When you go on a trip, you always seem to see lots of jewelry stores at your vacation destinations, especially in the Caribbean. Why is that? Think about it. There are multitudes of new potential customers every day. Because they are on vacation, they are relaxed and have their guard down. And vacationers are looking to buy a memento of their trip.
In addition, since the travelers are on vacation, they have a limited time frame in which to make a purchase decision. They do not have time to do any research or comparison shop. And the store will most likely never see any of these customers ever again. So when you are vacationing, you are the perfect mark, uh customer, for these jewelry stores.
No matter what vacation destination you are in, these jewelry stores always have these great deals that appear too good to pass up. The shop was on the cruise line’s preferred retailer list. The jewelry store wouldn’t cheat you, would they? Unfortunately, according to a recent investigative report by NBC News, cheating you is exactly what these stores are doing.
The Rossen Reports investigative team went shopping at three jewelry stores at two popular Caribbean vacation destinations. After their purchases, they had the jewelry inspected by two independent gemologists.
At the first shop, the Rossen team purchased a sapphire ring they were told by the shopkeeper was worth $750, for the bargain price of $350. The independent gemologists found that it was not real sapphire at all, just blue glass and that the ring was maybe worth $25 at the most. They overpaid by $325.
At the second shop, they got a deal at $3,200 on a pair of diamond stud earrings they were told retailed for $4,400. The independent gemologists found the diamonds were a lower grade of color and clarity than the shop represented and valued the earrings at $2,400. The Rossen team overpaid by $800.
At the third shop, the Rossen team purchased another pair of diamond stud earrings,that the shopkeeper said was a great deal at $1,900. The independent gemologists found that the diamonds were clarity enhanced and that the earrings were only worth $850. They overpaid by $1,050.
Not only did the Rossen team overpay by $2,175 for these three purchases, they had to pay almost $300 in taxes on the jewelry when they came through US customs. These do not appear to be isolated incidents. I regularly hear reports from local jewelry appraisers that values of vacation jewelry purchases are less than the customer actually paid.
Although the Rossen team did not purchase diamonds with certifications, you also have to be cautious with certifications. There are certifications and there are certifications. The benchmarks for diamond certifications worldwide are from the labs of the Gemological Institute of America (GIA) and the American Gem Society (AGS). GIA and AGS are trusted and known for their ethical standards and consistency in their grading system.
If you are buying jewelry on vacation with a certification, the certification is not likely to be by from GIA or AGS. It will likely be from the European Gemological Laboratory (EGL), International Gemological Institute (IGI) or HRD Antwerp World Diamond Center (HRD).
According to diamond experts Ira Weissman and Michael Fried of The Diamond Pro, EGL, IGI and HRD certifications are much looser than GIA or AGS certifications and inconsistent in the grading. Weissman and Fried assert that EGL will give 2.5 “upgrades” to diamonds, either from color or clarity or both. Similarly with and IGI certifications, they claim are consistently looser in color and partially looser in clarity than GIA or AGS. The Diamond Pro states that HRD certifications are typically two color grades lower than GIA or AGS.
Weissman and Fried do not recommend that you purchase any stones with EGL, IGI or HRD certifications for two main reasons. Firstly, because of these inconsistencies in grading and the “looser” standards, you are given no true assurances to what you are getting. Secondly, EGL, IGI and HRD diamonds are not priced the same as a GIA or AGS diamond of two or two and one-half grades lower, they are priced higher. This results in huge profits for the shopkeepers selling EGL, IGI and HRD certified diamonds.
To entice you to purchase from them, vacation destination jewelry shops will often offer store credit with what appear to be generous terms. Be wary of this. I reviewed one case in which the vacation store credit agreement prohibited returns of merchandise for refunds, only store credit. and all disputes had to be handled in the courts of the city and country where the jeweler was located.
Also what you may not know 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. It is also reported that land excursion guides are given commissions on sales from cruisers they bring to the shopkeepers.
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 August 2, 2015 in The Times Herald newspaper, Port Huron, Michigan as: Buyers should beware when purchasing vacation jewelry