Enhancements and Disclosure: What Your Customers Should Know

Your best customers, Mr. and Mrs. Stone, come into your store, hoping to purchase emerald earrings to go with the five-carat emerald you sold them four years ago. The Federal Trade Commission (FTC) tells us that consumers have the right to know about gem enhancement – and the list of enhancements that need to be disclosed is long. Imagine yourself saying something like this:

“Before I show you any gems, let me explain something to you. Emeralds are always oiled to make them look better. Well, actually, now they use Opticon. Opticon? Oh, nothing to concern yourself with, it’s just some resin with epoxy – you know, like a glue to hold it in better. It makes the emeralds look better than they really are. Yeah, it affects the price, but only by about 30%. The one I sold you four years ago? Well, oil, I think, maybe some Opticon – we really weren’t too sure back then.

“Tanzanite earrings instead? Ah, excellent choice. Oh, by the way, these stones were actually an ugly brown color when they were mined. Then they were heated up to get this pretty purplish blue. The ruby earrings? A small amount of glass filling from the heat treatment, but trust me, you can’t see it without a microscope. Those orange sapphire earrings in the case? Nice, aren’t they? Don’t even worry about the irradiation levels; the Nuclear Regulatory Commission makes sure they’re safe to wear.

“Mr. and Mrs. Stone, wait…Where are you going? What do you mean, you won’t be back? I’m just being honest. It’s called disclosure, and we’re all forced to comply.”

This scenario may be funny, but the topic is serious. Today most gems are enhanced to improve their appearance. It is not necessarily bad that these enhancements are being made, but they do affect the price and consumers have a right to know what has been done.

What is full disclosure? The Gemstone Enhancement Manual, edition 6.1, published in June 1997, outlines the requirements for American Gem Trade Association (AGTA) members to comply with the FTC guidelines. The manual states that “Failure to identify enhancement of natural gemstones, when present, is an unfair trade practice.” The FTC guidelines state that only unstable treatments or those that require special care have to be disclosed and that permanent treatments do not have to be disclosed. The list of treatments that are not permanent includes irradiation, heat, oil, epoxy resins and diffusion.

Ours is an industry of uncertainty. How can we accurately determine in our daily routines of selling and appraising what has been done to a gemstone? How can we provide proper disclosure if we aren’t sure ourselves what has been done?

The industry is still debating how to disclose. The Gemological Institute of America (GIA) believes in disclosure of all gem treatments; however, the institute is cautious in how it recommends disclosure. The laboratory report for an emerald will state “Evidence of clarity enhancement is present” whether it was enhanced with oil or Opticon. GIA may not be listing the type of enhancement because it is not possible to guarantee the nature of the treatment. Now that GIA has installed more sophisticated Raman spectroscopy equipment, gemologists can tell with greater accuracy what the treatment is, but GIA still is reluctant to list it.

Cap Beesley, president of American Gemological Laboratories (AGL) in New York, believes that full disclosure is the only way to go – the seller must disclose the treatment and the degree to which the gem has been treated. His reasoning is simple: If you had the option of purchasing an emerald that has been enhanced with a small amount of Opticon or one that has a lot of Opticon, which would you choose? Most would take the one with a small amount of Opticon, but some might prefer the heavily treated one because, all other things being equal, it should cost less. The consumer should have all the information to make an intelligent choice.

Some have argued that all gems should be sold with a guarantee from the supplier or a qualified laboratory report. This is becoming a normal way of doing business. Josh Hall, vice president of Pala International in Fallbrook, Calif., confirms that “there is definitely a greater demand for ‘papers’ with finer gemstones. Customers want verification of natural vs. synthetic, enhancements and location mined, when possible. In some instances, I have had to supply my own written guarantee. On very expensive stones, customers may request one or more reports from GIA, AGL or Gübelin in Switzerland, and they absolutely have a right to it. On the ‘bread and butter’ items, I find that papers are usually not required, and I suspect that it is because we are AGTA dealers. Our self-policing and disclosure policies give our organization the reputation for being upfront about disclosure.”

Here’s how to strengthen the reputation of your business.

Educate yourself. Trade publications are now focusing on gemstone enhancements. Take the time to read them. This article provides some signs to aid in identifying enhancements. GIA also teaches courses and many trade organizations hold seminars.

Indications of some treatments may be visible under magnification. Opticon, for example, may show a flash effect. You can see the flash when viewing the fracture with either dark-field illumination or fiber optic lighting (see photos 1 and 2). The flash colors may be yellow, pink or blue. They may be obvious or subtle. However, GIA warns that although this may be a strong indicator of Opticon, some oils can give a similar flash effect. Also remember that there are many combinations of resins and epoxies, so the flash will not tell you the exact composition of the filler. Opticon is a trademark of Hughes Associates in Wayzata, Minn. Technically, it is incorrect to use the term “Opticon” unless you know that the product is from Hughes.

The Arthur Groom Gematrat treatment (pronounced “Hematrat”) will also exhibit this flash effect (see photo 3). The company is adding a tracer to identify its filler, but the tracer is not visible with standard gemological microscopes. The company is working to bring down the magnification necessary to see the tracer.

Oils may show various characteristics under magnification. Sometimes palm oil may turn a milky white color over time or with repeated treatments. Some oils will look yellowish and “clumpy” (different from the yellow flash), especially with age as the oil tends to oxidize (see photo 4).

With rubies, the concern is over the possible presence of a glass-like melted borax in fissures that reach the surface. This is best seen in overhead reflected light. The glass-like substance will have a swirled appearance (see photo 5).

New (and old) enhancement methods are being tried every day, and gemstones once believed to be completely natural now may be enhanced. Tourmaline is an example. Green and red tourmaline were once considered relatively safe from enhancements. Now, some cabochons are being treated with a wax that penetrates and seals the surface of the stone. This is being done in Germany, where many fine cabochons are cut. Photo 6 was taken in diffused light. The dark concentrations are colored wax, not inclusions. In normal light, these dark spots are barely visible. Pala International’s Hall says that he sent a batch of tourmaline rough to Germany several years ago for cutting. The stones came back looking better than he expected. Upon further investigation, they proved to be wax treated. Now, when he sends rough there for cutting, he specifies that no treatments are to be done.

These photographs are only an introduction to the education process. Treatments today include Opticon, heat, oil, glass filling, wax, irradiation, diffusion, dye, bleaching, coating and combinations of these methods. It is difficult to become proficient in recognizing all of them.

Inform the customer. This is a tricky issue. You must find a way to (a) inform the customer of a treatment that may or may not have been done; (b) provide information without causing alarm; and (c) use language that will protect you legally. It’s not what you say, but how you say it.

Published information on disclosure usually begins by stating that the author is not a lawyer and is not providing legal advice. That is also true for what follows here; these are my opinions only. I prefer a “middle of the road” approach when it comes to disclosure. Although a GIA report provides information about the presence of a treatment, customers usually want more facts. Therefore, I have made two changes to my appraisal reports.

The first is inclusion of a one-page addendum that discusses gemstone treatments, their prevalence and issues that may affect care of the gem. A brief addendum cannot be all-encompassing, but can still be informative. An alternative is to distribute informational brochures that you have prepared yourself or those that are available from AGTA.

Second, in the body of the appraisal report I add a statement regarding the specific treatment used in the stone I am examining. For example, with an emerald, I would add: “Emeralds are often enhanced by the use of a variety of oils, Opticon or other resins and hardeners, both synthetic and natural. Although my testing shows evidence that clarity enhancement has been done in this emerald, the exact nature of the filler cannot be determined by standard gemological testing. Because I have observed certain characteristics, I believe the filler to be oil only [or whatever my observation is]. This treatment is a usual and customary practice and is acceptable when properly disclosed.”

The industry is debating what to do about treated rubies. When they are packed in borax for protection during heat treatment, the borax melts and becomes a form of glass that fills in the tiny surface fissures. GIA does not list this filler on a gemological laboratory report; it states only that a ruby shows evidence of heat treatment. Beesley and some others disagree with this tactic. They believe that the existence of the glass must be specifically disclosed and that the stone must be referred to as “fracture filled” or “glass filled.”

I would add: “Rubies are often enhanced by the use of heat to improve the color. A byproduct of the heat-treatment process is a glass-like substance that can fill in the tiny surface fissures. This generally does not add weight to the gem and is visible only microscopically but should be disclosed nonetheless. Because I have observed certain characteristics, I believe that the presence of this filler exists [or that this ruby has been heated without the presence of the glass filler]. This treatment is a usual and customary practice and is acceptable when properly disclosed.”

By using statements such as these, you allow for the possibility of undetected treatments while showing enough confidence to identify what you have observed. This is not foolproof protection, but it does address the possibility of misidentifying or failing to recognize a specific treatment.

You can use the same information on a sales document, rewording it slightly. (For example, “This ruby is sold under the assumption that it has been heat treated. It is possible that as a byproduct of the heat process, some glass-like residue exists in the stone….”) This statement can appear on the back of the invoice or as an attachment to the invoice. Be careful if it is an attachment, since the customer can claim at a later date that he or she never received it. Refer to it right on the invoice.

This seems like a lot of work – and it is. You will hear these warnings time and again, but most gemstones still are sold without disclosure, verbal or written. The question is not whether you can afford to take the time to develop a comprehensive disclosure policy, but whether you can afford not to. One legal battle, one adverse local news article or one disgruntled customer is too big a price to pay.

Foster integrity. Your job is to teach a customer about gemstone enhancements without losing that customer. You can do this only if you have the confidence to provide an explanation properly. The monolog at the opening of this article is not the proper way!

Once your customers see that you are knowledgeable about gemstones, they still have the option of visiting a competitor who does not disclose. At first they may think they are getting a gemstone that is not enhanced in any way, but as consumers become more educated, they will begin to ask more questions. When a store cannot answer these questions intelligently, it will begin to lose business.

Future implications. Perhaps the most important reason to disclose with integrity concerns the future care of the gem you just sold. Enhancements can affect the durability and stability of a gem. For example, the pressure in an airplane cabin can cause oil in an emerald to seep out. The emerald can be reoiled, but shouldn’t the customer learn this from you, the seller? Heat treatment of corundum is a stable process. However, the treated gem does become slightly more brittle, so it is common to see abraded facet junctions after jewelry has been worn for a short time.

Learning all of the proper care techniques is another major task, but it is necessary. If you inform your customer about treatment and care in a way that is not alarming, your honesty and integrity can go a long way toward securing that customer for life.

Richard B. Drucker is president of Gemworld International and publisher of The Guide, a pricing publication he began in 1982. It is used worldwide for prices of colored stones and diamonds. He is an international gemstone consultant and currently lectures and conducts seminars. He has published numerous books for the jewelry industry. His company can be reached at (888) GEMGUIDE or (847) 564-0555.

New enhancement methods are being tried every day; gemstones once believed to be enhancement-proof can now be treated.

The question is not whether you can afford to take the time to develop a comprehensive disclosure policy, but whether you can afford not to.