Canniest – though maybe costliest – marketing decision of the day is GCAL’s (the Gem Certification Assurance Lab) plan to offer “zero tolerance certs.” Some scoffed when GCAL offered certs that were guaranteed to be within a grade, because, as my colleague Gary Roskin notes, you’d have to be a blind person or deceitful to be more than a grade off.
But now they are guaranteeing that they will get the grade right on the nose – or they will “reimburse the difference in retail market value between a diamond with the original weight and quality and the newly established weight or quality.” In its press release, GCAL president Don Palmieri notes that its parent company Collectors Universe has similar policies for four of its other divisions and last year paid out over $300,000 in guarantees – a not insubstantial sum.
Anyway, as Gary also notes, this deal is only offered to consumers – not the trade. Since the trade regularly resubmits stones, that could be a quick shortcut to bankruptcy. And since GIA doesn’t fancy itself a consumer name, one presumes they won’t feel pressured to match it.
Collector’s Universe has been an aggressive company since they burst on the diamond grading scene, and that has not always played well with some people. The jewelry division is currently losing money, which isn’t surprising considering all the resources they have sunk into it, but on a recent conference call, the company said it hopes for it to break even by the end of fiscal 2007. We’ll see what this latest initiative leads to. It is certainly an extremely bold, and nervy, move they are making, and we’ll keep an eye on it…