The Pit: Gem Treatments – Friend or Foe?

Editor's Note: The Debate Centers (The Pit, The Jungle, The Ring) were purposely not recorded so participants would feel comfortable to speak freely. The panelists, however, agreed to let us use their names and quotes to provide more context and perspective to the discussion for our readers.

By Robert Weldon

Disclosure of gem treatments has grown increasingly complex as the treatments become more high-tech. That was the consensus of a panel of gemstone dealers, educators and experts who gathered to debate the benefits and detriments of gem treatments.

One thing became immediately clear: all agreed that gem treatments are here to stay. Although they disagreed on whether or not treatments should be considered beneficial to the market, the Debate Center attendees agreed on the general principle of disclosure.

John Emmett, a physicist and consultant on treatments, quoted a gemstone mantra: "As long as you disclose, anything goes."

That may sound great, he said, but do retailers know exactly what disclosure information to pass along?

"The answer to that question is unfortunately 'no' in many cases," he said. "Even some gem laboratories are not able to state definitively what treatment a gem might have received – a proposition that erodes consumer confidence in the gem business."

An audience member pointed out that consumers tend to perceive a parallel relationship between treatments and price: as value for a gem goes up, interest in knowing if it is treated also rises. Conversely, if the price for the gem is low, there is little or no interest in learning all there is to know about the gem, she said.

Major retailers, such as television sales networks and other mass merchants, unwittingly force their suppliers into selling more and more treated gems in an effort to fill large, uniform (but unrealistic) orders, an audience member said.

"Disclosure must occur at every level," said Israel Eliezri.

He also hinted at a broader approach to disclosure, suggesting consumers be told that almost all gemstones are treated.

While nobody disagreed that most gems are treated, Antoinette Matlins objected to having all gems, including non-treated gems that should sell for a premium, lumped into one category.

"That would denigrate the rarest and most valuable of all gems: truly natural, untreated sapphires, rubies and emeralds, and also gemstones – such as spinel, iolite, most garnet and peridot – that are not usually treated," she said.

Moderator: Letitia Chow, founder and group publisher, Jewellery News Asia
Panelists: Israel Eliezri, president, Colgem-Coldiam Ltd.; Dr. John L. Emmett, president, Crystal Chemistry; Bev Hori, vice president, Ben Bridge Jeweler; Richard W. Hughes, gemological administrator, AGTA Gemological Testing Center; Antoinette Matlins, president, Antoinette Matlins LLC; Stefan Mayer, co-owner, Heinz Mayer OHG

The Jungle: Appraisal Issues – Searching for Value

By Jaime Kautsky

With its long lines of hopeful treasure owners waiting just to get in the door, PBS' "Antiques Roadshow" has captured the public's interest in the appraisal process like few other things before it.

Trouble is, they're not exactly appraising, said Gail Brett Levine in "Appraisal Issues: Searching for Value."

"They go to a commercial break, and say, 'We'll be right back with more appraisals,' and they are not appraisals," said Levine, a Graduate Gemologist.

Hedda Schupak, editor-in-chief of JCK magazine, moderated the debate that covered many hot-button issues – some quite longstanding – in the jewelry appraisal community, such as Levine's pet peeve with the popular television show's nomenclature.

One dilemma panelists and audience members agreed on was the proliferation of inflated appraisals.

"Our main concern is accurate appraisals," said panelist Ron Harder. "What we're seeing isn't adequate for us to replace [the lost or stolen item]."

Charles Carmona agreed it is "a major problem."

"There are several large 'appraisal mills' that churn out thousands of highly inflated appraisals every day without regard to any ethical or gemological standards ⿦ They have no place in an honest, ethical, fair and competitive business environment," he said.

In addition to "appraisal abuse," issues like the lack of formal accreditation, education or a system of accountability for appraisers raised concern among panelists and audience members.

"There is no law that dictates who can and can't appraise," said Jerry Ehrenwald. "For jewelers to educate themselves on what actually is an appraisal is key. It's fundamental."

An audience member who works for the Jewelers Vigilance Committee (JVC) urged those who disapprove of the fraudulent "appraisal mills" and dishonest competitors to "put your money where your mouth is and sue" them. "The industry should confront these people and stop it," she said.

Several audience members expressed discouragement with the lack of unity in the community and wished the insurance companies, legal groups and appraisal associations would take responsibility for their roles in these issues. Most seemed hopeful that the situation could improve.

"The issue here is enforcement. We need an organization to appraise the appraisers," one audience member said. "Is our industry capable of governing itself? How can we protect our industry, and do it together?"

Moderator: Hedda T. Schupak, editor-in-chief, JCK magazine
Panelists: Cosmo Altobelli, president, Altobelli Jewelers; Charles I. Carmona, president, Guild Laboratories, Inc.; Richard Drucker, president, Gemworld International; Jerry R. Ehrenwald, president, International Gemological Institute; Ronald R. Harder, CEO, Jewelers Mutual Insurance Co.; Gail Brett Levine, executive director, National Association of Jewelry Appraisers; Tom Tivol, president and CEO, Tom Tivol Jewelry and Gemstone Appraisals

The Ring: The Great Internet Debate

By Russell Shor

The Internet may have snatched sales from traditional retail jewelers, but retailers can successfully battle the competitive threat of this expanding marketplace. At least that was the consensus in "The Great Internet Debate: Ride the Wave or Wipe Out."

Moderator Cheryl Kremkow polled the audience with an instant voting system and solicited responses from the panelists.

A key question was whether diamonds were cheaper on the Internet; 78 percent of the audience responded "Yes."

That may be so, Elizabeth Chatelain noted, but consumers want to buy from someone who can earn their loyalty. "This is the big advantage of brick and mortar stores," she said.

Jonathan Weingarten said today's consumers do a great deal of research on the Internet about products and prices and often know more than a store's staff.

"Frankly it's embarrassing to see that happen," he said, adding that it's crucial to have a well-trained sales team.

A jewelry designer in the audience added that retailers need a niche because "if you sell the same products that are offered on the Internet, you will get killed by the competition."

Au-Co Mai noted that retailers have the opportunity to romance their products, "but those who treat their products like a commodity will get commodity-like margins. Customers will go for the cheaper price if the retailer does not focus on selling an experience or providing value added services."

Weingarten, who sells a significant amount of jewelry over the Internet and in his store, said he uses his Web site to reinforce his staff's expertise and reputation.

One advantage Internet sellers have over retailers, an audience member said, is that buyers usually do not have to pay sales tax. The audience was split 50-50 over whether those transactions should be subject to such taxes in the purchaser's state.

Some retailers said an Internet sales tax would level the playing field, particularly on big-ticket items. One audience member also pointed out that different from many Internet sellers, local retailers support their communities through taxes, employ people and provide them benefits; these factors make a level playing field difficult.

Mai countered that many traditional retailers also sell online and that mail order and catalog operations do not collect sales taxes from buyers outside their home states. "If you change the law for the Internet, you will have to do it for everyone," she said.

The Internet is not the force in European retailing that it is in the U.S., said Niels Ruddy Hansen.

"If you buy from other European Union countries, you must pay the Value Added Tax of the country where you purchase. If you buy from countries outside the European Union, you must pay the Value Added Tax of your country of residence, which can be as much as 25 percent in Denmark and Sweden," he said.

Moderator: Cheryl Kremkow, editor in chief, Modern Jeweler
Panelists: Elizabeth Chatelain, CEO and co-founder, MVI Marketing Ltd.; Niels Ruddy Hansen, general manager, Niels Ruddy Hansen APS; Au-Co Mai, CEO, Emitations.com; Dr. Leonid Tcharnyi, founder and CEO, Pricescope, Inc.; Jonathan Weingarten, vice president, Good Old Gold

Audience Insight: Do you agree with the masses?
Click here to see how attendees at "The Ring" Debate Centers responded to major industry questions with the help of their electronic voter keypads.