PAID ADVERTISEMENT
Howto Spot
Deceptive Trade Practices
When Shopping
For Fine Jewelry
By John Tavlin
President
Nebraska Diamond Sales Company, Inc.
Last Thursday we published an article entitled
"How to Buy Diamonds With Confidence and
Knowledge." The purpose of that article was to
provide basic factual information to assist con
sumers in buying diamonds intelligently. We are
continuing that effort today by discussing various
trade practices of which consumers should be
aware which are common in the jewelry industry
but which we feel are deceptive, unfair and, in
many cases, illegal.
The Categories of Deception
Deceptive trade practices in the jewelry in
dustry tend to fall generally into two broad
categories:
1. Practices which lead theconsumertobelieve
that he is receiving a bargain purchase when,
in fact, he is not (fake "sales"), and
2 Practices which lead theconsumertobelieve
the quality, quantity or description of the
article being purchased is more or better than
that which is actually delivered (active or
constructive misrepresentation of the product
either by act or omission).
The Law
The laws of the State of Nebraska address both
of the above categories of deception. The
Nebraska Consumer Protection Act specifically
states that "Deceptive acts or practices in the
conduct of any trade or commerce shall be
unlawful.” The concept of "Deceptive Trade
Practices” is then discussed in depth in the
Nebraska Uniform Deceptive Trade Practices
Act, which states
"A person engages in a deceptive trade practice
when, in the course of his business, vocation, or
occupation he:
Makes false or misleading statements of fact
concerning the reasons for, existence of, or
amounts of price reductions;
Represents that goods or services are of a
particular standard, quality, or grade, or that
goods are of a particular style or model, if
they are of another,"
Fake “Sales”
The concept of the fake 'sale" is an old one.
Basically, it plays on the desire of the consumer
to obtain a bargain purchase Here is how the
scheme works: The jeweler places an exhorbitant
and fictitious "regular price" or "appraised value"
or "reference price" on an article of jewelry He
then advertises "special sale prices or "drastic
reductions" or "storewide 50% off clearance
sale or something similar, and offers the article
to the consumer for less than this fictitious
"marked" price The consumer buys the article
thinking he has saved a bundle In actuality,
though, under the scl> me, the jeweler has sold
the at tide for the price he always intended to sell
it for It was never really marked down at all. In
othei words, the savmgsdoesnotexistexcept in
the mind of the uneducated consumer As stated
above, there are laws which technically make
this practice illegal Nonetheless, the practice
flourishes to the extent that, in our opinion, the
fake "sale" is the predominant tool used in
advertised "price reduction" promotions in the
jewelry industry today Why would a jeweler risk
criminal and civil prosecution to run such a fake
"sale"? We are going to tell you: '
1 The first and foremost reason is because the
fake "sale technique works. This sad but true
fact can be cured only by increased consumer
awareness and education Psychological
studies reveal that many consumers tend to
place greater emphasis on how much they
think they "save than on how much they
actually spend on a given purchase, so
fictitious "savings tends to take on more
significance than the reality of the bottom
line These consumers are the bread and
butter of jewelers whooperate under the fake
"sale" format
2 The second reason is because jewelers do
not think they realistically risk such prosecu
tion State Attorney General and County
Prosecutor offices are over-burdened with
case loads, and prosecution for lake "sale"
violations has traditionally received a low
priority, making the practice a calculated risk
in favor of the jeweler. Recently, however, this
subject has received wide press coveiage in
the jewelry industry trade journals, and some
East and West coast jurisdictions have stepped
up enforcement Meanwhile, though, in other
areas of the country, the fako "sale" scheme
continues to cost uneducated consumers
millions of dollars
We suggest that when you oncounter jewelry
"sales" employing any of the above described
characteristics or if you notice a jeweler running
a seemingly perpetual "sale" on the same item
time after time, you proceed with caution and
skepticism. Ask to see some definitive proof that
the ‘‘before' prices are authentic prior actual
selling prices of the identical product. Such
proof can seldom be provided. The fake "sale''
scheme has grown to epidemic proportions in
the jewelry industry. Only through consumer
awareness can the problem be eliminated. Ask
questions and avoid being the next victim of this
deceptive scheme.
How Nebraska Diamond
Guarantees You
The Lowest Prices
At Nebraska Diamond our customers find that
our regulareveryday pricesare substantially less
than the most drastic "sale” prices offered by our
competitors. We unequivocally guarantee you the
lowest price before and after the sale. If you find
a lower price on identical merchandise we will
beat it. Period Our track record speaksfor itself:
In a January, 1986, consumer survey, Nebraska
Diamond was voted as having the lowest prices,
best selection, best service and best guarantee
Even this, though, was not enough for us. In
1987, we introduced our exclusive Wedding
Savings Package ™ Given free with each dia
mond engagement ring, the Wedding Savings
Package™can be worth hundredsand hundreds
of dollars in preferential discounts on your
wedding gown, flowers, photography, tuxedos,
invitations and more ... even your wedding cake
and reception. Today, more than ever, Nebraska
Diamond gives Lincoln its best value in fine
jewelry.
Deceptive Merchandising
And Display Techniques
Suppose your local Ford dealer put a Ford on
his showroom floor, but somehow figured out a
way to shine a light on it, or polish it up, or
otherwise do something that would make you,
the consumer, think it was a Rolls Royce. Sup
pose you purchased the car on that basis, only to
discover the truth after you drove it away Does
this sound far fetched? Conceptually, it happens
every day in the jewelry business We are going
to tell you how
Deceptive merchandising and display tech
niques in the jewelry business fall into four
distinct categories:
1 Deceptive lighting conditions
2. The heavy make
3 Color enhancement techniques
4 Clarity enhancement techniques
DECEPTIVE LIGHTING CONDITIONS
At Nebraska Diamond we adhere to the
philosophy that When you sell quality jewelry
you don't need deceptive lighting conditions
We sell quality jewelry. We don't need deceptive
lighting conditions and we don't allow such
conditions in our store. We define deceptive
lighting conditions as "any lighting condition
that tends toenhance the true appearanceof any
gemstone or article of jewelry As a practical
matter, the only lighting conditions which are
non-deceptive, that is, which present the true
appearance of gemstonesand articlesof jewelry,
are natural daylight and flourescent lighting
which simulates natural daylight Natural day
light and flourescent lighting which simulates
natural daylight are used for laboratory grading
of diamonds, and this is the condition you wiH
find at Nebraska Diamond Nebraska Diamond is
not typical in this respect Most jewelry store
sales floors are characterized by chandeliers,
hot spot lights, flood lamps, tubular display case
bulbs and other incandescent type light sources.
Where flourescent tubes are used they are usually
mixed with the incandescent sources We con
sider such lighting conditions to be deceptive
The effect of deceptive lighting conditions is to
artifically enhance the brilliance and dispersion
(fire) in gemstones, and this is particularly effec
tive with diamonds. We feel that this practice is
patently unfair to the consumer because it makes
it virtually impossible to accurately judge color
and clarity, the two most important factors in
diamond valuation Under these lights diamond
color cannot be accurately identified or differ
entiated in spite of the fact that the difference in
value from one coloi to the next can be drastic,
and imperfections which would otherwise be
visable to the naked eye and which, as a result,
reduce value substantially, are lost in the arti
ficially created dazzle The purpose of these
lamps is obvious from the advertisements used
to market them to jewelers. One lamp promises
that it "enhances the brilliance of diamonds,"
another that it "adds fire and brilliance to every
piece you show," and a third "eliminates yellow
cast " While others may argue that the use of
these lamps is merely a merchandising and
display technique, we prefer to think that con
sumers are entitled to see exactly what they are
getting Accordingly, we do not use such decep
tive lights for the sale of gemstones and jewelry
at Nebraska Diamond
THE HEAVY MAKE
The term "heavy make" refers to a diamond
that has a disproportionate share of its total carat
weight concentrated in the depth of the stone.
Visually, this means that a "heavy make" diamond
actually weighing 1 carat may only face up with
the appearance and diameter of a 3/4 carat
diamond cut to proper proportions. Because
they face up so much smaller than they should,
"heavy makes" are worth substantially less than
properly proportioned diamonds. Because the
"heavy make” is worth less, it costs the jeweler
less, so he can sell it for less. When the jeweler
fails to tell his customer that he is showing a
“heavy make" and fails to explain that the "heavy
make” is priced lower because it is worth less,
the effect is to trick the consumer into thinking
that he has purchased a full size diamond at a
bargain price In fact, the problem of the "heavy
make" is virtually never explained to the con
sumer, so the consumer simply assumes that any
diamond shown of a certain carat weight faces
up the size that it should, and he purchases the
"heavy make" unknowingly. We feel that this
failure to inform the consumer constitutes decep
tion by omission. The "heavy make" is no bargain.
The consumer in our example would be better off
buying the properly cut 3/4 carat diamond be
cause it would cost less, be more brilliant, be
more dispersive, and appear just as big as the 1
carat "heavy make."
COLOR ENHANCEMENT TECHNIQUES
The term "color enhancement" refers to mer
chandising and display techniques which create,
through a variation of display environment, the
illusion that the color of a particular diamond is
better than it really is. Suppose, for example, that
a jeweler has a diamond with a noticeable yel
lowish cast. The consumer perception of that
yellowish cast can be minimized if the diamond
is shown to the consumer under the typical
jewelry store incandescent lighting system de
scribed above, because that lighting system
tends to create its own yellowish cast in the
viewing environment. The effect is to alter a
white background, against which a yellowish
diamond will clearly stand out, to a yellowish
background, against which a yellowish diamond
blends in, with the result that the yellowish
diamond begins to take on a more colorless look
Another technique is to allow sunlight to flood
the showroom Direct sunlight will have the
visual effect of washing the yellow out of the
diamond and will create the illusion of a more
colorless appearance A third technique is to
display the yellowish diamond against a gray
color background The color gray tends to
neutralize the color yellow and creates the
impression of a more colorless diamond We feel
that all of the above techniques, and any other
techniques with similar results, are deceptive At
Nebraska Diamond we use white backgrounds
and laboratory lighting conditions that render
diamond colorations with exceptional accuracy
so that even the untrained consumer can observe
them with ease.
CLARITY ENHANCEMENT TECHNIQUES
The term “clarity enhancement" refers to
merchandising and display techniques which
create, through a variation of display environ
ment, the illusion that the clarity of a particular
diamond is better than it really is. Typical jewelry
store incandescent lighting systems artificially
enhance both the brillianceand dispersive effects
of diamonds, creating a dazzling "fireball" effect
that tends to blind the viewer to the presence of
imperfections which otherwise would be easily
noticed with the naked eye Additionally, these
lighting systems create a "dimming" effect which
tends to darken the overall appearance of the
diamond, making it more difficult to see into the
stone. Sometimes microscopes are used to hide
imperfections. The microscope technique capital
izes on the fact that imperfections in diamonds
typically exist in only very narrow planes in the
diamond structure The microscope is a very
sensitive piece of equipment that can be focused
to one of many planes in a diamond. If the jeweler
sets the diamond in the microscope and adjusts
the focus for the consumer, the jeweler often has
the option to focus the microscope in a "clean"
plane, with the result that the imperfections can
be so far out of focus that they completely
disappear off the field of vision. Unless the
consumer understands how the microscope
works and makes the focus adjustments himself
he cannot verify the true nature of the clarity
Additionally, psychological techniques are often
brought to bear on the consumer In particular,
diamondsare sometimes described toconsumers
as "near flawless". The term "near flawless" does
not exist in the Gemological Institute of America
(GIA) diamond grading terminology, and the use
of that term is meaningless and deceptive At
Nebraska Diamond we adhere strictly to GIA
diamond grading terminology, all customers are
given thorough instruction and assistance in dia
mond clarity examination, and we identify and
specifically point out all imperfections, if any
A Final Word
At Nebraska Diamond we believe that earning
your trust is the most important thing we do and
that trust is earned with quality, value, service
and honesty Our reputation for having the
lowest prices, best selection, best service and
best guarantee is unprecedented At Nebraska
Diamond our uncompromising commitment to
our customers has made us the dominant force
in Lincoln's fine jewelry market We look forward
to serving you
Copyright 1987 Nebraska Diamond
Sales Company. Ini
All Rights Reserved
NEBRASKA
DIAMOND
865 NBC Center 13th & O
474-6400
Member Firm GEMGROUP
PAID ADVERTISEMENT_ J