The Rapaport conference on certification in Vegas was definitely a worthwhile — if at times heated — discussion.
First of all, it featured a topic that hasn’t already been talked to death. Secondly, it brought to the table a topic that impacts millions of consumers, and puts honest retailers at a severe disadvantage. During the conference, one retailer asked how she should respond when a customer comes in with a report from a not-well-regarded lab. She doesn’t like to bash the competition, and it isn’t easy to explain to consumers that not all labs are created equal.
We all agree there are good labs, and, to put it charitably, not-so-good labs. For some labs out there, “generous” grading has become a business model. So how does one separate the good from the bad?
It’s not easy but these ideas were batted around:
– Some kind of independent auditing firm for labs. In other words, third party certification for the third party certifiers. Apparently, these kind of services exist, and I hope to bring you more about them in the near future. The trade needs to develop some kind of uniform standard for the grading labs, and then have them regularly tested for it. Some people have suggested the ISO may be answer, though, from my understanding, ISO certification, particularly at the lowest levels, doesn’t guarantee the accuracy or integrity of a lab’s grading.
– Some kind of lab index, which is what Peter Yantzer of AGS advocated a while back on this blog here. The idea is that the people in the market know the good labs from the bad, and often vote for the “good” labs with their dollars. Rapaport actually calculated and showed one based on his Rapnet listings, and Polished Prices regularly publishes one. (UPDATE: You can see the Rapaport listing, and more info on this conference, here.)
Apparently, in the coin industry such a listing exists, and it’s regularly featured in a coin industry trade publication. The problem is, while it’s understandable for hardcore coin collectors to look at industry trades, not many diamond consumers are likely to do so.
– Finally, along the lines of the above comment, the diamond business should examine how other industries also dependent on certification (like coins and stamps) handle different labs with different standards.
If we can find a way to settle this, we would have a far more ethical industry. This is a very interesting and important topic and we’ll be watching it …