Posts Tagged 'What you should know about Diamond Grading'

Chocolate, Champagne, Cognac – Better to eat & drink, or to wear?

December, 13 2012

Chocolate, Champagne, Cognac – Better to eat & drink, or to wear?

Now that the holiday shopping season is in full swing, I thought I should shed some light onto a few things I have noticed. Granted I started seeing holiday shopping guides, commercials, and advertisements the day after Halloween, but now that we are mid-December, it seems the jewelry industry especially is pouring on the deals and bargains for “luxury” and high end items.

The most common commercial I have seen is one involving chocolate diamonds, and how to “upgrade her craving for chocolate” by purchasing an exclusive and rare chocolate diamond ring, necklace, or bracelet.

I find these commercials, like most marketing, to be misleading. By the same token, I recognize that beauty is in the eye of the beholder, and that many people like the look of chocolate, champagne, or cognac diamonds. My goal for this article is just to give the rest of the story – you know, the one the jewelry industry sometimes leaves out.

As a quick refresher, diamonds are typically graded for their absence of color in the D-Z color range. Any diamond that displays a hue of color found in a rainbow, other than yellow or brown, is graded as a fancy color. Diamonds that display a yellow hue that is outside the Z color range is still considered a fancy color, while brown is not. The GIA (Gemological Institute of America) recognizes 27 hues, or the basic impression of color, for color-grading diamonds brown is not one of them.

Circ Graph

Legend for Graph

Note: The predominate hue is stated last. Source: GIA – Winter 1994 Gems and Gemology Article.

Brown diamonds are considered to be low quality, and until the 1980’s were considered industrial quality only.  It was during this time that abundant quantities of them appeared from the Argyle mines in Australia.

Given the diamond’s poor quality, and that the diamond market did not recognize brown as a fancy color, the Australians took a creative route. They began setting these diamonds in jewelry and gave them names like “champagne” and “chocolate” – words that evoke ideas of luxury.  Needless to say the marketing worked and brown diamonds are not only the least rare, but are also the most common diamond color to be found in medium-priced jewelry designs today.

So, if the one you love is perhaps “craving” something a little different, and is interested in having a brown diamond, just keep these things in mind when shopping:

1)   Brown diamonds range greatly in tone, or their relative amount of lightness or darkness. You want to look for one that has a medium to dark tone, with a warm, golden to reddish appearance.  These look the most vibrant when used in jewelry, and still maintain some of the brilliance that is expected of a diamond.

2)   Brown diamonds should be sold at a considerably lower price point than their colorless counterparts. If you think you are paying too much, you probably are. There are other gemstones that have a similar appearance to a brown diamond, but are sold at a fraction of the price. – Consider a Smoky Quartz, Imperial Topaz, or Brown Tourmaline as some alternatives.

Regardless of the amount of marketing, advertising, and sales that are going on this holiday shopping season, being an informed consumer is the most important thing. Always do your own research, and ask questions! MJ Gabel is ALWAYS available to answer questions, or address concerns that people have about a jewelry purchase. We are happy to guide, educate, and consult with consumers so they can make an informed decision.

As the holiday approaches, please remember what this season is truly about – it’s not about the gifts, the money, or the diamonds! This season is about spending time with the ones you love, giving back to your community, and be thankful for all the things, small or large, that you are already blessed with. Happy Holidays!

If you are unaware of what your diamonds characteristics are, contact MJ Gabel and take advantage of a free diamond evaluation.

www.MJGabel.com

800-804-1980

When a Diamond isn’t Forever

When a Diamond isn't Forever

MJ Gabel understands the value of your diamond pieces, and respect the importance of feeling valued as a customer.

November, 16 2012

Diamond Déjà-vu

Written by Anne Johnson, 
Managing Director at MJ Gabel

Three times last week I felt like I was having déjà-vu. That feeling like you have already been somewhere before, or had a similar conversation but you cannot place it. I quickly realized that it was not déjà-vu but rather I actually was having the same conversation multiple times. They all went something like this:

Anne – “Can you give me an idea of the amount you would like to see out of your diamond?”

Client – “ I did not have an exact figure in mind, but I know what the diamond is worth because of what I paid for it, and it was appraised for even more than that.”

This seems to be one of the most common conversations I have with clients and where I happily began to give all three clients an insight into the diamond market.

If you were to sell your current vehicle, what would you do to determine what price to ask for it? Would you just go by what you paid for it, take 50% off that price and hope for the best? Or would you do some research into what a realistic number would be to be competitive in the market?

Most would use the prices of other cars for sale locally as a guide as well as looking at the Kelly Blue Book value to find an estimate.  The problem with re-selling a diamond is that while there is a similar reference guide to the Kelly Blue Book for diamonds, it is not available to the public. This leaves only two numbers that consumers know about their pieces; the price they paid for it, and how much the piece was appraised for.

The problem with both of those numbers is that they are retail values. An appraisal value is only reflective of what the diamond is worth in a retail environment and NOT representative of what an individual could assume to sell the piece for. Moreover, as discussed in previous posts, the retail value of a diamond includes all of the jewelers mark-ups, and profit but when you go to sell that diamond, you are only working with the value of the stone itself.

So how is someone supposed to know what a realistic asking price for his or her diamond would be? The simple answer is to call MJ Gabel and speak to one of our representatives who will happily consult with you FREE OF CHARGE!

In order to get a feel for what similar pieces are currently priced and and to start to become familiar with the resale marketplace; here are some observations.

Number one: Go to Bluenile.com and find a diamond similar to the one you own by using their diamond search. Blue Nile is the largest e-retailer of certified diamonds. Their price points are lower than any brick and mortar jeweler, and only slightly higher than wholesale prices. This would be the equivalent of finding out what car dealers are asking for your car.

A good starting asking price for your diamond would be about 30% below the BlueNile price. This is because although BlueNile prices are less than those of your local jeweler, they are still retail prices.

Number two: Look at what other people are trying to sell their similar diamonds for on places like Craigslist – Check out your competition!

I speak with many clients who have already gone to a local jeweler only to find that the jeweler is uninterested in purchasing the diamond, will only give the client a trade value towards new jewelry or whose cash offer is insultingly low. On the other hand, on more than one occasion I have had this conversation:

Client: “My jeweler told me my diamond was worth XYZ”

Anne: “Is XYZ what the jeweler offered to purchase the diamond from you for?”

Client: “No, they do not buy back diamonds.”

As discussed in previous Blogs, the reason why many jewelers choose not to buy diamonds back from the public is because they would have to disclose their own mark-ups. Consider this in light of the numbers jewelers throw around; they are in the business of selling jewelry and are the ones who made between 200-400% profit on the original sale of your diamond. Therefore, unless the price they quote you is what they will actually purchase the diamond for, it is irrelevant. Always make sure they are specific, that the price is a cash offer and that it is:

NOT what they think you can sell the diamond for

NOT what they would sell the diamond for

NOT what they would appraise the diamond for

Diamonds are forever may be true; regardless of what the jeweler may lead you to believe, diamonds are not a good investment. Unfortunately you may never be able to recoup the full amount you paid for the diamond. In order to get the most back from your diamond, do your research. Know not only what you have, but also what a realistic amount to expect is going to be. Consultations and answers to questions are ALWAYS available at MJ Gabel.  It will only cost you the time it takes for a phone conversation, or to type an email to obtain information that could mean the difference of thousands of dollars in your pocket. MJ Gabel is always available to help clients navigate the diamond industry, and to recoup the maximum amount from the sale of their diamond.

If you are unaware of what your diamonds characteristics are, contact MJ Gabel and take advantage of a free diamond evaluation.

www.MJGabel.com

800-804-1980

 

The Power of the Diamond Consult

The Power of the Diamond Consult

Written by Anne Johnson, 
Managing Director at MJ Gabel

In a busy season that has been filled with client appointments, phone consultations, and auctions this past week has stuck out above all others. I had two appointments this week that resulted in some reflection and a new drive that I feel is important to share!

As I entered this business, I thought I would be putting my bachelor’s degree in social work into my bag of tricks, but not really ever using it – I was quickly proven wrong! I realized quickly that having my social work degree only helped me interact on a daily basis with my clients.

As a diamond buyer, buying from the public, I often only get the opportunity to speak with clients who are going through some life-changing event. Sometimes they are upgrading a diamond for an anniversary but more often than not their visit tends to be a result of  a broken relationship, divorce, or financial difficulties. It has always been apparent to me that most clients are not only trying to navigate the difficult waters of selling their diamond, but also trying to keep their head above water while dealing with all of the emotional turmoil the sale of that diamond can represent. Keep in mind that most diamonds represent an emotion, and were given at a time of great happiness and love.

What pains me, is when those difficulties are compounded by the fact that a client was given inaccurate information from their jeweler about their diamond. Small variations in the way a jeweler graded a diamond all the way to how much a jeweler inflated a diamond’s value are not uncommon occurrences in my daily discussions with clients. What struck me about my two clients this week was that although the circumstances were different the extent to which the information I provided affected them the same way.

One of the cases was a former client who had come to the difficult decision to sell another diamond that she had been reluctant to part with. She returned to work with me again because I had been able to give her more for the sale of her original diamond then she had been offered by others. Upon viewing the current stone in question however, I quickly realized it had been clarity enhanced.

A clarity enhanced diamond is one that has been laser drilled and then either filled with a compound, or bleached in an attempt to diminish the inferior clarity characteristics it displays. Since part of a diamond’s value is based entirely on the fact that it is natural, once altered, much of the diamond’s value has all but disappeared.

As many of you can appreciate, my client was devastated when I showed her and explained what this meant to the diamond’s value. What bothered her and myself the most was the fact that the jeweler she had purchased the diamond from had not disclosed this information to her at the time of the sale.  She graciously thanked me for letting her know the truth, and was going to attempt some recourse with the jeweler. She left knowing that we were available as an alternative, and that we would happily assist her in selling the diamond specifically to buyers who work with clarity enhanced stones.

The second occasion was a new client who was a single parent selling the ring to pay for a down payment on her new home. A local jewelers had appraised the diamond as a Round Brilliant SI1, G-H diamond and valued it as $21,000.  Upon grading the diamond in our lab, I determined that is was truly a VS1 (two clarity grades better), and a K (three color grades below) color. While the clarity grade was actually better than reported, the color ended up hurting the value of the diamond. I showed her how I came to my conclusion, and her response turned out to be one of relief.

While disappointed with the truth, she was glad to know what she had and happy that she had not sold the diamond privately. She felt she would have been devastated if she had sold it to someone under the false pretense of a poor appraisal only to have them return unhappy and wanting their money back.

It occurred to me that while I take great pride in our company’s ability to retrieve the highest amount possible for a client’s diamond, I also strongly believe in our consulting services.  In both cases, while the truth can be disappointing to hear, both clients were grateful and appreciative in knowing that we had taken the time to view their diamond and to report the truth back to them. Both clients now know what they have, as well as all of their options for selling their pieces.

I, or any of our representatives, will happily take the time to not only evaluate your diamond FREE OF CHARGE, but also discuss ALL options available to you should you decide to sell it. Even if a client does not use our services immediately and attempts to sell their diamond privately only to return to us at a later date, it is still time well spent.

My job is not only to help you to get the most out of the sale of your diamond, but also to provide the information you need to make an informed decision. As long as I, or any of us at MJ Gabel, can help make this moment in time a little easier, it is worth our time.

If you are unaware of what your diamonds characteristics are, contact MJ Gabel and take advantage of a free diamond evaluation.

www.MJGabel.com

800-804-1980

Ethical Standards in the Diamond Retail Industry

Written by Anne Johnson, Managing Director at MJ Gabel

I want to start off by pointing out that these are blanket observations, and are my own. There are many loyal, trustworthy, and honest individuals in the diamond retail business and it is important to give them credit for their efforts to keep the industry ethical, and to keep hard earned consumer confidence.

Ethics. They seem simple enough to understand, but somehow are easily passed over, forgotten, or slipped.  Every sector of business, education, religion, even our lives has it’s own set and variety of ethics. Many overlap, and are fairly standard “rules” or moral principles of conducting oneself in a socially agreed upon way. As a quick example; just as most individuals would not take a cookie out of a small child’s hand, a business owner should not misrepresent a piece of merchandise to a potential client.

It has unfortunately been my experience lately to work with clients who have been misinformed regarding a diamond they were sold. Whether the color or clarity was not clearly explained (or worse was misrepresented), to carat weight being discussed in very general terms such as fractions. In the diamond industry, as with any sector of business, it is unethical to misrepresent the value, characteristics, or performance of any item. This includes misrepresenting or misleading a diamond’s characteristics in any way to the consumer.

As with any industry there have been growing pains and learning curves that the diamond industry has needed to over come. One of which was how to represent the characteristics of a diamond consistently and accurately in a way that was universal to everyone in the business and could be translated easily to consumers. These are now known as the Gem0logical Institute of America (GIA) color scale of D-Z, and the 11 grades that make up the GIA clarity grading scale. In addition to these scales, the standard of practice is to represent the carat weight of a diamond in decimal form to the nearest hundredth of a carat.

A diamond that was sold as “a carat” may in fact end up weighing 0.97cts, and stating it as being a carat is just plain wrong. While this distinction may seem slight to many, it is unethical to the industry, and will translate to a decrease in value upon resale. All things being equal, there is a fairly large value difference in value between a 1.00ct diamond and anything below that “magic number”. In regards to this common selling practice, Section 23.12 of the US Federal Trade Commission (FTC) Guides for the Jewelry, Precious Metals, and Pewter Industries clearly states that giving carat weight in such general terms without further explanation of the exact carat weight is “unfair and deceptive.”

The same is true with misrepresentation of a diamond’s clarity characteristics and color grade. More often than not, most individuals were told when they purchased a diamond that it was “flawless”, “near flawless”, or “perfect.” To be direct, very few diamonds have a clarity grade of “internally flawless”, and even fewer have a grading of “flawless.” Again, the FTC in the same publication, section 23.17 states in regards to describing clarity:

“It is unfair or deceptive to use the word ‘flawless’ to describe any diamond that discloses flaws…[and] is unfair and deceptive to use the word ‘perfect,’ or any representation of similar meaning, to describe any diamond unless the diamond meets the definition of ‘flawless’ and is not of inferior color or make.”

Using such general descriptions of a diamonds characteristic’s is not only extremely misleading, but gives an unfair representation of the diamond’s value.

Education and knowledge about what you are buying is the only way to know for sure that what you are paying for is what you are getting. When shopping for a stone, it is important to ask clear questions to what you are purchasing.

“What is the exact carat weight?”

“What is the diamond’s color grade?”

“What is the diamond’s clarity grade?”

Asking specific and direct questions helps to ensure that the information you are receiving is correct, and not just general terms to describe the diamond. Keep in mind that purchasing a GIA certified stone (one that has undergone independent GIA lab verification of it’s characteristics) is the only sure way of knowing that without a doubt your one-carat, colorless, flawless diamond is in fact a 1.00ct, D Flawless diamond.

If you are unaware of what your diamonds characteristics are, contact MJ Gabel and take advantage of a free diamond evaluation.

www.MJGabel.com

800-804-1980

Taking a Step Back


Written by Anne Johnson, Managing Director at MJ Gabel

In our previous blog posts, I have written mostly about the process and mechanics behind the diamond industry. Truths about the actual value of diamonds, as well as how they reach their price tag value by the time they reach a woman’s finger. While our website sheds light onto our massive crush on diamonds and personal interaction with clients, I thought I would take the time to explain why we are different than other companies. Let’s spell it out.;

I often use a car analogy when speaking of diamonds because it is often the easiest for most people to relate to, so humor me once again. If you are in the market for a new car, you go to a car dealership and someone who specialized in selling cars- they do not make the cars, or for that matter buy them back (unless it’s a trade), sells one to you. Many times consumers will do LOADS of research on the right car for them, and how and where to get the best price.

Jump a few years, and it’s time to upgrade or your just ready for a change. You may opt not to take the car to the dealer because you know they a) will not buy it back with cash and b) if you trade it in, you will take a massive hit. Your choice becomes selling it on your own, or trading it and taking less for it than both you and them know its worth.

Most people do not do nearly as much research on how to sell their used car, as what they put into finding the best price when purchasing it. If we were in the car business, this is where we would come in! Even though our love is diamonds, we can still apply this same scenario to the diamond marketplace.

The majority of individuals do not to nearly as much research on diamonds as they do with cars before they buy. In fact, the majority of customers know very little about their diamond when they buy it, and only when it comes time to sell it does the research begin. Like a car, consumers know what they paid for their diamond. This becomes usually one of two pieces of weaponry in their knowledge arsenal. The second piece is an appraisal that has been done on their diamond. With these two numbers in mind, most consumers believe that they must be able to get at least half or more of these two values.

In contrast to selling a car, the jeweler is often the first place a consumer might stop to sell their diamond back. Like a car dealer however, the jeweler really only sells diamonds, and their offers tend to be similar to a trade in value since they will need to make a profit again if they buy the diamond back. Thus, individuals tend to travel around looking for what different sources will offer them for their pieces. They hear a low number, and move on to the next stop.

This is precisely where we differ from others. Instead of just giving you a number, we walk you through exactly how we came up with that number. We take the time to illustrate for our customers how every aspect of their diamond has played a role in the price we have calculated. In addition, instead of just shooting a low offer out, we are happy to give you alternatives if we believe we can help you get more for the piece. The value of the stone is nothing compared to the consumer feeling valued as a client and that their best interest is our priority.

In the car market, consumers utilize Kelley Blue Book, or Edmunds as a resource to tell them what their car’s value is and what they can expect to get for it. We are to diamonds what those companies are to cars! The only difference is, we value the connection you have to the piece, how much you spent on it, the importance of educating the consumer, and the basic human interaction involved in selling it. The other difference is, unlike Edmunds or KBB, with MJ Gabel we will pay you the price we acknowledge your piece to be worth, or happily broker a transaction that will.

MJ Gabel / Diamond Buyers

www.mjgabel.com

800-804-1980