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Buying Diamonds on the Internet
In this age of the "Information Superhighway",
when super models are auctioning their eggs to infertile couples,
it appears that there's nothing you can't buy over the Internet.
Seems like yesterday (it was) that companies selling diamonds over
the Internet were thought of as a novelty, but today there are literally
thousands of such sites. It still works that same way. You locate
a diamond merchant on the web and look over a selection of stones.
Full-color, high-resolution
images of the diamonds are displayed on the screen. The diamonds
are graded by carat weight, cut, clarity and color. You select a
stone you like, enter your credit card number and your diamond will
be shipped.
Then as now my major
concern is the quality of the stone's proportions. In my cyber travels
I find lots of "off-makes" (poorly proportioned stones).
I could tell they were taking rough which if properly cut would
have yielded shy-carated stones and cutting them heavy to reach
full-carat weights even if it meant sacrificing sparkle
for size.
One dealer actually
marked spread-cut diamonds with a "+" sign, offering them
as more durable (and more expensive) claiming they were more brilliant
and looked "larger than would be expected" for their weight.
Well, we know that a spread-cut diamond offers brilliance at the
expense of fire and probably has a very thin girdle which would
cause a durability problem.
In the process,
they offer lots of full-carated diamonds and a very few opportunities
to "buy shy". They try to force the buyer to their strong
suit where their inventories are the heaviest. If you want a .90ct
SI-1, I then don't be pushed into a 1ct SI-1, G, unless you get
it for the .90ct price and all the parameters of cut are at least
Class II.
In short, you're
forced to hunt for the needle in the haystack. However, the issue
is much more complicated now if for no other reason than the advent
of treated diamonds. That's just one of the many scams currently
afloat.
Cons
1.)
The Scams:
A.
Treated Diamonds: Every form of treated diamonds is detectable
by a lab with the exception of a baked or heat-treated diamond.
These are diamonds that two weeks ago might have been yellow but
due to the treatment they are are now white! Baked diamonds are
brittle and can break and must be avoided. The only way to avoid
being stuck with this type of loss is to make the sale contingent
on a breakage guarantee and or money back guarantee.
B.
Fake Lab Grading Reports: Diamonds are popping up all over
the country whose lab grading reports don't match their diamond.
A lot of
people believe that if a diamond has been graded by a third party,
there
is no need to have it independently checked when you get it. What
good is it if a lab grading reports say a diamond
is great if it
doesn't match the diamond? With today's home computers knocking
off lab grading report has become a piece of cake.
C.
Duplicate Lab Grading Reports: This is where the lab grading
report is not a forgery but it still does not match the diamond.
What the crook does is take a good diamond and grade it two or
three times. They then take the extra lab grading reports and put
it with a similar looking but lower quality diamond to complete
the hustle.
D.
"Hot Diamonds": Another quick hustle for an
on-line vendor is selling diamonds he hasn't paid for and never
plans on paying for. In the jewelry industry diamonds are routinely
handled on consignment. This is where the owner loans diamonds to
a retailer where once he sells the diamond, he pays him. Kind of
like a line of credit. Some newcomers can get lines of credit of
$100,000 to half a million. But the dishonest vendor sells the diamond
on-line below his cost to attract a quick sale but never pays his
supplier. In a few months he declares bankruptcy and the spoils
are his. In this case you might get a nice diamond at an unbelievable
low price, but not for long. The FBI is now looking into these cases
as interstate theft. How would you feel a year and a half from now
when someone knocks on you door to say they're confiscating your
stolen diamond!? You're out of the money and the rock!
E.
The Shell Game: You order a diamond on-line, get it appraised
and the appraiser says it's a fake! "Cubic Zirconia!!!!"
You scream foul play, go to the police and the retailer claims he's
innocent. Now you play the job of the police officer and find the
crook. Did the seller mail a fake like the appraiser says? Or did
the appraiser switch the real diamond for a fake and he's the crook
or better yet, did the customer cook the whole thing up to get a
free diamond and they switched the diamond for the fake before going
to the appraiser? Find the crook? What a mess indeed.
F.
Handling Fees Scam: Some on-line jewelers build their profit
into handling fees, not the diamond. That way whether you keep
it or not they just made a sale. Avoid jewelers who charge
handling fees that are not refundable.
G.
The Return Authorization Number: R.A.N. for short. Like
I should have ran from that place. Here's what some "smooth
operators" do. They talk about how your satisfaction is the
only thing important to them and if your not happy you can return
it for a full refund; minus of course shipping charges. (Beware
of excessive shipping charges and get these prices upfront). Also
as
I stated before, always ask if there are handling fees. A lot of
companies don't mention these until you decide to do a return.
Then
they stick it to you.
Anyway, back to
R.A.N. R.A.N.(s) are a way for an outfit to deter or eliminate
returns. These companies make you call back to get an authorization
number
for return approval or you can't return the item. This benefits
the vendor two ways:
1. In most cases anyone who uses R.A.N.(s) have limited return
policies, like 30 days. They know that the more difficult they
make it for you to return or the more procedures you have to undertake,
the clock will always be ticking. Usually from the very second
it was postmarked. If they can stall you long enough and make the
return policy time period lapse, they win.
2. Also if you want to
return something they shuffle you off to another department.
Forget about talking to that nice salesman
who sold it to you, you're about to get the gorilla of a salesman
on the line who will do everything in his power to talk you out
of it. Look, if I want to return something I don't want to spend
an hour justifying my return.
In my opinion
R.A.N.(s) or return Authorization Number(s) are for the birds.
I can certainly see why a vendor likes them, but what do they
do for
me? Oh, one more thing, believe it or not a lot of vendors use
one more little hurdle on returns. They tell you all returns must
be
mailed back in the original packaging. This is just a joke:
1. They pack it
in such a way as to make it impossible to not destroy the packaging.
2. They're hoping
you'll accidentally throw away the original packaging so they can
avoid the return all together.
2). Multiple Stone Viewing: I've yet to
find an Internet diamond company that has said, "Let me mail
you a dozen diamonds, keep the one you like and mail the rest back."
Comparison is the
American way. How can we appreciate anything without something to
compare it to? Unless you're willing to do your comparative shopping
locally before buying on-line, having one or more stone mailed to
you at a time is a waste of time.
3).
Poor Warranties: The best these companies seem to be
able to come up with are 30-90 day return policies. That's it, period!
What if your fiancée breaks up with you after four months
and you don't need the diamond anymore? Tough! What if a couple
of years form now you want to exchange or upgrade? Tough! What if
your diamond is chipped or breaks? Tough! What if the diamond turns
out to be treated? Tough! Tough! Tough! Tough! After the limited
return policy is over if any thing goes wrong, you're stuck with
a diamond that you don't want. Compare that to bonded jewelers that
offer lifetime breakage guarantees, lifetime buy backs, lifetime
trade-ins and exchanges and on-line jewelers are outmatched. Who
cares how good a deal something is if you don't need or want it?
Ask yourself this question, would you buy a car with only a 30-day
guarantee?
4).
Service: I need my prongs tightened, I need my ring sized,
my ring broke. What's the Internet company going to do for you now?
All they can say is mail it back. What about the annual inspection
a ring needs? I haven't found one on-line jeweler that brings this
up much less say they will take care of you free of charge. When
it comes to service after a sale, there is no beating a local jeweler
in your area if it is at all possible. Don't get me wrong, I know
some people live in remote areas and finding a good jeweler is hard
but that should always be the first place you should begin your
search. "Only buy out of town when a local jeweler lets you
down".
5).
Will they be here tomorrow?: According to the Bloomberg
Network, only 2% of online retailers will survive! What are the
odds you'll pick the one? Is it important to you that one of the
biggest purchases you'll ever make is from somebody that will stay
in business?
Look at Levi Strauss,
they threw in the towel. The couldn't sell blue jeans on-line! In
the end they realized there is no way to know a perfect fit unless
you try it on! Can't do that on the Internet. So if an American
icon like Levi Strauss can't make it on the Internet selling $45.00
blue jeans, what makes these non-brick and mortar cyber peddlers
think they will? If I were dealing with an on-line retailer, I'd
be pretty damn sure they had an actual location I could visit and
had been around for a while. Because for my money, I want to do
business with someone who's going to stay in business. To be sure
there are silver linings.
Pros
1.) Price: Certainly the prices at these
Internet sites are very appealing. They lure you in like bees to
honey. The one thing all these diamond companies must believe is
the man with the lowest price wins. They should however check their
stats. In a recent customer survey conducted by Jewelers Circular
Keystone, November 1999, only 35% of jewelry buyers said finding
the lowest price was their primary concern. Regardless, the frosting
on the cake looks very appealing and I've seen little or no price
gouging on-line.
2.)
Selection: The companies seem to have endless inventories.
Walk into your typical jeweler and ask to look at specific a loose
diamond and you're lucky to see two or three stones. In some cases
they don't have any and say they have to bring some in. The one
thing I find interesting though, is on several occasions I decided
to add up these virtual inventories that many companies claim are
theirs and in one case the total value of one inventory exceeded
2.1 billions dollars and in another case their inventory exceeded
5 billion. How does a typical start up Internet diamond seller get
billions of dollars worth of inventory that they say they own with
start up capital of 15-20 million dollars? That's a nifty trick!
3.) Certificates & Appraisals: Every
diamond bough on-line has some kind of piece of paper talking about
how good it is. Considering there are a lot of jewelers that only
hand over a sales receipt with purchase; a third independent evaluation
with sale is a plus.
4.)
Sales Tax: It's hard to overlook, at least for the time
being, that buying a piece of jewelry on-line from an out of state
vendor can save us tons!!! In Texas where the sales tax is 8.25%
in some places, purchasing a $10,000 diamond on-line would save
you $825.00!! It's important however, to not let shipping charges,
and handling fees eat up this legitimate cost saving feature. Well
that's it for pros, as you saw in the cons, the frosting on the
cake is the only thing that's sweet!!
Conclusion
These are still
shark-infested waters; unless you have to surf the net, stay on
dry land.
Final Thoughts: Well Fred, are you telling
me that there is no way you would recommend buying on-line? No I'm
not saying that, but before I did, these would be my requirements:
1. In business,
with a brick and mortar location for at least ten years. (That way
I would know they weren't going anywhere.)
2. A clean Better
Business Bureau record.
3. A lab appraisal or lab grading reports with
the purchase (FTC approved laboratory). Also, never accept a lab
grading report older than six months! You never know where the
diamond has been or what's been done to it since it was graded.
If they are convinced their old diamond is wonderful, have them
re-grade it free.
4. A bonding document
guaranteeing the diamond is 100% natural and not treated. (Like
a pedigree proves a dog is a pure breed.)
5. Lifetime breakage
guarantee to guard against baked diamonds.
6. Lifetime cash
buy back to guarantee against any future customer dissatisfaction.
7. A lifetime exchange
policy.
8. A lifetime trade-in
policy.
9. A fair provable
price.
10. Free annual
service.
11. Knowledgeable
salespeople.
12. Good store reputation.
13. Takes all major
credit cards.
by Fred Cuellar,
author of the best-selling book "How to Buy a Diamond." More questions?
Ask the Diamond Guy®
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