Retailers should be held accountable if they sell stones with inaccurate grading reports, panelists agreed at the Rapaport Corp.’s annual Certification Conference, held June 1 during the JCK Las Vegas show.

“There will always be labs that do whatever their customers want them to,” said Saville Stern, chief operating officer of RapNet, who moderated the session. “It’s up to [jewelers] to take the high road.”

Cecilia Gardner, president and CEO of the Jewelers Vigilance Committee, argued that, under the law, retailers are liable for representations in their stores, including those of grading reports.  

“What we have to rely on is the safest harbor, which is to comply with legal standards that require accurate descriptions,” she said. 

She added that while a diamond grade does not have a legal definition the way the karat weight of gold does, the industry standard is a one-grade variation.

“The law acknowledges that assessing color and clarity do require the human eye, and therefore subjectivity is built into the process,” she said. “Therefore, this is a matter of case law. Beyond a one-grade difference you get into an argument that [the grading difference] has been purposely done. When you get three or four grades, you get evidence of a clear intent to deceive.”

She noted that her group often hears from consumers who complain they have bought a diamond with an inaccurate grading report.

“Very often in the end they have paid the right price for the diamond,” she said. “They just thought that they were getting a huge bargain. There aren’t necessarily grounds for a lawsuit: They have lost the benefit of the bargain, but there is not tangible economic harm. But they walk away with a tremendously negative impression of the jewelry industry. Next time, they are buying handbags. We have lost a customer for life.”

She also said that reports should never be called certificates, even though that is common trade slang (and the conference was called a certification conference).

“They don’t meet the legal standard for certifications,” she said. “Does the public call them certs? Yes. Am I on a mission to change that? Yes.”

Rob Bates

JCK News Director