Buying paper – with a diamond to go with it.

In the jewelry industry it is called “buying paper”. Buying paper refers to anyone whose diamond purchasing decision is based on a lab report and price. It is not a complementary phrase.

I have touched on this subject in my Top Ten Jewelry Buying Tips and on my post about Certificates, but I felt the need to expand the subject a bit.

For starters a bit of background on certificates, lab reports or grading reports as they are called. A diamond certificate is a grading report on a diamond; it gives information on the Cut, Color, Clarity and Carat weight (the 4Cs) of a diamond. There are two general kinds – a store report, which is issued by the seller themselves or a grading report from an independent gemological laboratory.

Now the benefit to both the buyer as well as the seller of a, fully independent, non biased evaluation of a diamond is obvious. When viewed in their proper context diamond certificates are a very important part of the buying process – it is when they are misused as the definitive statement of quality and beauty that has led many astray.

When ever I sit down with a diamond customer I always keep in mind how hard and confusing it must be. A diamond is a very major purchase; there is a lot to familiarize yourself with, few brand names to compare, all sorts of contradicting information, it is no wonder that increasing numbers of customers find security in a independent, objective, reporting of quality and thus the reasoning goes beauty, that the certificate seemingly offers.

The GIA grading system, developed in the 1930’s, for Cut, Color Clarity and Carat Weight, which has become the worlds standard, was necessary because there had to be some kind of objective standard for everyone to group diamonds of similar characteristics. It has been a wildly successful system. I can talk to anyone in the world about a diamond and have a pretty good idea of its relative quality and if the price being asked is reasonable. BUT and this is a huge BUT, I don’t really know until I actually LOOK at it. In the end beauty cannot be wholly quantified by letters, numbers, percentages and proportions.

There are plenty out there who argue that what I say is complete and total BS, I’m just trying to sell at a premium. When you look at skyrocketing growth in internet diamond sales in the last few years (there is talk that Bluenile will soon reach a billion in sales) it is obvious that savvy marketers have tapped into the public’s perception of and frustration with the diamond buying process.

The general publics willingness to embrace a diamond certificate’s grading report as the definitive statement on quality, beauty and value was a gift from heaven for internet diamond retailers. Without peoples willingness to accept the premise that diamond buying was as simple as comparing paper and price internet diamond sales would not exist.

So who to believe? More on that later – till then, that is how I see the world of jewelry form Rochester, NY

David West Nytch CGA  www.westandcompany.com

Comments

[Sally]

Should I be worried ? I purchased a diamond in Australia from an online seller.
The stone was certified by a company in Melbourne.
I have since returned home and found that the diamond may not be a natural stone?
I am not sure what this means but what was explained to me is that the stone is treated.
my jeweller was very upset that I we been sold this stone and wants to send it to the GIA for confirmation.
What should I do?

Sally Williams

Sally,

Your situation certainly raises some questions in my mind.

First of all did you pay for the diamond using a credit card? If so and it turns out the diamond is NOT as represented you may have some recourse with your credit card company. Also does the company have a return policy and if so how long. I realize that it would be difficult to return an item to an overseas company - but it is worth looking into. Some companies also have offices in the US - I would also check that out as well.

What does the description on your sales receipt say? Does it indicate anywhere that the diamond has been treated in anyway? Does it specifically say what the color, clarity and weight of the diamond is?

When you took the diamond to your jeweler did you show him the certification as well?
Did he check the diamond against the certificate to see if it matched?

It sounds, to me, given what you have said, that the diamond may be clarity enhanced or possibly color enhanced. Clarity enhanced diamonds are stones of poor clarity that have inclusions (flaws) that break the surface of the gem, much like a hairline crack in a glass window. These inclusions are sometimes “filled” with a material that makes them much less noticeable. Diamonds also sometimes have inclusions that look black to the eye when light hits them (often mistakenly referred to as carbon spots). In some cases these inclusions are “drilled” with a laser to lighten them and make them more attractive to the eye.

You did not say if you purchased a fancy colored diamond, if so color enhanced diamonds, in many different hues, have become quite common, and are fairly easy to recognize.

Any of the above mentioned enhancements would be noted on the grading report (certificate) from any legitimate laboratory.

There are other possibilities, but these are, based on my experience, the most likely. If your diamond has had any of these treatments or enhancements – you have a real diamond, just one that is not the quality you may have thought it was.

If you haven’t shown your jeweler the cert and the receipt, as well as information on the web-site etc., I would do so; the answer to your question may be there. If you have and he/she is still suspicious that something is not right - sending the diamond to GIA or AGS (American Gem Society Laboratories – it may be a bit faster) would be the next step.

I hope I have been of some help. If you need further assistance or have more questions please feel free to ask.

David West Nytch, CGA