How To Avoid Gemstone and Jewelry Scams

How gemstone and jewelry scammers try to fool you and what you can do to stop them: Internet Scambusters #289

It’s easy to fall for gemstones and jewelry scams — sometimes they even fool the experts. But using common sense and a few simple techniques can certainly help.

This week, we highlight some of the most common jewelry scams to watch out for, where to look for more help, plus 7 easy steps to avoid them, or at least minimize the risk.

We also suggest you check out the most popular articles from our other sites during the past week:

What It Takes To Get That Perfect Credit Score: Achieving a perfect credit score is possible when you know these insider secrets.

3 Recipe Websites You Can’t Live Without: Even seasoned cooks will love these recipe websites designed to make life easier in the kitchen.

Let’s begin…

How To Avoid Gemstone and Jewelry Scams

Tourists, online bargain hunters and even professional jewelers share a common misfortune — they’ve all fallen victim to gemstone and jewelry scams.

You might wonder: if even some experts can be fooled into thinking a fake gem is the real thing, what chance is there for the rest of us?

We’re not just talking about passing off a glittering piece of cubic zirconium (CZ) as a thousand dollar diamond, though that happens often enough.

No, the con merchants go way beyond that.

They make “sandwiches” with two cheap stones and a colored glue for the filling. They stick pieces of foil onto the back of stones, which are then embedded into jewelry that sparkles. Or they just manufacture substitutes for items like amber out of good ol’ plastic or diamonds from glass!

Then they churn out phony appraisal certificates and authentication forms that are as genuine-looking as their fake stones and jewels.

Of course, at one level, there’s nothing wrong with fake jewelry. Celebrities use it, royals use it, maybe even your grandma uses it — as a substitute for the real thing that’s often locked away in a safety deposit box.

And of course, costume jewelry (when it’s declared upfront to be fake), can make someone look like a million dollars for 100 bucks.

Trouble comes when you pay top dollar for a phony gem or piece of jewelry, or, even if it’s genuine, a poor quality stone.

Gemstone and jewelry scams are particularly rife in China and southeast Asia.

For tourists, Thailand especially has become a scammers’ paradise. Scammers accost travelers in the streets of Bangkok, offering fake or poor quality sapphires, diamonds and rubies at bargain prices or even taking tourists to “jewelry factory” outlets where, supposedly, they can find a great bargain.

The same factories, and their counterparts in China, flood the Internet, especially online auctions, with their products, from precious stones to “Rolex” and other famous-name watches.

eBay and some of its traders actually have whole sections devoted to spotting these gemstone and jewelry scams.

Such scams have also turned up in Mexico and the Caribbean. But the truth is they’re everywhere. Earlier this year, roadside scammers in Germany flagged down drivers and tried to sell fake jewelry, supposedly to help pay for car repairs.

And in Murfreesboro, Arkansas, scammers operate at the only public access diamond mine, approaching stone hunters with supposed finds — which, because of the location, have substantially higher than normal values — which they offer to sell. The stones usually turn out to be fakes or extremely low quality from somewhere else.

As if all this wasn’t bad enough, unscrupulous jewelry stores join in the rip-off. In one favorite trick, they produce an inflated appraisal, then sell the item at a greatly, reduced, “bargain” price.

Even working on the right side of the law, they exaggerate values and then mark prices down for sales, or they misrepresent the quality of stones, using technical terms or “bumping” up the grade.

To our way of thinking, if the buyer is misled even without breaking the law, it still boils down to a scam.

To help, we’ve put together a list of 7 common sense steps anyone can take to avoid, or at least cut the risk, of falling for a jewelry scam.

1. Know Your Stuff.

The first and most important rule is to know your stuff. If you’re interested in buying from anyone other than a reputable, home-country dealer, make the time to study the market and the gems. Get to know the tricks.The Internet teems with sites offering information on every stone under the sun. For instance, you can find a list of the 20 most common diamond scams at Diamond Helpers.

2. The Too Good To Be True Rule.

Always apply the “too good to be true” rule. If someone offers you an item at a ridiculously low price, more than likely they’re setting you up for a jewelry scam. You can’t really buy a Rolex for $50 or a 1-carat diamond for $200 — unless it’s “hot” stolen property, and you don’t want that either!

3. Get Street-wise.

Never buy on impulse and never buy from someone who approaches you on the street whether you’re in Bangkok or Bangor, Maine. And certainly don’t accept such a person’s word, even if backed by an appraisal form, that the item is what they say it is, or that it’s worth what they say it’s worth.

4. Check Out the Appraisal.

If you do accept an appraisal form, check that it’s from a legitimate organization such as the Gemological Institute of America or the American Gemological Society, not something with a similar name.The jewelry insurance industry also produces its own appraisal forms, which have been hijacked by scammers. You can read more about it in their Jewelry Insurance Issues newsletter.

5. What’s a Bargain?

Don’t trust the word “bargain.” In Thailand, tourists often buy genuine jewelry at “bargain” prices, only to find they’ve paid double what it costs back home. If someone tells you it’s a bargain, make them prove it.

6. Use Simple Tests

Learn about and apply easy, on-location testing of precious and semi-precious stones and jewelry. For example:

  • If you breathe on a genuine diamond, it won’t fog up; pretty much anything else will, including cubic zirconium.
  • The second hand of a Rolex watch moves with a sweep, while on a fake it moves with a tick-jerk.
  • With amber, “trapped” insects that look too carefully placed are a dead — pardon the pun — giveaway that it’s plastic.

7. Location, location, location.

If you’re buying online, check where the seller is located. China, Taiwan, Thailand, even India? Be VERY careful.Finally, if you suspect you’ve been scammed, it’s better to know the truth. Have your jewelry professionally and independently appraised. If it has a brand name, send it to the manufacturer for confirmation.

It may be painful to learn a jewelry scam got you — but look on the bright side: at least you save when it comes to your insurance premium.

By following these 7 tips, you’ll be several steps ahead for protecting yourself from jewelry scams.

That’s all for today — we’ll see you next week.