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Wall Street Journal Article: Online Diamond Shopping: 2000

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Mara

Super_Ideal_Rock
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I mentioned reading this article a few days ago and a forum member was kind enough to find it online for me in the archives, and send it to me via email! Here is the copy of the article for those who are interested.




Catalog Critic: Taking the Plunge, Online


Web Offers Deals on Diamonds, But Are the Rocks Any Good? Opps! A $2,500 Overcharge



By Lauren Lipton; Special to The Wall Street Journal
15 December 2000
The Wall Street Journal

"Buying a diamond engagement ring may well be the most intimidating, emotionally fraught, high-stakes consumer experience there is. Want to give your nerves an even bigger workout? Try forking over thousands of dollars to a vendor you've never met, for a diamond you've never seen.

That's what we did. In a daring move, we maxed out the Catalog Critic credit card to the tune of $30,000 on five engagement rings we found on the Internet. Sure, it sounds risky, but a number of increasingly vocal online gem vendors insist that buying diamonds online is not only safe and simple, but shrewd. Their lower overhead, they contend, means more rock for the buck -- plus, you often don't have to pay sales tax. Online diamond sales may represent a sliver of the $50 billion annual world-wide diamond industry, but these sites say they're getting lots of hits and buyers -- particularly now, in December, the biggest month for sales of diamond rings.

But can you really get a top-quality diamond -- at a great price, and without hassles -- online? To find out, we went shopping for the ultimate holiday surprise. Budgeting $5,000 to $6,000 for each ring, we headed to Diamond.com, Mondera, Fortunoff, Ashford.com and Blue Nile in search of a plain setting with the best one-carat stone we could find.

We were surprised, all right: One rock had a flaw troubling enough to put its clarity grade in dispute. Another arrived so dirty it needed a professional scrubbing. Worse, though, after taking this same ring for an independent review, we discovered we had paid nearly twice as much as it was worth. And then there was the $6,000 ring we couldn't return. (Psst: Anybody want to buy a rock?)

You can head off many unpleasant surprises, of course, by knowing exactly what you're buying. Remember the "Four Cs": cut, color, clarity and carat. Then, once the ring arrives, have an independent expert look it over. Every diamond should come with a grading certificate from an accredited gemological laboratory; the jewelers we talked to agree that the Gemological Institute of America, an independent, nonprofit organization, is the most trustworthy. Think of that certificate as a road map to your rock. A good jeweler can look at the certificate, inspect the diamond and verify that you got the stone you paid for. Since an expert will be taking a look at your purchase, don't bother with gift-wrapping. (You're not missing much: We had our boxes gift-wrapped and were generally unimpressed.)

But we're getting ahead of ourselves, and our shopping.

With the exception of venerable New York company Fortunoff, the sites we visited had a "build-your-own-ring" feature that lets shoppers sift through a list of stones with the qualities they want, pick one, then add a setting. We used this feature on three of our orders, and chose preset rings at Fortunoff and Blue Nile. At check-out time, the expected anti-fraud controls kicked in: We were called -- and called again -- to verify our billing details. The sites all offered free, insured rush shipping. It was all pretty straightforward.

But it wasn't always fun. Some sites were slow. One was torture. Just sorting through the preset rings at Fortunoff took forever. Once we found a diamond we could afford, we wanted to put it in our online shopping cart but couldn't. Irritated after six tries, we finally phoned in our order. Later, we spoke with Esther Fortunoff, the company's executive vice president of jewelry merchandising. She explained that the company didn't actually sell diamond rings online, preferring that shoppers close the deal by phone with a real person. The theory: Some things should be purchased only under the care of a trained professional. But our conversation struck a nerve; the next day, Fortunoff revamped its Web site to allow online purchases of engagement rings.

Maybe it's just as well, because dealing with a real person at Fortunoff didn't save us from spending too much. We'd been surprised that we could only afford a solitaire that was less than three quarters of a carat. So imagine our shock when we took it to a jeweler we trust, Peter A. DeNatale in Manhattan. After cleaning the ring -- "it's so dirty!" he gasped -- he told us what he felt we should have paid for this stone in a competitive market. His guess: $2,750 to $3,000 -- roughly $2,500 less than we had paid. We called Fortunoff for comment, and the company did some research and discovered that someone had put the wrong price on our ring -- plus two others on the site. "We made a mistake. I feel terrible," Ms. Fortunoff said.

That wasn't the only problem Mr. DeNatale uncovered. When he put the Ashford.com ring under his microscope, he found a flaw called an "open wound" on top. You can't see it with the naked eye, but under magnification, it looks like there are bulldozer tracks across one of the facets. Mr. DeNatale said it could possibly get worse over time.

The diamond had been given a relatively good clarity grade of VS2 by the GIA, which had noted the flaw. But the wound was so troublesome to Mr. DeNatale that he thought the diamond should have gotten a lower mark. He postulated that either the GIA made a mistake, or that the flaw had worsened after the diamond was graded, perhaps as it was being set into the ring.

Ashford.com CEO Kenny Kurtzman says there is no way of knowing what happened, and the GIA concurred. His recommendation? Return the ring. "We would take it back in a heartbeat," he said, "and send you another one immediately."

Two of the other three rocks met with some disapproval. Mr. DeNatale wouldn't comment on Blue Nile's diamond, the only one of the five that didn't have a GIA certificate. Instead, it had been graded by the International Gemmological Institute, whose lab he and other jewelers we spoke to believe is more generous in its grading. Carl Gandia of Greenwich Jewelers in Manhattan said the IGI might rate a diamond a grade higher on color and clarity than the GIA would. (The IGI disagrees, saying its diamond graders are trained by, and use the same standards as the GIA. And the IGI and jewelers point out that diamond grading is subjective.)

The Mondera.com diamond didn't go over too well, either: The "table" -- the flat top facet -- was small, an aspect of cut that experts say can affect a diamond's sparkle. To be fair, the company clearly listed the diamond's table size, so we knew what it was when we bought it. Had we been shopping with an expert, though, we would have passed on this one.

That left the rock from Diamond.com. Surprise! Mr. DeNatale approved, even estimating its value at $400 more than we'd paid. We liked the ring and were all set to declare it "Best Overall." Then, return-policy disaster struck.

It turns out that though the other sites have 30-day return policies -- and this site also allows for 30 days for some purchases -- this ring only had a 10-day return window. Too bad we didn't get around to reading the fine print until after that window had slammed shut. Still, when we called to arrange to send the ring back (You didn't think we got to keep them, did you?), it had only been a little more than 10 days. What company would really give us a hard time about this?

This one did. Our customer-service representative twice refused to take the diamond back -- even after we begged. It was only when we finally revealed ourselves as a newspaper reporter doing a story that she reconsidered. The company president, whom we called later for comment, insisted that "I am sure [the returns department] would make an exception to the rule and take the ring back, and not because you're from The Wall Street Journal."

That brings us to the biggest lesson we learned from our online diamond spree: Make sure you know your site's return policy, and for heaven's sake, follow it to the letter. That will leave you just one last thing to stress about: What if she says no?


---



Diamond.com


Diamond $5,924.16,


platinum-setting upgrade, $237;


Total: $6,161.16


888-342-6663



Vital Stats -- One-carat, with a VS2 clarity grade (very small flaws). Its color grade of G is at the top end of the near-colorless range. We were pleased with it -- even if the ring was a size bigger than we ordered.
Shipping Cost/Time -- Ground shipping in five to six business days is free. Our order took seven business days.


Return Policy -- Within 10 days in original condition and packaging, with security tag and receipt. Call first for authorization. Customer pays return shipping unless item is defective or order is wrong.
Phone/Web Experience -- The site has great bells and whistles. As you build your ring, it shows up step-by-step in a box on the screen.
Comments -- We would have named this best overall, except we're really upset about the return policy. Sales tax alert: This
Florida-based company must charge sales tax to customers in that state.



-----------




Mondera


Diamond, $5,070;


platinum setting, $400,
Total: $5,470



800-666-3372




Vital Stats -- This one-carat diamond has an excellent clarity rating of IF, or internally flawless. The tradeoff: Its color rating of I is still in the near-colorless range, but in the bottom half.
Shipping Cost/Time -- UPS Next Day Air shipping is free. We were notified that our ring, ordered on a Monday, would ship in three to six business days; it came Friday.
Return Policy -- Return within 30 days for exchange, credit or refund. Customer pays return shipping unless item is defective or order is wrong.
Phone/Web Experience -- When we tried to pay, the site wouldn't process our order. Arrgh! We finally phoned it in. (It turns out our different billing and shipping addresses had raised a red flag.)
Comments -- This New York-based company must charge sales tax on any purchase shipped within the state. Our Manhattan address set us back an extra $450.





-----------



Fortunoff


Classic Diamond Ring,


Platinum, $5,350*


800-367-8866


*mispriced, see below.



Vital Stats -- This preset, 0.71-carat stone had a clarity grade of SI1 (one notch below VS2: flaws are noticeable under a loupe). Color grade: G. The ring was a half size too big and needed cleaning.
Shipping Cost/Time -- Ground shipping in three to five business days is free. We ordered on a Tuesday; our ring arrived Friday.



Return Policy -- Within 30 days, in original condition and packaging. Customer pays shipping unless company made a mistake. Had we kept our ring, the company says it would have refunded the amount we overpaid.
Phone/Web Experience -- We had to phone the company to buy our engagement ring (our phone saleswoman was efficient and pleasant). Now, shoppers can buy rings online as well.
Comments -- New York and New Jersey residents must pay sales tax, adding $441 to our bill.





-----------



Ashford.com


Diamond, $5,810;


14-carat gold setting, free;


Total: $5,810


888-922-9039


Vital Stats -- This one-carat, G-color diamond came with a GIA clarity grade of VS2. Our jeweler was surprised that its "open wound" hadn't earned it a lesser rating. (CEO says the company would take it back "in a heartbeat.")
Shipping Cost/Time -- Overnight delivery is free. Orders placed by 5 p.m. CST are guaranteed to arrive by the next day if the item is in stock. Ours wasn't in stock and took two days.
Return Policy -- Within 30 days, in new and unused condition, with original documentation and packaging. Call first for authorization. "On an item like this, we would pay return shipping," says company CEO.
Phone/Web Experience -- Our computer crashed just after we had chosen a stone; when we got back online, we had to search 65 pages of diamonds to find it again. (We should have tried an advanced search, says the company.)
Comments -- Enough, already. Since ordering this ring, we have been inundated with promotional e-mails asking us to buy more. Sales tax: in Texas.



-----------




Blue Nile


18K Gold Diamond Solitaire Cathedral Ring, $6,100


800-242-2728


Vital Stats -- The one-carat diamond in this preset ring was certified VS2-G from International Gemmological Institute -- not the GIA.
Shipping Cost/Time -- FedEx Priority Overnight Shipping is free; orders take one to three business days. Our order was on time.
Return Policy -- Within 30 days, in original condition and packaging. Call first for authorization. Company pays return shipping if it made a mistake.
Phone/Web Experience -- Ordering online went very fast, possibly because we chose a preset ring instead of building our own.
Comments -- The company says it does have other, GIA-certified stones. Sales tax in Washington State.




---
The Second Opinion



Online diamond sellers say their prices are more competitive than those of traditional jewelers. To put those claims to the test, we had Peter DeNatale, a Manhattan jeweler, take a look at the diamonds in their settings and tell us what he thought we should have paid for the stones. Here's his assessment:




Store -- Diamond.com
What we paid -- $5,924.16*
Jeweler's bottom line -- $6,000 to $6,300
Comments -- Our jeweler had nothing bad to say about it. He thought it was a good deal.



Store -- Mondera
What we paid -- $5,070*
Jeweler's bottom line -- $5,400 to $5,700
Comments -- Our jeweler took points off for the small top facet. He also asked why we'd picked an internally flawless stone with a not-so-spectacular color grade.



Store -- Fortunoff
What we paid -- $5,350**
Jeweler's bottom line -- $2,750 to $3,000
Comments -- A company representative says the item mistakenly carried the wrong price. She sells similar rings for between $3,150 and $3,450.




Store -- Ashford.com
What we paid -- $5,810*
Jeweler's bottom line -- N/A
Comments -- Based on the paperwork, he said $6,000 to $6,300. But once he saw the extent of the flaw, he felt the stone would need to be recut, reducing its value.




Store -- Blue Nile
What we paid -- $6,100**
Jeweler's bottom line -- N/A
Comments -- This stone wasn't certified by GIA, but by a different rating body. Without a GIA evaluation, our jeweler declined to review it.





*Price for diamond only; some settings cost extra.


**Price for diamond and setting."


Copyright (c) 2000, Dow Jones & Company, Inc.
 

Arlington

Shiny_Rock
Joined
Aug 6, 2003
Messages
179
Very interesting. I wonder just how small that table was that they were so disparaging about.
 

magna2

Shiny_Rock
Joined
Sep 22, 2003
Messages
319
Funny how the jeweler did not give an asseement of the bluenile diamond because it didn't have a GIA report. Shouldn't the jeweler still be capable of giving his honest opinion regarding the quality despite the lack of an GIA report.

New Yorkers should be wary about taking their diamonds to the so called trusted jeweler if he is so incapable of providing an assessment of diamonds that are not already graded by GIA.

Plus is this jeweler in the business of selling diamonds and therefore has a conflict of interest giving that he really never stated that any of the diamonds were worthy of purchase - with the exception to the the Diamond.com diamond that he "approved" whatever that meant.

And if this "jeweler" is an appraiser or qualified to do so then why not appraise the bluenile diamond? It just makes you wonder.

 

fire&ice

Ideal_Rock
Joined
Jul 22, 2002
Messages
7,828
I'm a little confused. She bashes these internet diamond companies in her first part of the article. Then in the jewelers comments below, the bottom line for such inferior diamonds was higher in each of the proclaimed bottom line jeweler's price. I completely discounted fortunoff as an on-line vendor. They are a huge B&M store w/ several retail locations.

From the article it sounds like they did not know what they were buying. But, of course, if they went to any B&M, they would pick out a perfectly cut stone - hand picked as perfect by the part-time teenager salesperson. Oh brother.

Our media at it's best.
 

Mara

Super_Ideal_Rock
Joined
Oct 30, 2002
Messages
31,003
I remember being somewhat confused as well reading this article--but I do recall ending the entire read with 'wow I guess I'll just shop offline' feelings afterwards. Or at least knowing which online vendors not to go to...at the time.




Obviously she didn't know anything about stones or what to buy etc...I think they were just buying a range of items to test all the different aspects. If they were knowledgeable..things would have been different most likely. Would be interesting to see someone try this with all the same type stone and color, clarity etc. Like E VS for all the 1c stones. Then also compare them against each other...with claims made by the vendor (e.g. H&A, 'ideal', AGS 0).




Odd about the appraiser...definitely.
 

fire&ice

Ideal_Rock
Joined
Jul 22, 2002
Messages
7,828
----------------
On 10/10/2003 3:14:27 PM Mara wrote:


>Odd about the appraiser...definitely. ----------------

Yeah, Magna's right about that. This "jeweler" who isn't an independent appraiser, had his own agenda. *That* was clear in the article.
 

fire&ice

Ideal_Rock
Joined
Jul 22, 2002
Messages
7,828
All this & that said, the internet diamond world is a different animal than 3 years ago.
 

DiamondExpert

Brilliant_Rock
Joined
Jan 15, 2003
Messages
1,245
Seems the author cut her own throat, as any uneducated client could, in buying blindly, and then taking the "chickens" to the "fox" for an "evaluation"...had she been a "real" client in the real world doing this, she would have gotten what she deserved.

Interestingly, she makes no comments about how the stones looked to her...sounds like they did not even consider cut quality
!!

I'm disappointed I wasn't included on her list - at least I could have given her an education!
 

Mikesgirl

Shiny_Rock
Joined
Aug 30, 2003
Messages
348
Thanks for digging this up, Mara. It's interesting how things have changed in the last 3 years. It does look as though the writer had an anti-online agenda. Particularly where Blue Nile came in - you'd think a competent reporter would be able to find an appraiser to look at all five and give an unbiased opinion.

I wonder how this would read today - maybe the WSJ should hire one of us self educated cut nuts to look at on-line buying as compared to B & M's. Wouldn't that be interesting (All I'd request for payment is the ring of my choice.)
 

niceice

Brilliant_Rock
Joined
Jan 29, 2003
Messages
1,792
The key phrase here is "we took the diamonds to a 'jeweler' that we trust"... They didn't take the diamonds to an independent GIA Graduate Gemologist, they took them to a jeweler and essentially asked "how bad did we get ripped by these internet jewelers? and no doubt, the guy had a field day. Now we would believe the results a little more if they said "we submitted the diamonds to the GIA (in New York) for grading, and..." or we took the diamonds to this gemologist or that gemologist, but this is like saying "we bought five Ford Trucks over the internet and then took them to our trusted Chevy Dealer to find out how well we did"... Bunk!

A few years ago we were shopped by a television station out of Phoenix, Arizona along with a bunch of other internet dealers, we happened to be the only site that passed their evaluation which included trying to return all the diamonds a few days after the published return policy... They flew us out for an interview which was pretty cool, but we found ourselves defending the other dealers and explaining to the reporter why her results were flawed because of the way she had conducted her investigation, she too had used a local jeweler who "she trusted" to evaluate the diamonds and that person hadn't been very objective in our opinion... We introduced her to a couple of independent gemologists at the AGTA Colored Gem show in Tucson which was going on at the time... A few of you might remember we were being followed around by a television crew and that it caused quite the stir... The legitimate dealers were standing by waiting to be interviewed and those with something to hide were ducking for cover faster than you could say "hi", but the point is, the press is never impartial, they are always looking for some sort of sensationalism that will boost their ratings, this article seems like nothing more than that to us.
 

jenibear

Shiny_Rock
Joined
Aug 10, 2003
Messages
312
As a newspaper reporter I have to say that Wall Street Journal piece disgusted me. The first problem is the way it was written, very much like a column, not an objective news article.
Any reporter I know would have done things very differently.
First of all, how do you compare vendors when the products are all different?
One of the first things your taught in J school is if your going to do a comparison story, ie comparing the number of arrests in three police departments, is you get the same information from all three. You can't compare 2000 arrests to ones made in 2002.
It could have been a good story if the reporter went to an appraiser to help her choose stones of similar size and quality and then taken the group to another independent appraiser or someone from GIA - without the paperwork. That way the appraiser or GIA grader couldn't balk at checking out an IGI stone.
All I have to say is that story was poorly done and really tells you nothing. Please don't base your opinion of news reporters on that one! And no, we all don't write things to be sensational. Some of us take a lot of pride in our work and the truth that it holds. But as in every field, there are the bad apples. And you know what they say about bad apples....
 

Rhino

Ideal_Rock
Trade
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Messages
6,239
She should have read "pricescope" first.





Rhino
 
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