You and your spouse go on a cruise for your honeymoon or major anniversary. It is a wonderful trip through the Caribbean. At one of your ports-of-call, you have a few hours for a land excursion. You decide to go shopping, for jewelry.
And you know right where to go. The cruise line slipped a list of “preferred” retailers under your cabin door last night. They even will arrange land transportation for you.
You arrive at the jewelry store. It is incredible. You haven’t seen anything this fancy except in the movies. There are elaborate showcases and crystal chandeliers. They are even serving champagne. They treat you like royalty and show you all kinds of jewelry. Everything looks so gorgeous under their lighting.
They show you this beautiful diamond ring that usually sells for $17,000. However for you, if you buy today, it will only cost you $8,000. The ring even comes with a European Gemological Laboratory (“EGL”) certificate. You decide to buy the ring.
You pull out your credit card to pay, but are told that you don’t need to use a credit card because your credit is good at their store. You can use their store charge account. You sign the receipt, take your ring and go back to the ship. Or, maybe it needed some adjustment, after which they deliver it to you on the ship, just before you leave the port.
As Paul Harvey used to say, “And now, the rest of the story.” Once out of the lighting of the store, the diamond doesn’t sparkle anywhere near as much as some others you are now noticing and you can see all kinds of flecks and dark spots in the diamond. When you get home, you pack up the ring and send it back to the store. They refuse to accept the package and it comes back to you. You look at the receipt you signed and right above your signature it says that you read and agree to all the terms and conditions on the back of the receipt. No one at the store ever mentioned anything about the terms and conditions, let alone went over them with you.
You then look at the back of the receipt for the first time and you find out that you can’t just return the ring for a refund. You can only either exchange it at other locations of that store, which are only in the Caribbean islands, or return it for store credit.
They do have a limited money back guarantee. However, for the money back guarantee, the jewelry has to be appraised by an independent accredited gemologist/appraiser who does not buy or sell gems or jewelry and whose sole business is appraisals. For diamonds with a gemological certificate, they will only consider a grading report from the Gemological Institute of America, (“GIA”), EGL or International Gemological Institute (“IGI”). And that grading report can only be used as a basis of a return if the certificate has a variance of more than one color grade or a variance of more than one clarity grade than that which is specified on your receipt. And the piece of jewelry has to be returned in its original condition within thirty days of purchase.
You decide to take your ring to your trusted local jeweler who is a gemologist appraiser and certified annually by an organization such as the American Gem Society (“AGS”). What you first find out is that the diamond was certified by the EGL which is widely known in the jewelry industry as being looser with grading than the authorities in the United States, the Gemological Institute of America and the American Gem Society.
According to diamond expert Ira Weissman on www.truthaboutdiamonds.com, EGL and IGI certificates are very popular with U.S. chain stores and other jewelry stores because they are fast, cheap and generally upgrade their color and clarity one to two grades when compared to a GIA or AGS certificate of the same stone. So when you are comparing different certified stones, you have to also look at the lab who certified it. You are not always told by the chain store or other jeweler that EGL and IGI certificates are more generous than GIA or AGS certificates.
You find out from your trusted local jeweler, that your diamond’s EGL certificate has a clarity grade that is only one above the worst clarity grade that you can possibly get. So even if you did get another certification, it can’t go any lower than one clarity grade worse, because there are no worse clarity grades. The color is similarly low. You then find out that it will take more than thirty days to get the stone certified by the GIA, and they will only do a certificate if the stone is loose and not mounted. If the stone is removed from the ring and then re-mounted, the ring no longer is in its original condition. Your trusted local jeweler can’t do the appraisal because he or she sells gems and jewelry. You are in a Catch-22. The reality is that you can never return the ring for a cash refund.
You find out the ring is worth somewhere between $6,000 and $8,000. You didn’t get cheated, but you pretty much got what you paid for. This is not the deal you thought you had.
You contemplate not paying for the ring because you bought it on store credit. Then you do a little research and you find that this jewelry store has offices, not stores, in New York and Los Angeles. Why would these foreign jewelry stores need U.S. offices, unless they needed to chase after customers who did not pay. If you don’t pay, what are the likely consequences? Probably the same thing that happens when you don’t pay your Visa or Master Card bill.
The debt collectors may start calling you at home and work at all hours of the day or night and you can get negative reports that are sent to the credit reporting agencies so your credit rating will be adversely affected. In accordance with the contract that you signed, you have no legitimate reason to stop payment.
Also “the rest of the story” is that the “preferred” retailer lists which are provided by the cruise lines are nothing more than advertisements. It is reported that these preferred retailers pay the cruise lines thousands of dollars each month to be included on the list and be part of the land excursion shopping tours.
And this is not limited to cruise vacations. I know of one situation where a vacationer to Africa purchased tanzanite jewelry because she was in tanzanite mining country. After arriving home and consulting with her trusted local jeweler, she discovered that the tanzanite was only of average quality and there was no substantial savings.
So, what are your options? Firstly, don’t make major purchases when you are on vacation. You are most likely in a relaxed frame of mind with your guard down and more susceptible to impulse choices that you may regret later. You have absolutely no way to comparison shop or even know if you are getting a good deal or a bad deal. The best you can hope for is that you get what you pay for. The worst case is that you get cheated and you have absolutely no recourse when you are 3,000 or more miles away in a different country.
If you are going to shop for jewelry, research before you go and use your credit card. Most credit card companies will allow you to dispute the charges and return the item if you are not satisfied with your purchase. Check with your card company first before you purchase.
Your best option for buying jewelry is to shop local. Shop with your local jeweler whom you trust, with whom you can comparison shop and to whom you can go for after sales matters. You are not only increasing your likelihood of getting a good value, you are supporting your local economy.
By: Matthew M. Wallace, CPA, JD
Published edited February 12, 2012 in The Times Herald newspaper, Port Huron, Michigan as: EYE CANDY Don’t get blinded by all that sparkles