should be a system that addresses all needs for information in a reasonable, ala carte fashion. I think the new digital report with the photo is a great addition to the menu. I just wish you didn't have to pay the cost of a meal for each entre.

I would be very interested to get Paul's perspective as a manufacturer on his perceived value of buying the e-report vs a full or dossier.

It actually might be a brilliant play by GIA if the manufacturers say, "Hey, I can save 10% by getting the e-report for all my goods, AND I get the digital image which enhances distribution efficiency. If the jeweler or consumer want the paper/plot/inscription, let them send it in to GIA and buy it. That's their business."

It might turn out to be a bonanza for GIA in extra "non-profit".

Hi Bryan,

As per your highlighted question above, I think that you are correct in assessing that it will be the manufacturers who will decide to use or not use this report. And for most manufacturers, a paper report and the plot are overkill, not necessary to make their sale.

In that sense, the onus to get the paper report might indeed shift towards the retailer.

Live long,

 

[diagem]

Alot of great points and counterpoints about the security aspects of reports both traditional and new. The public DOES place alot of trust in the jeweler backed up by the expectation of authentic documentation. Afterall, not everyone is a pro-sumer. And while many people want the paper, others might be fine with the digital.

I just think there should be a system that addresses all needs for information in a reasonable, ala carte fashion. I think the new digital report with the photo is a great addition to the menu. I just wish you didn't have to pay the cost of a meal for each entre.

I would be very interested to get Paul's perspective as a manufacturer on his perceived value of buying the e-report vs a full or dossier.

It actually might be a brilliant play by GIA if the manufacturers say, "Hey, I can save 10% by getting the e-report for all my goods, AND I get the digital image which enhances distribution efficiency. If the jeweler or consumer want the paper/plot/inscription, let them send it in to GIA and buy it. That's their business."

It might turn out to be a bonanza for GIA in extra "non-profit".

Hi Bryan,

As per your highlighted question above, I think that you are correct in assessing that it will be the manufacturers who will decide to use or not use this report. And for most manufacturers, a paper report and the plot are overkill, not necessary to make their sale.

In that sense, the onus to get the paper report might indeed shift towards the retailer.

Live long,

I agree Paul,
And their traveling sales people....
Boy will it offload some weight (and costs) when traveling...