American Gem Society Fall Spectra Page 20

SPECTRA

| The American Gem Society

Education

Update

Express and Implied Warranties

May Trump Return Policies

By Suzan Flamm,
JVC Assistant General Counsel

In an occasional series of articles, the Jewelers
Vigilance Committee demonstrates how its
expertise can help jewelers comply with federal
and state law. Proactive compliance will
minimize the risk of litigation to individual
jewelers, and improve the image of the industry
as a whole. In this article we discuss a topic of
great importance to all jewelers: the warranties
that accompany every sale. The bottom line?
A retailer who breaches a warranty, express or
implied, must be prepared to accept the return
of the product -- for money back. The two
examples described here to illustrate the point
are loosely based on a variety of consumer
complaints recently received by the JVC.

One of the advantages of being an AGS

titleholder is that you know diamonds! You've

been through the diamond grading education

that explains how diamonds are evaluated. Your

experience works with that education so that

you understand the value of diamonds. Together,

you are able to make an educated, ethical and

romantic presentation to your customer.

Back in the day, we didn't have the diamond reports from GIA or AGS or EGL to tell us what

the diamond grades were. We took the parcels of diamonds from our supplier, purchased the

ones we thought were the best of the lot, and then placed our grade on them. We used our

Master Diamonds for color, our microscope for clarity and our scale for carat weight. We also

evaluated the cut according to the AGS Diamond Grading Standards.

We stood behind our diamonds and our grades. And, after all, who was going to question us?

Our title of Registered Jeweler or Certified Gemologist was impressive to our customers and

it made it difficult for another jeweler (without credentials) to disagree with or question our

grading. We used our American Gem Society credentials to establish credibility and earn the

trust of our customers.

Today, unfortunately, any jeweler can sell a diamond with a lab report. They don't need

to know about diamonds and they don't need a title--or do they? What is the seller's

responsibility when it comes to representing a diamond's grade on a report? What is a

warranty?

The following article explains:

Diane Flora, CGA

Director of Education

Case Facts

In the first case,

a consumer bought an engagement ring. When the stone

appeared to be loose, the consumer brought it back to the jeweler, who readily
agreed to adjust it, free of charge. The problem seemed solved until, shortly after
the repair, a prong broke. The jeweler again agreed to repair the ring without
charging a fee. This repair was also unsuccessful, and, sometime later, the diamond
fell out. Fortunately, the consumer found it immediately. He brought the setting
and stone back to the jeweler and asked for his money back. The jeweler refused,
stating that the thirty days allowed by the store for returns had already elapsed.
The consumer then contacted the JVC.

In the second case,

a consumer bought a diamond ring as an anniversary present

for his wife, after consulting at some length with a jeweler. The jeweler stated on
the store receipt, and on a store-prepared "Statement of Value," that the color grade
of the diamond was "G" and the clarity was "VS-1." The jeweler also gave the
consumer a laboratory-prepared grading report that similarly indicated grades of
"G" and "VS-1." Months later, hit by the bad economy, the consumer and his wife
decided to sell the ring. As a first step, they had the stone appraised by a different
lab, one with a national reputation for accuracy. That lab returned the ring with
grades of "K" and "SI-1." The consumer immediately went back to the jeweler
and asked for his money back.

The jeweler refused to accept the return, relying on the store return policy, and
stating that it was the customer's choice to rely on the first lab's grading report when
he purchased the ring. The jeweler further took the position that, if the consumer
was unhappy, the consumer's recourse was with the first lab, not with the jeweler.
The consumer, questioning the jeweler's effort to distance himself from the very
lab report he had used in selling the ring, contacted the JVC.