In today’s blog post, we’re going to describe 11 of the most common deceptive and unethical business practices in the jewelry industry-- some of which are just outright scams.
In some cases, police and governments have gotten involved. But in most cases, it’s up to ethical jewelry companies to call out the bad actors in our industry.
While we don’t do that by name here, today, you the consumer can follow the breadcrumbs pretty easily to determine if jewelers you’ve bought from (or are considering to buy from) are guilty of these actions. Some of these scammers can be very intelligent and sophisticated, but most scams are simple to spot if you’re forewarned with knowledge.
We hope once you see these things for what they are, we can rest assured that our friends and customers won’t be deceived (again).
With no further ado, the list...
1. Fraudulently passing off cubic zirconia as diamonds to sell at inflated prices.
No list about jewelry scams would be complete without mentioning how frequently high-quality cubic zirconia stones are passed off as diamonds.
Of course, every day our customers pass off our 5A/AAAAA diamond-quality cubic zirconia stones as diamonds-- at work, social situations, and family functions. Couples who choose cubic zirconia together have every right to do that if they want to take advantage of the “Diamond Mystique” wherein everyone assumes it’s a diamond they’re wearing and they never correct them. As far as we’re concerned, even if they decide together to outright claim the stone to be a diamond, that’s none of our business.
There’s no victim in that kind of personal “pass off” and we’re happy to empower couples to make that choice if they want to do so (search “Diamond Mystique” on our website for related articles on handling this conversation IRL).
On the other hand, deceptively selling a 50 dollar cubic zirconia as a natural diamond with a price tag of tens of thousands of dollars? That’s fraud...and unfortunately, dozens of jewelry professionals in the United States alone are caught doing it every year-- some who’ve been pulling the scam on unsuspecting customers for decades. Be wary!
2. Blue fluorescent lights in jewelry stores create deceptive optical illusion.
Some retail diamond jewelry stores invest in special, expensive overhead lights that emit blue light waves. It’s usually undetectable to the human eye, but on a physics level the bluish lighting actually makes less-than-perfect, cheap yellow diamonds appear more white/clear to the human eye (and therefore allegedly more valuable).
We are on the record stating we believe that this practice is deceptive (even though it’s not illegal). After all, the buyer of that crappy diamond isn’t gonna leave the shop and live his/her normal life under blue-wave-emitting lights; instead, he/she will be stuck with a crappy, overpriced diamond-- one that looks crappy and overpriced as soon as they leave the store. The store may claim insurance policies prohibit letting you look at the stone outside under sunlight, but that’s what you should demand before spending.
3. Price pump and sale dump tactics are rampant in the jewelry industry
If you’ve ever been on a cruise and gotten off to eat at a restaurant near the pier, you’ve probably seen this trick in action-- or even been duped yourself. For example, I know of one restaurant that locals knew to be having a supposed “60% off seafood” sale for 15 straight months, but none of the new cruise ship excursion customers there for one day ever had a clue. It irks us that this kind of shady practice isn’t illegal in most countries.
Some jewelry companies-- and especially daily deals sites online-- artificially inflate the price for their items...and then drastically discount them to create the illusion of a “bargain”. If they can mark it down at 60, 70, 75 or 90% off on any given day, that’s not a discount-- it’s the price. To our way of thinking, if the buyer is misled even without breaking the law, it still boils down to a scam. Most consumers are too smart for this crap, but unfortunately there’s enough dumb ones to keep these jerkoffs in our industry in business (sorry if that’s too blunt).
4. Customer relationship trust abused for personal profit without scruples
We recently received a call from a North Palm Beach, Florida diamond jeweler who had seen the quality of our stones and wanted to place an order on behalf of her long-time customer. Her customer had hired her to make a piece of sapphire custom jewelry and asked her to use the best quality cubic zirconia stones, too. We were happy to help. The catch? This sketchy jeweler wanted us to provide a fraudulent invoice jacking up the price of our $45 stone to include a $400 profit for her for each one.
Her justification for asking us to do this: “My customer will spend as much as I tell her to spend”. We refused to be party to such deceptive practices, and she countered that her customer wouldn’t believe we charge less than fifty dollars. When we suggested she have her customer buy the stones she’d pre-selected from us directly and have it shipped to the NPB jeweler...this piranha lady refused and hung up the phone. We wish we could say things like this were rare in the jewelry industry. But that would be a lie.
5. Loopholes allow the sale of cheap costume jewelry made of materials known to be toxic.
There are numerous legal loopholes for jewelry to be sold when it’s known to be made of materials that are toxic, including: lead, mercury, chromium, arsenic and cadmium (can cause cancer, kidney failure, bone damage and miscarriages in adults as well as brain dysfunction in children).
We discuss some of the loopholes and companies who’ve profited from these scammy and dangerous jewelry sales on the blog here: The Toxic Jewelry Problem Non-Manufcaturer Retailers Have with Cheap Jewelry.
It is our opinion that jewelry sold to men, women and children made with toxic levels of substances known to be poisonous are a scam-- at any price-- and a deadly one. The retailers and jewelers who follow the letter of the law and sell these cheap, known-to-be-toxic jewelry items using legal “loopholes” are not worthy of your money when they’re willing to put people’s health at risk to make a buck.
6. “Buy direct” tourist gemstone scams on the street
For tourists visiting areas where many tourists often congregate, buying raw gemstones from sellers that solicit you on the street is often a very bad idea.
Everyone has heard about fake Rolexes. And who hasn’t been in a vacation spot and aggressively approached by the timeshare pushers? But many consumers have no idea how prevalent scams are with person-to-person gem sales. The scam is common around the world but most noted in Thailand, other Southeast Asian countries, the Caribbean and Mexico.
While it is possible for a well-informed, prepared consumer to get a good deal buying natural gemstones direct from individuals in the countries where these stones are mined...many of the transactions we’re talking about take place with unsophisticated buyers that have no gemstone knowledge or ability to test for genuine stones. Indeed, the scammers brazenly approach travelers right in the streets, offering fake or poor-quality sapphires, diamonds and rubies at what are described as “bargain prices”.
This is one instance in which the savings one may get buying something “direct” rather than through middlemen-- such as jewelers that can inspect, appraise and certify natural stones-- is usually not worth the risk. If you’re interested in genuine colored gemstones, we can use our jewelry credentials to get them for you from the same reputable suppliers we use in our own jewelry pieces requiring colored stones (for more information and colored natural gemstones at wholesale prices, please see our “Materials for Manufacturing: Other Stones” FAQ section ). All we ask for providing the colored stones sourcing service is that you be a past or current customer of our fine cubic zirconia jewelry.
7. Inconsistent or unreasonable return policies
Before you buy jewelry or gemstones from any jeweler or retailer, a buyer should review the company's return policy and make sure you can send back your purchase for a refund if you're not happy with it. We feel this is especially important for making purchases online, that you should have a time period to return the item for a refund (if when you see it in person it’s not what you wanted or thought it would be).
Just FYI, it’s normal in the jewelry industry for a buyer to pay return shipping and insurance fees for securing the returned order package in transit back to the seller. In the world of Amazon and apparel, free returns are common. With jewelry, however, that’s not always the case. We’d even consider it normal for there to be a small restocking fee (e.g. we charge 10% in our policy you can read here). But if the business is charging an unreasonable return fee or restocking fee that equals 50% of your purchase, that’s just downright unfair. A company like that is banking on customers never reading their return policy. And those companies are more common than you think. So make sure to ask and see it in writing!
8. Ignoring wholesale precious metals cost fluctuations when setting retail jewelry pricing
Did you know the costs jewelers pay to buy the precious metals with which we make jewelry actually fluctuate daily? If you're making an expensive jewelry purchase in gold, palladium, or platinum, check the jeweler or retailer's website a few times over the course of a month or so and see if the price changes regularly. If it doesn't, and metal market prices have fallen (track them here)...then, in our opinion you're being asked to pay too much!
We believe it’s fair pricing when we make the same profit no matter what our precious metals hard costs are to make your jewelry. So our retail jewelry prices fluctuate weekly with the fluctuation of the hard costs we’ll incur to make a customer’s order. Very, very few jewelers share the savings with customers when their cost to make a jewelry product goes down. We do. Read a bit more here about how this dynamic pricing policy benefits our customers.
9. Some jewelers stick it to wedding-prep customers with the “wedding price premium”
It’s been proven many times by consumer watchdogs that any product with the word “wedding” in its title usually gets marked up by vendors multiple times beyond the normal price that item would sell for any other time.
We have a special email series just to help our customers avoid and minimize the dreaded wedding day price premium (just email us to request it!). Two identical cakes looking the same and made by the same maker of the same ingredients in the same way shouldn’t be sold for $300 difference in price because one of the cakes is a “wedding cake”. Same goes for dresses, DJs, stationery, catering, party rentals and so much more.
We want to make sure our customers don’t overpay for wedding bands because of the wedding price premium. Here’s the bottom line from a jeweler with many years experience making and selling multiple types of jewelry: simple, plain metal wedding bands should be super cheap compared to complex jewelry designs with many stones, intricate detail-work and much labor needed.
For example, if you are (or become) an engagement ring customer of ours, give us a chance to earn your order on wedding bands for him and her, too. We think you’ll be very pleased with the price savings of our wedding bands over comparable gold, palladium or platinum designs sold by other companies. We even extend 2-ring and 3-ring discounts for customers that make multiple purchases at the same time-- or within 60 days.
10. Underkarating of gold and selling “plated” or “filled” products as precious metals
This practice is rampant outside the United States. A dishonest seller can stamp "14 karat” on a piece of metal that has little to no real gold in it at all.
Unfortunately, in many countries, the legal consequences are very minimal for bad actors getting caught selling something as “gold” that barely has any gold in it.
In the United States, the sales of precious metals and products made with them (such as jewelry) are heavily regulated. One such consumer protection is the Federal Trade Commission (FTC). Another is the National Gold & Silver Stamping Act. These laws have real teeth to protect shoppers from fraudulent merchants who make false claims about gold karats or platinum purity.
Due to inconsistent international regulations, we believe you should avoid buying products that are claimed to be “precious metals” from non-U.S. firms (unless it’s from a firm in a country where you know they have similar laws and consequences).
The tests required to make sure that your purchase is not “plated” or “filled”--unless that’s the kind of cheaper jewelry you want to purchase and are purchasing with that knowledge disclosed-- isn’t easy for a layperson.
Plating or filling should be clearly marked on any piece a jewelry retailer offers. A reputable, honest jeweler or retailer will make sure you know what you are buying. If you want to learn more about this topic, and how to protect yourself from untrustworthy companies-- especially abroad outside the United States-- a good place to start is our blog post: “‘Chicken Cordon Bleu’ and Real vs Fake Precious Metal Purity”
11. When that 'diamond' jewelry in the case at your local jeweler is...actually cubic zirconia
There’s a new kind of jewelry store where few to none of the loose stone “diamonds” on display in these stores are actually real diamonds. Instead, they're actually CUBIC ZIRCONIA STONES! MANY of the pieces you're shown locked in jewelry cases at these large, well-known retail diamond franchises are actually diamond replicas set with top-quality cubic zirconia for the primary center stone instead of a real diamond-- quite the shocking secret these diamond jewelry stores don’t want you to know!
In their business model, the shopper is just allowed to believe everything he/she sees in the diamond store’s display case is indeed a real diamond. It’s sneaky, but not illegal. For years, we didn’t call the diamond retailers out on this practice. Now we’re calling them out: That 'diamond' jewelry in the case at your local jeweler is...actually cubic zirconia.
We promised 11 scams for you to look out for in today’s message.
And we’ve shared eleven.
But in our opinion, one more is what we personally believe to be the biggest jewelry scam of them all.
Indeed, we believe that in the history of business, mankind has never known a mass-marketed product or commodity more overpriced than the naturally-mined diamond.
That’s a bold statement.
Yet every single day we prove it that the diamond cartel created a ridiculously inflated pricing scheme for natural diamonds in the last 100 years.
Want to see how we'll do it next?
Simply send us an email and request our “Diamond Doubters Manifesto: The 9 Great Lies of The Diamond Cartel”...and prepare to have your curiosity tickled and mind blown. If you’d like to go on believing natural diamonds are rare and valuable…don’t read the Diamond Doubters Manifesto!