Selling a pre-owned diamond as "NEW" with a new grade report

[flyingpig]

@flyingpig, in trade-in cases, shouldn't the consumer be informed that these stones are trade-in's?
I've heard anecdotally that a lot of people have issues with pre-owned stones (particularly stones used in engagement rings) unless they happen to be family heirlooms. Hence the story as to why Tiffany & Co don't use stones that have been traded-in for a larger one in their engagement rings but instead use them in more decorative jewellery pieces where there isn't that much of an "emotional" connection to the piece.

Ideally, yes. But my reason is not an emotional one.

A trade-in may have been damaged during the previous ownership. The buyer needs to be warned about this, especially when the trade-in is not sent to GIA/AGS for re-grading. Even a minor damage can affect the carat weight, clarity grade, inclusion map, and polish and symmetry grade. You cannot leave this inspection to vendor's internal lab.

Even if a trade-in is sent to AGS/GIA for regrading (like in WF and BGD cases), the buyer needs to be informed.
It is entirely possible that there is micro-abrasion not visible at 10x level and polish/finish,although still AGS ideal or GIA ex, may not be the exactly same as when it was first crafted years ago.

Nick-picking.. but you should when you spend 5~10k per 0.2g.
For me, a finished diamond is a craft. I need to know when it was first crafted, ideally.
For some, it is a rock, for others, it is an emotional forever piece.

 

[arkieb1]

I was wondering if it was a fear of bad Karma too, because culturally some people will not wear diamonds worn by other people.

Here is another example for you to think about. A diamond dealer calls in a stone it arrives with a chipped girdle. He sends it to be repolished. It now has a slightly lower weight but it was never owned by someone. So therefore by your definition it was never a "used" or "preowned" diamond. Another dealer gets a "new" stone with a really tiny microscopic nick he never discloses.

I'm suggesting if you are basing the notion of preowned on one that a preowned diamond can be somehow damaged that a non preowned diamond must never be damaged, "new" or non preowned diamonds can also arrived to the dealers damaged too, this can and does happen.

So, never being owned by someone isn't a 200% guarantee that somewhere along the chain from the mine, from getting bumped at the polishers, from getting bought or sold in a parcel of stones and travelling to the US, and then to be in not one but several diamond dealers hands a stone that has never been owned cannot get damaged, they are less likely to be damaged than a preloved stone, but it is not impossible.

 

[WinkHPD]

"Diamond flipping" is a common trade term for buying a diamond over the counter from a consumer and quickly reselling it. Sometimes the "flip" is store to store. Sometimes store to consumer. Sometimes it occurs after repair or recut, with a new grading report. Sometimes it's sold with the original report (I do not agree with this practice but it happens). This doesn’t just apply to diamonds, it includes many gemstones, loose and in finished pieces. Thousands of items are listed and traded in this way on B2B websites. Jewelers also flip directly to the public using eBay stores.

Some of you may recall gold hitting it's all time high in 2011. You may also remember gold & silver buyers popping up in every strip mall when that was happening. This was definitely a high water mark as it relates to diamond flipping. It inspired Martin Rapaport's famous quote “Right now there are more diamonds coming out of South Florida than South Africa.”

So the answer to the original question in this thread is no: There is no obligation for a seller to disclose whether a diamond was previously in circulation. While it may seem odd it's perfectly reasonable because, without complete familiarity with your direct supplier, and theirs, and theirs, etc., there is simply no way for the seller to know.

I actually came to this thread to answer another question, about my company specifically.

If a customer takes advantage of High Performance Diamonds' 80% buy back policy, http://www.hpdiamonds.com/en-us/whyus/whyus-lifetime is that stone no longer "new?" If so, where's the "used" section on their website?

Good question. Here is the answer. When someone takes advantage of our 80% lifetime buyback (which is rare but does happen) or unrestricted lifetime upgrade, we don't offer the diamond for resale. We return it to our cutter, Crafted by Infinity diamonds in Antwerp. There it's inspected for wear, because any diamond that's been mounted and worn may potentially have abrasions, which changes its graded condition. This can happen simply from rubbing against another diamond. After such time as it has been through repair or re-polish, CBI will decide whether the diamond will return to the brand, or is sold through another channel.

Your thread hits on one of the many reasons I only sell Crafted by Infinity diamonds. I like the increased provenance. They literally secure every starting crystal themselves, planning and crafting from the outset. You may already know about their “Meet The Cutter” receptions. At these events Paul Slegers, the founder, can tell each owner details about their starting crystal, why it was chosen, how it was planned and how it was estimated to finish - all of that before the lab ever graded the diamond.

In reality, probably the only way to ensure a diamond is truly new, or maybe a better term "never set" is to have it custom cut from the rough.

This is correct. Although I would add that a polished diamond may also be recut without ever having been set or worn.

Regardless, whatever the case, the diamond is at minimum 1 billion to 3 billion years old. Those numbers can seem abstract but they are truly overwhelming. As it relates to mankind, the life of any polished diamond is a blink compared to its ancient origins.

Wink

 

[flyingpig]

@Wink
thanks for the detailed explanation.

Sometimes it's sold with the original report (I do not agree with this practice but it happens).

Yes.. this bugs me alot. JA's practice.

. We return it to our cutter, Crafted by Infinity diamonds in Antwerp. There it's inspected for wear, because any diamond that's been mounted and worn may potentially have abrasions, which changes its graded condition. This can happen simply from rubbing against another diamond. After such time as it has been through repair or re-polish, CBI will decide whether the diamond will return to the brand, or is sold through another channel.

I am glad that CBI is taking such step.

My next question to @Wink and @Paul-Antwerp is "what percentage of trade ins requires at least polishing ?" if you don't mind sharing. or simply common, not uncommon or rare??

 

[bmfang]

I was wondering if it was a fear of bad Karma too, because culturally some people will not wear diamonds worn by other people.

Reminds me of what happens with pounamu/nephrite jade from New Zealand. Usually if it is to be sold or given to a new owner after someone dies or if they do not want such a piece anymore (say, a hei-tiki ornament) it has to be ceremonially "cleansed" in a naturally occurring stream of running water to get rid of bad karma/spirits/etc.

 

[SimoneDi]

Reminds me of what happens with pounamu/nephrite jade from New Zealand. Usually if it is to be sold or given to a new owner after someone dies or if they do not want such a piece anymore (say, a hei-tiki ornament) it has to be ceremonially "cleansed" in a naturally occurring stream of running water to get rid of bad karma/spirits/etc.

I was also going to mention the "cleansing" through running water method or the other option is "blessed" by a priest, etc.

 

[ChristineRose]

So, never being owned by someone isn't a 200% guarantee that somewhere along the chain from the mine, from getting bumped at the polishers, from getting bought or sold in a parcel of stones and travelling to the US, and then to be in not one but several diamond dealers hands a stone that has never been owned cannot get damaged, they are less likely to be damaged than a preloved stone, but it is not impossible.

This made me think of something else. People can and do wear rough diamonds. Rough diamond jewelry is in museums. How many of those stones have been cut and polished since ancient times?

 

[AdaBeta27]

@flyingpig, in trade-in cases, shouldn't the consumer be informed that these stones are trade-in's?

I've heard anecdotally that a lot of people have issues with pre-owned stones (particularly stones used in engagement rings) unless they happen to be family heirlooms. Hence the story as to why Tiffany & Co don't use stones that have been traded-in for a larger one in their engagement rings but instead use them in more decorative jewellery pieces where there isn't that much of an "emotional" connection to the piece.

People get all worked up about ?new" vs. "used" diamonds, as if a "used" diamond should be worth less than a "new" one. In fact, I gave a massive eye-roll before I even opened this thread. Surely, not this old thing trotted out again?!

Why should a vendor disclose that a diamond was a trade-in? That seems ridiculous to me. First, any diamond could have been traded in or sold by an owner or an estate and then resold one or more times before it ends up at a vendor's place. If it has a "new" report, why shouldn't it be sold as new? It's a "new diamond," for all practical purposes. If a vendor lists it as a trade-in, all that will do is make buyers submit lowball offers on it. If an owner used the diamond as an earring and then traded it in, should that used diamond be worth more than a used diamond that was worn in an e-ring? How many times do we split the hair? Truly, ain't nobody got time for that, and if you do, then you need to seek out one of the dealers who can provide a complete history of your diamond from rough through cutting and every stop before it became yours, and/or have a diamond custom cut for you. But not everyone wants or needs that, so why bog down an entire global industry in trying to maintain tracking information that only a small percentage of buyers require.

The original post addressed the issue of diamond being sold as "new" with a fresh grading report. I say "Why not?" The diamond has been re-inspected and has been issued a report of it's current condition and specs. That resets the clock, so to speak, which seems much practical than trying to trace an entire history of ownership and prior usage, which could be quite extensive and convoluted as diamonds are moved around global markets.

Not all trade-ins have a sad past, lol. I bought a superideal H&A diamond from a PS vendor back in 2007 or so. I wasn't able to buy the style of setting that I wanted, I never had that diamond set, and I never wore it. It sat in my safe until I traded it in on a upgrade a couple of years later. It wasn't worn or "used" in any way. It wasn't bought for an e-ring. It was just as "new" the day that I traded it in as it was the day I bought it. But the report was 2.5 years old. After I traded it in, the vendor got a brand new grading report on it and relisted it on their web site with a different product number. I see trade-in as a non-issue, provided the diamond matches the report and the report is recent.

 

[Karl_K]

What is interesting there is a push in the industry to track diamonds from the mine to the finger.
With documentation following it down the chain to be given to the buyer.
If this is ever implemented it will be interesting to see what happens with the "used" diamond market as older diamonds will not have the documentation.

 

[AdaBeta27]

Oh good lord. Maybe I should just sell all of my real diamonds (with fresh grading reports) and replace them with sims while there's still any market at all for lowly "used" diamonds.

 

[arkieb1]

Unless a diamond has been damaged, and that damage is not disclosed by a vendor and there is no cultural or superstitious reason why someone will not own a preloved diamond I don't even get why it would be an issue. Take for example a Golconda diamond who wouldn't say no to a decent one, preloved or not. And in the case of coloured stones as Wink points out sure, many of those are preloved and recycled too, but is that a bad thing? I've seen some incredible blue Burmese sapphires in Antique rings for example, for price that I do not see and cannot buy in newly cut stones, and in much better colours than many newly cut stones. In the gemstone world something preloved might be rare or mined out so preloved isn't necessarily second best.

 

[HDer]

Yes.. this bugs me alot. JA's practice.

Getting a diamond recertified is expensive. Sending it to Antwerp to get it polished again is presumably even more so. Those would have to be built into the price.

Hopefully James Allen has some people on staff who are skilled enough in detecting damage so that they don't end up sending damaged stones back out to customers.

In a perfect world, even diamonds that are returned in the 30/21/7 day period would be recertified, but I don't see that happening unless the prices for diamond grading come way down.

And think about it this way: every time a jeweler takes a ring out of the case to show a customer there's a chance for abrasions.

 

[LawmaLlama]

Roughly speaking, every diamond ever mined is still out there, somewhere. If you want to guarantee that you're buying something that is freshly mined, there are jewelers who are prepared to do that, but for normal sorts of inventory, they have no way to even KNOW things like prior ownership history or how many times it may have been repolished or recut. It's a rock. There is no test for the age of a rock.

New & used are not gemological properties and mostly they don’t apply to 200 million year old rocks. As mentioned above, condition can be a topic but not always. It’s not even usually.

What then makes a used diamond used?

History of ownership. . .

In the future, there is some tech out there that will be able to trace a diamond from the mine through the supply chain to retailer to consumer and then to subsequent retailers and consumers. Blockchain tech has huge implications not only for the jewelry industry, but many other industries as well. You can read about the potential for more transparency and the implications for the diamond industry here
https://www.forbes.com/sites/pamela...ndustrys-rampant-ethical-issues/#1a71da6625bc

 

[denverappraiser]

It’s easy to trace a diamond from mine to finger, at least some diamonds. It would even be fairly to keep track of the ownership history. The problem is that most people don’t seem to want this, and they’re definitely not willing to pay for it.

 

[Karl_K]

It’s easy to trace a diamond from mine to finger, at least some diamonds. It would even be fairly to keep track of the ownership history. The problem is that most people don’t seem to want this, and they’re definitely not willing to pay for it.

Last I heard De Beers is not willing to disclose which mine a rough came from unless that has changed and they are what around 40% of the market?

But your right $$$ is the biggest reason its being resisted.
The failure of the Canadian source programs to bring a premium pretty much killed it.

 

[gm89uk]

Many people that care about not owning 'preloved' diamonds may wrongly assume by buying through a vendor they are buying a diamond that they will be the first to wear. They will happily wear that diamond without the knowledge it's on its 5th trade in; and of course, what they don't know won't hurt them.

 

[Karl_K]

Many people that care about not owning 'preloved' diamonds may wrongly assume by buying through a vendor they are buying a diamond that they will be the first to wear. They will happily wear that diamond without the knowledge it's on its 5th trade in; and of course, what they don't know won't hurt them.

and then there are some that dont care.
My wifeys first er diamond came from a pawn shop(pre-PS), the head of the ring is from the pawn shop ring also, the shank is new.
Her upgrade is a superb recut from a traded in diamond that was poorly cut.

 

[denverappraiser]

Mine to finger tracking is easier the shorter and more recent the path. The miner who finds it knows where it was found, when, what tools were used and so on. Anything less would simply be bad management. The cutter knows who they bought it from, who worked on it, when, and everything else that happened in their possession. Again, anything less would just be bad business. The dealer knows where they got it, what they paid, when. etc., and that’s true of every set of hands it has passed through. That’s all the data that’s being asked about, but it rarely makes it intact to the end customer. Why not? No, it’s not a conspiracy. This is proprietary information. Why would a mining company want to give it up unless they’re being paid for it, and maybe not even then? Why would a cutting house want to share that? I wouldn’t. Would you? Would you seriously expect a dealer to give up their sources for anything short of a court order, especially without pay?

If this can’t be made to work for ‘new’ stones, how could it possibly work for older ones?

 

[valeria101]

I wouldn't have known that New cut diamonds mean anything to anybody, if you had not started this thread ! [my problem: new diamonds mean too much to me WWW ]

Conformity with the lab report - seems simply sensible to expect.

 

[Paul-Antwerp]

@Wink
thanks for the detailed explanation.


Yes.. this bugs me alot. JA's practice.



I am glad that CBI is taking such step.

My next question to @Wink and @Paul-Antwerp is "what percentage of trade ins requires at least polishing ?" if you don't mind sharing. or simply common, not uncommon or rare??

Hello,

Let me first state that compared to the number of diamonds sold, only a very small number comes back after an upgrade or a buyback-situation.

As for your direct question, how many need repair before they can go back into the brand, that is extremely limited. Obviously, every year, the potential 'age' or 'wear' of a diamond increases, thus also the probability of some damage.

Then again, returning such diamond into the brand is not an automatism. For instance, it may return to us when we already face a serious inventory of diamonds with the same combination of C's. Then, it often makes more sense to sell that diamond in a totally different market.

Looking at this thread, I notice some posters valuing the so-called new state of their diamond. In today's environment however, I also see consumers valuing the fact that precious resources are saved by re-cycling and re-using products. Consumers valuing the underlying value-retention of diamonds, as expressed in upgrade-policies and buyback-arrangements logically accept that the value of a diamond does not decrease because it may have been worn before.

In short, we know the history of each and every CBI. For those valuing recycling, we could highlight the very few we have. For those valuing the 'newness', we can make sure they stay away from these very few. For those valuing a mine-to-finger-story, we can look this up, without the cost of entering the entire production into a formalized program.

Live long,

 

[oldminer]

Most gemstones, including diamonds, are represented as to the perfection of their quality in regard to their external cut & polish. These are the critical components associated with previous wear. When the external condition is as if it was fresh from the cutting shop, then no mention of new or used is normally made. The exceptions related mostly to diamonds have been discussed already, such as previous important ownership, or those rare cases of very high carat weight combined with extraordinary color & clarity and those even more rare diamonds with desirable and strong natural fancy color.

This is a fun question and you can see it has brought out quite a bit of opinion and activity. The bigger question is what features make virtually all common things new while developing a recognition that not all of these attributes fit every single thing. One must remember that all natural diamonds are old and even man-made diamonds are made of carbon which is just as old as the carbon in diamonds. Everything, other than some meteorites, was here in some form or another at the moment this world or the universe began. Nothing is made of new material yet we humans love to put things into neat and tidy categories even when it is a stretch to make some of them fit properly.

Diamonds with a recent GIA report can be sold as new, but are often are sold as previously owned, traded in, or left on consignment. Some important diamonds sold in auctions are newly mined and newly cut. It depends on the seller and the seller's story line. There is some latitude with legality in such selling. When the previous ownership might add value, few sellers would leave that out of the sales pitch. When a stone is unusual and rare, who'd leave that out? If a diamond is believed to be haunted, lucky, or unlucky then the seller and the buyer have to arrive at a solution or there won't be a sale.

 

[yssie]

Conformity with the lab report - seems simply sensible to expect.

Interesting topic! I think... to me "new" in this context means two things:
1. Conformity with lab report (and confirmation diamond has not been set after recertification).
2. Conformity with all brand requirements.

You're going to pay more for a CBI than a JA TrueHearts with the same 4 Cs per the report. Part of what you're paying for is attention to precision of cut and condition at time of sale - and much stricter guarantees on both of those fronts.

 

[valeria101]

Conformity with lab report (and confirmation diamond has not been set after recertification).

Does the pt. in () count if the first part - conformity with lab report - is holding ?

-

Conformity with all brand requirements is interesting: it would seem that only the brand issuer can give it - regardless of any transactions the object might have been through; unless they go to some GREAT length to make sure that third parties can do the same, as the GIA does with its reports... which are also billed as branding tools & function as such very well. Then again, much of those properties remain ... as anyone considering branded diamonds listed around here by owners who are not their makers, finds obvious already: the proportions & optical symmetry would still be there, unless enormous damage has been done (they may not remain if repair is sought for more or less substantial damage, methings - a question too deep in a cutter's terriroty for me).

I would tage GIA's word - if they might have issued some substantial comment about wear marks & grading; also, re. re-grading consystency etc. [I've meant to catch up with G&G since it became OA; unfortunately, this happened while a vast number of academic journals have opened access also, so ... I am never really out of the library anymore ! ,-) ]

Other brand owners - I do not know what they'd want to say ...

[mostly note to self]

 

[yssie]

Conformity with all brand requirements is interesting: it would seem that only the brand issuer can give it - regardless of any transactions the object might have been through

Very true. I suppose (yet another) part of the premium one pays for a branded stone is for peace of mind with regard to confidence in that vendor's word - trust that they'll actually do what they say they'll do, in both spirit and letter of whatever contracts they've established with their buyers, without cutting corners.