Ever since the existence of trade, people have set out to earn the highest profit possible when selling their merchandise. This phenomenon propels economies in all types of businesses around the world. It shouldn’t be a surprise that a profit orientated mindset is present in the diamond trade too.
While this is not a bad thing in itself, the problem is that some people may stop at nothing to achieve that desired profit margin. Especially if it that means turning to dubious and unethical methods to do so.
And in the diamond industry, grade bumping is one of these methods utilized by unethical jewelers to take advantage of inexperienced buyers. That is why I wanted to dedicate an entire article to help you avoid getting conned and ripped off during a jewelry purchase.
As the Latin phrase ’Nomen est omen’ goes, grade bumping is the intentional misrepresentation of an uncertified diamond’s color or clarity grade by its seller. Believe it or not – while this practice is clearly unethical, it isn’t illegal. Loopholes in federal regulations make this appalling phenomenon possible and widely spread.
In fact, the Federal Trade Commission’s own regulations state that an uncertified diamond could be sold within one color and one clarity grade of what the original stone is. There are 2 issues here that I want to highlight.
The first is, what are the kind of benchmarks to use for the grading standards? Are we talking about GIA’s strict level of evaluation or referring to questionable systems from EGL? These are vague rulings that jewelers can easily twist and abuse to their advantage.
The second point is that huge amounts of money are involved in the value even with one color/clarity grade differences. Take for example a diamond with VS2 clarity and G color can typically sell for $4000. However, because of the permissive regulation, a seller can pass this stone up as a VS1 clarity, F color stone, making it seemingly more valuable on paper than it actually is. This means the jeweler can now sell the stone at a higher profit of $5000 instead.
Unfortunately for the buyer, they are usually at a disadvantage when buying diamonds since it is very difficult for the untrained eye to identify a diamond’s actual properties. Besides that, it is also possible for jewelers to manipulate the showroom’s lighting or the comparison stones you are shown in his favor.
While it may seem hard to believe that such frauds exist, don’t forget that an unethical jeweler could be thinking along the lines ’if I can do it, why shouldn’t I?’ – And once the transaction has been completed, there’s really no way back without any pre-written agreements since he is no longer legally liable for your purchase. All you can do is tell people to stay away from that place but the damage is already done.
NOT. The truth is that the cost of getting a diamond “certified” at GIA is only $105 for a 1 carat stone. This cost is relatively small compared to the price tag pegged to the diamond. From experience, I can assure you that 99.99999% of “uncertified” stones have significantly lesser quality than what it is being represented as. You aren’t getting a great deal with such stones; the jeweler is.
First and foremost, your best defense is constant vigilance. As I mentioned in the previous paragraphs, this kind of fraudulent activity is only possible in the case of diamonds without certificates from reliable 3rd party labs.
A recognizable sign of misrepresentation is that the offer simply seems too good to be true when compared to the prices of other diamonds with similar grades.
Also, an effective marketing tactic commonly used is the offer of a “huge discount” to entice you into the deal. It’s no coincidence that this great bargain is valid just for you and only for a limited time if you commit on the spot. Don’t be fooled. This is just an attempt to push you into making a rash purchase.
Another way to evade the fraud is to inquire about the stone’s certification and origins. Ask the jeweler why he did not choose to have it certified by well-known labs like GIA or AGS. Ask them how much it costs them for a certification and whether you can have any form of guarantees in writing.
If the jeweler isn’t straightforward with you or seems reluctant in answering your questions, ding him/her. If you must buy an uncertified diamond, you should make the purchase contingent on the results of a 3rd party appraisal. This should be made by an independent appraiser of your own choosing to avoid any conflict of interests.
Sometimes, jewelers may offer to have the stone examined by an “expert” of his choosing, Well, you guessed it. You are probably looking at yet another fraud attempt. Sellers often find ways to “grade their own diamonds” as they tend to be more lenient on color and clarity ratings. Do not let him intimidate or coerce you into doing so. After all, it’s your money that’s involved in this transaction. If he is reluctant to agree to have the diamond inspected by someone else, you know he’s hiding something from you.
The best solution is that you should never even consider buying a diamond without a certification no matter how reliable the vendor appears to be. My recommended labs for accurate diamond grading are GIA and AGS and you should only purchase diamonds that had been graded by either lab. That way, you can eliminate any doubt about the seller’s trustworthiness and you will be sure the diamond you purchased actually has the qualities you had paid for.