*Red flags* to watch for when buying a diamond

[Dreamer_D]

Very often, people come to pricescope asking for help assessing a diamond that they are considering buying from a B&M, or which they have already bought. This is great, because it means that consumers are seeking to become informed and to protect themselves when making a large purchase. But all too often I also notice that these stories include "red flags" that set my spidey senses tingling, and when such warning signs are apparent, the posters'' stories sometimes end badly or end with lots of hassels trying to get a refund or back out of a deal.

I thought maybe we can list some of the "red flag" warning signs in one place to help consumers spot potenital problems before it is too late. I know I would have saved myself a lot of money if I had known these things about seven months ago!

Here are my top "red flag" warning signs that something may be fishy:

1. The jeweler is a "wholesaler" who sells to the public. No one who is really a "wholesaler" is actually allowed to sell individual stones to the public, and too often, jewelers masquerading as such are simply using the name to cut corners when it comes to accountability in their dealings with consumers.

2. The jeweler will sell you a diamond tax free if you pay cash, and because of that "deal," he or she will not give you a receipt (it''s a paper trail, right?). This is of course illegal, and it leaves you very vulnerable if you ever wanted to return your diamond or if you discovered that the diamond was not what it was represented to be.

3. The price of the diamond if much lower than comparables. If it is too good to be true, it probably is.

Please post your "red flags" too!

 

[MissGotRocks]

This is excellent advice. In a perfect world, the buyers would all find PS before buying, however; it pays to use your head when making such a large purchase. There generally are no ''deals'' - you get what you pay for. Internet buying allows you quite often to get the most bang for your buck but no one is going to sell you a stone thousands of dollars below prices of stones that you can search for here - no matter what the circumstance.

 

[justjulia]

4. No upgrade policy in writing.
5. An upgrade policy that only allows one trade up per lifetime.
6. An upgrade policy that requires spending the original price again.

 

[girlie-girl]

I think people need to watch out for bogus certifications as well. They need to be wary of 'unknown' or 'untraceable' labs.

The one that comes to mind that happened just the other day was with an EDL (European Diamonds Lab) cert. The purchaser was told it was the "top diamond lab in Belgium" yet two of our European diamond vendors hadn't ever heard of the lab. Here's the thread if you want to read the comments etc.

 

[Ellen]

Great thread dreamer!

This is huge red flag about 99.9% of the time.


"So I''m buying from a friend of the family who''s a jeweler".

People think a family friend won''t steer them wrong. But they will, and do. Rarely do we see someone end up with a great stone, at a great price this way. And then if they want to return it, it''s awkward. Please, stay friends and shop somewhere else.

 

[Lorelei]

Date: 6/28/2008 3:43:51 PM
Author: Ellen
Great thread dreamer!

This is huge red flag about 99.9% of the time.


''So I''m buying from a friend of the family who''s a jeweler''.

People think a family friend won''t steer them wrong. But they will, and do. Rarely do we see someone end up with a great stone, at a great price this way. And then if they want to return it, it''s awkward. Please, stay friends and shop somewhere else.

This is a good one that crops up a lot, and ditto what Ellen has said.

 

[Dancing Fire]

i''m buying from a friend of an uncle whose been in the diamond business before the discovery of diamonds.

 

[denverappraiser]

No refunds.

‘Free’ appraisals used to discourage you from doing your own due diligence.

Unusual labs used as evidence of 'certified' diamonds.

No credit cards (even if you don’t intend to use a CC, it’s a bad sign when the dealer won’t accept them)

No researchable history for the dealer.

Ebay


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

 

[kcoursolle]

no return policy or one that is only 24 hours

any type of certification besides GIA/AGS/EGL

a price that seems too good to be true

a pushy salesman or someone who is too anxious to make a sale

a salesman who doesn''t know his/her stuff or discounts your knowledge or another vendor

 

[susiegrneyes]

Also a gut feeling that something isn''t right.

In my personal horror story I had a bad feeling before I even signed the CC slip. If you have any doubts, then don''t buy anything from that vendor.

 

[kcgunesq]

Date: 6/28/2008 2:46:32 PM
Author:dreamer_dachsie
Very often, people come to pricescope asking for help assessing a diamond that they are considering buying from a B&M, or which they have already bought. This is great, because it means that consumers are seeking to become informed and to protect themselves when making a large purchase. But all too often I also notice that these stories include ''red flags'' that set my spidey senses tingling, and when such warning signs are apparent, the posters'' stories sometimes end badly or end with lots of hassels trying to get a refund or back out of a deal.


I thought maybe we can list some of the ''red flag'' warning signs in one place to help consumers spot potenital problems before it is too late. I know I would have saved myself a lot of money if I had known these things about seven months ago!


Here are my top ''red flag'' warning signs that something may be fishy:


1. The jeweler is a ''wholesaler'' who sells to the public. No one who is really a ''wholesaler'' is actually allowed to sell individual stones to the public, and too often, jewelers masquerading as such are simply using the name to cut corners when it comes to accountability in their dealings with consumers.


2. The jeweler will sell you a diamond tax free if you pay cash, and because of that ''deal,'' he or she will not give you a receipt (it''s a paper trail, right?). This is of course illegal, and it leaves you very vulnerable if you ever wanted to return your diamond or if you discovered that the diamond was not what it was represented to be.


3. The price of the diamond if much lower than comparables. If it is too good to be true, it probably is.


Please post your ''red flags'' too!

All red flags for sure. But I''m not sure I agree with your statements of law in #1 and #2.

Although it may be a fair trade act violation for a retailer to advertise themselves as a "wholesaler", this doesn''t mean to me that it is illegal for a wholesaler to sell directly to a retail customer.

Also, while it may be illegal for the seller to fail to remit tax on the sale, it doesn''t mean that the seller can''t price the diamond including tax. Several of the mass market furniture stores in the area run a special every year where they "pay the tax". In other words, they simply mark the sale down 8%. And I can''t think of any basis for saying a cash transaction is illegal or that the failure to give a receipt is illegal. Its not a good practice, and its a red flag. But I don''t see how its illegal.

 

[DiamondExpert]

kcgunesq makes good points. Many wholesalers sell directly to the public, just not usually at wholesale prices.

 

[Ellen]

Date: 6/28/2008 10:07:19 PM
Author: susiegrneyes
Also a gut feeling that something isn''t right.

In my personal horror story I had a bad feeling before I even signed the CC slip. If you have any doubts, then don''t buy anything from that vendor.

Absolutely. This one is almost no fail.

 

[honey22]

We had one recently on a 50% off sale - you are just not getting 50% off, unless of course the orginal price is around 50% overpriced, which in that case, you are paying what you should.

You don''t get any free rides in life, well except on the travellators in shopping centres, I refuse to walk up those things cause they are the only free rides I am going to get in life.

 

[Dreamer_D]

Date: 6/28/2008 10:39:52 PM
Author: kcgunesq

All red flags for sure. But I''m not sure I agree with your statements of law in #1 and #2.

Although it may be a fair trade act violation for a retailer to advertise themselves as a ''wholesaler'', this doesn''t mean to me that it is illegal for a wholesaler to sell directly to a retail customer.

Also, while it may be illegal for the seller to fail to remit tax on the sale, it doesn''t mean that the seller can''t price the diamond including tax. Several of the mass market furniture stores in the area run a special every year where they ''pay the tax''. In other words, they simply mark the sale down 8%. And I can''t think of any basis for saying a cash transaction is illegal or that the failure to give a receipt is illegal. Its not a good practice, and its a red flag. But I don''t see how its illegal.

I didn''t say number 1 was against the law, just that is is not "allowed" which is true. As diamond expert pointed out, some wholesalers will also have a retail side to their business. I think that most consumers are not typically aware that when dealing with such a wholesaler they are not getting wholesale prices.

As for point number 2, I think you are being very literal in your interpretation of what I wrote, but your clarification may also help others who interpreted my statement as such, so thanks. To elaborate, I was referring to a situation where a jeweler offers to sell goods "tax free" if the transaction is for cash and off the record (i.e,. without a receipt). I highly doubt that in such cases the jeweler is remitting taxes to the government for the full sale value of the goods, which is illegal, but regardless, such a transaction leaves consumers at risk.

 

[NeverEndingUpgrade]

Date: 6/29/2008 6:59:00 AM
Author: honey22
We had one recently on a 50% off sale - you are just not getting 50% off, unless of course the orginal price is around 50% overpriced, which in that case, you are paying what you should.

You don''t get any free rides in life, well except on the travellators in shopping centres, I refuse to walk up those things cause they are the only free rides I am going to get in life.

This is so true. I''ve heard the "This diamond retails for $12,000 but this week we can sell it for $6,500" line. Put whatever numbers you want in there, but it''s the same in many stores.

 

[justjulia]

Date: 6/28/2008 6:17:08 PM
Author: kcoursolle
no return policy or one that is only 24 hours


any type of certification besides GIA/AGS/EGL


a price that seems too good to be true


a pushy salesman or someone who is too anxious to make a sale


a salesman who doesn't know his/her stuff or discounts your knowledge or another vendor

I disagree with "any type of certification besides GIA/AGS/EGL." I've owned GIA and another not mentioned and both were equally as beautiful and quality cut rocks. You have to like what you see, which I will admit might be hard to do if you buy sight unseen or don't have a relationship with a vendor who will tell you what they see.

 

[kcgunesq]

Date: 6/29/2008 2:20:25 PM
Author: dreamer_dachsie

Date: 6/28/2008 10:39:52 PM

Author: kcgunesq


All red flags for sure. But I''m not sure I agree with your statements of law in #1 and #2.


Although it may be a fair trade act violation for a retailer to advertise themselves as a ''wholesaler'', this doesn''t mean to me that it is illegal for a wholesaler to sell directly to a retail customer.


Also, while it may be illegal for the seller to fail to remit tax on the sale, it doesn''t mean that the seller can''t price the diamond including tax. Several of the mass market furniture stores in the area run a special every year where they ''pay the tax''. In other words, they simply mark the sale down 8%. And I can''t think of any basis for saying a cash transaction is illegal or that the failure to give a receipt is illegal. Its not a good practice, and its a red flag. But I don''t see how its illegal.

I didn''t say number 1 was against the law, just that is is not ''allowed'' which is true. As diamond expert pointed out, some wholesalers will also have a retail side to their business. I think that most consumers are not typically aware that when dealing with such a wholesaler they are not getting wholesale prices.


As for point number 2, I think you are being very literal in your interpretation of what I wrote, but your clarification may also help others who interpreted my statement as such, so thanks. To elaborate, I was referring to a situation where a jeweler offers to sell goods ''tax free'' if the transaction is for cash and off the record (i.e,. without a receipt). I highly doubt that in such cases the jeweler is remitting taxes to the government for the full sale value of the goods, which is illegal, but regardless, such a transaction leaves consumers at risk.

1. If its not illegal, how is it not allowed?

2. You are correct about me being very literal. It is is definitely one of my character flaws that is only encouraged and promoted by my professional duties. It drives my wife (and likely my staff) up the wall. I certainly don''t mean any offense.

 

[kcoursolle]

Date: 6/29/2008 4:52:43 PM
Author: justjulia

Date: 6/28/2008 6:17:08 PM
Author: kcoursolle
no return policy or one that is only 24 hours


any type of certification besides GIA/AGS/EGL


a price that seems too good to be true


a pushy salesman or someone who is too anxious to make a sale


a salesman who doesn''t know his/her stuff or discounts your knowledge or another vendor

I disagree with ''any type of certification besides GIA/AGS/EGL.'' I''ve owned GIA and another not mentioned and both were equally as beautiful and quality cut rocks. You have to like what you see, which I will admit might be hard to do if you buy sight unseen or don''t have a relationship with a vendor who will tell you what they see.

Buying uncerted if often fine for the educated buyer, but it often represents a red flag for people who don''t really know what they are doing. A good cert is a little bit of a safety net for beginners. HRD is another certification place that is fine as well that I didn''t mention.

 

[justjulia]

Date: 6/29/2008 6:03:30 PM
Author: kcoursolle

Date: 6/29/2008 4:52:43 PM

Author: justjulia

Date: 6/28/2008 6:17:08 PM

Author: kcoursolle

no return policy or one that is only 24 hours



any type of certification besides GIA/AGS/EGL



a price that seems too good to be true



a pushy salesman or someone who is too anxious to make a sale



a salesman who doesn''t know his/her stuff or discounts your knowledge or another vendor

I disagree with ''any type of certification besides GIA/AGS/EGL.'' I''ve owned GIA and another not mentioned and both were equally as beautiful and quality cut rocks. You have to like what you see, which I will admit might be hard to do if you buy sight unseen or don''t have a relationship with a vendor who will tell you what they see.

Buying uncerted if often fine for the educated buyer, but it often represents a red flag for people who don''t really know what they are doing. A good cert is a little bit of a safety net for beginners. HRD is another certification place that is fine as well that I didn''t mention.

True, true. Stay away from uncerted stones until you know what to look for. (Can I add, especially ones where the store says they do their own "certs!!!!") I guess what I meant is that it shouldn''t be a red flag in general. I''ve been pleasantly surprised by some IGI stones (gasp). But, yes, if a newbie, GIA and AGS are no brainers. Good point K!

 

[EmeraldCutQuest]

(a) This ''fabulous'' price is good only today!
... or this weekend ...
... or during our 4th of July sale ( ... or pick your own popular ''holiday of the week'')

(b) Going out of business sale! EVERTHING must go! NO reasonable (huh?) offer refused!

(c) For a small deposit, we will put the diamond on hold for you!

(d) Just buy it, then you can show it to her! If she doesn''t like it, you can return it! (Get the details about the return IN WRITING!)

(e) One that I heard at MANY B&Ms: "The most important thing is color!"

--ECQ (no longer).

 

[Dreamer_D]

Date: 6/29/2008 5:56:04 PM
Author: kcgunesq

1. If its not illegal, how is it not allowed?

Well maybe things work differently in the diamond industry or in the US (I am in Canada), but my family works in the retail industry and there is a demarkation between being a retailer and a wholesaler. I believe it has something to do with taxes... taxes on a given item are only collected once, typically at the end of the consumer road. So wholesalers sell items on bulk to retailers who have tax ID numbers, and thus the wholesaler does not collect taxes on the items from the retailer. The retailer, in turn, sells the items to the general public and collects the taxes and passes them on to the government. Were a wholesaler to sell an individual item to a member of the general public, they would need to collect the taxes and remit them to the government... and at that point they are no longer a wholesaler, but a retailer. Or something like this

I think the main point is that the term "wholesaler" refers specifically to people selling goods in mass quantities to retailers, usually at a substantial discount from what retailers sell the goods for. I think too often, though, consumers believe that because their jeweler is a "wholesaler" in part of his or her business, that they will be getting a deal when buying from such a jeweler in his or her retail capacity. This is simply not the case, since once a jeweler puts on his or her retail hat, goods are sold at typical market retail value (though perhaps there will be a discount relative to large scale retail operations because of reduced overhead, depending on the nature of the wholesalers retail operation)!

So I think that consumers need to know that if they are buying a diamond from a jeweler, except in some rare or unusual circumstances, they are making a retail transaction and should expect ALL the same services that they would expect in any other retail transaction (e.g., an itemized receipt, a reasonable return/inspection period etc). Sometimes, it seems that consumers may not know to expect or demand these same basic services from a jeweler who is also a wholesaler because they may think that they have to sacrifice some of these features in order to get the "deal" they are getting from the "wholesaler". So although it is of course okay to buy from jeweler who also functions as a wholesaler, I think that consumers need to be extra cautious and aware of their rights in such a situation, and not be blinded by the "wholesaler" label.

Date: 6/29/2008 5:56:04 PM
Author: kcgunesq

2. You are correct about me being very literal. It is is definitely one of my character flaws that is only encouraged and promoted by my professional duties. It drives my wife (and likely my staff) up the wall. I certainly don''t mean any offense.

LOL! You fit right in here, then, we are all a little detail-obsessed!