How to Disclose Without Botching the Sale

The vocabulary we use to present gemstone jewelry to customers has undergone major changes in recent years. In the old days we could get by with characterizing a gemstone simply as beautiful, rare, an important gem to own, a magnificent specimen. Today, new terms have crept into the lexicon. Now, a thorough presentation turns on words such as treated, enhanced, healed, filled, drilled, oiled.

With the new terms comes an imperative to practice honest and ethical disclosure. That means first of all you must learn to identify treatments or enhancements. That’s getting harder every day. You must be careful to disclose treatments properly in written documentation, including sales receipts and appraisals. Just as important, you must learn how to disclose in the sales presentation without killing the sale.

If disclosure sends a shudder of anxiety down your back, you have company. Many fear that if they do disclose, they’ll lose sales to the retailer across town who doesn’t. In fact, few jewelers disclose enhancements, and rarely are jewelers brought to trial for neglecting to do so. Which raises the question, Why should I waste all that time on disclosure when it will only hurt my chances of making a sale?

Why bother? One question that often comes up among jewelers is, “Will I get sued for non-disclosure?” Unfortunately, in today’s society you can get sued for just about anything. But the chances of getting sued for non-disclosure of a gem treatment are small indeed. If you fail to tell a customer that his blue topaz was irradiated, the damage doesn’t warrant a suit. There has to be an economic incentive before a lawyer will take the case.

Still, there are compelling reasons to disclose even if you probably won’t face litigation. One is that the Federal Trade Commission mandates it in its Guides for the Jewelry Industry. Actually, FTC’s Guides are not technically law. However, courts will often refer to the Guides when making legal decisions. Since FTC says you must disclose enhancements, it seems prudent to do so.

The one treatment that has slipped by FTC is laser drilling of diamonds. Though the wording currently doesn’t require disclosure of this treatment, most organizations still require it, and the agency itself has said it plans to revise its requirement this year.

Besides legal concerns, you have an ethical obligation to disclose. If you were the customer, wouldn’t you want to know exactly what you’re buying? What’s more, if your customers learn about enhancements later, they may feel cheated. They may not sue, but they might shop elsewhere next time. And if a local newspaper thinks an angry customer’s complaint makes an interesting story, your store can be damaged far beyond the price of the gemstone you sold.

Disclosure as opportunity. One reason so many jewelers keep their lips sealed is the industry’s attitude toward gem enhancements. Rubies and sapphires have been heat-treated and emeralds oiled for as long as any of us has been alive. It’s become an accepted way of life. Gems such as tanzanite wouldn’t exist without heat, so why bring it up? Blue topaz was popular several years ago, but without irradiation, it would not have existed. The jewelry industry may be aware of these treatments and accept them, but how many consumers know these basic facts? Do they have a right to know? I think so.

Look at disclosure as your opportunity to be the first to offer important information to a customer. In a recent seminar for jewelers on disclosure, I discussed how Service Merchandise had started a program with counter signs giving customers information about gem enhancements. One retailer in the group felt that, while Service Merchandise should do this because as a discount chain it carried more commercial gems, her store was different because it sold only high-end gems. I reminded her that the high-end gems she sold were heated in the same ovens side-by-side with gems that end up in the showcases of Service Merchandise. Treaters don’t discriminate. They treat everything.

Disclosure is not as difficult as it seems. As an appraiser, I’m amazed at how many clients are told nothing, not even the basics. When I explain gem treatments or enhancements, customers are generally interested and accepting. Often they’ll say they respect the knowledge I’ve shared—and then I’ve got a customer for life. By showing customers that you’re knowledgeable on the subject, you can turn a negative into a positive. Soon customers will realize that it’s worth shopping at your store because you tell the truth. The value of that trust is incalculable.

Choosing the right words. So in walks a customer shopping for tanzanite or topaz. How do you go about disclosing treatments? Here are ways not to do it: “These are nice tanzanites, but I must tell you they were an unpleasant brown when dug, and after heating they turned blue.” Or, “Before I show you the blue topaz, let me warn you—it’s irradiated. But trust me, it’s safe to wear.”

Instead, approach the customer with confidence. If he or she asks about enhancement, be ready with answers. According to Doug Hucker, executive director of the American Gem Trade Association, a sales associate has only about 10 seconds to win or lose the sale. Say the wrong thing in those first 10 seconds and the sale is gone. Hucker offers the following tips:

  • Be prepared. This is the most important advice. Many books, classes, trade journals, seminars, and brochures are available to the jeweler today. The only way to prepare sales associates is to practice with them, using the gems you have in your store. Use the benign-sounding term “enhancement” rather than “treatment.” Remember that customers are motivated to buy because the gem is beautiful. And they’re motivated to purchase from you because you’re prepared to answer questions. Brochures for consumers are available from AGTA, and more information can be obtained from the association’s Web site, www.agta.org.

  • Emphasize beauty. Hucker advises that when a customer asks, for example, “What is a tanzanite?” you should respond that it’s a beautiful blue gemstone rather than state technical information on where and how it was mined and how it was heated. Emphasizing the beauty of the gem is a good way to begin any explanation.

When asked if it’s treated, respond with, “Yes, most gems are routinely enhanced to improve their appearance. Most enhancements have been around for a very long time, some for hundreds of years or longer. The result is an improvement on nature’s beauty. It makes gems available and affordable.”

  • Don’t disclose right away. Disclosure has its place, but it’s not at the beginning of the sale. The key to disclosure is simple. If enhancements have not yet been discussed as a sale is being closed, offer the customer literature of your own or AGTA brochures. The reality is that most consumers are less interested in what was done to the gem than in how much it costs. That’s why disclosure is often best handled toward the end of a sale rather than in the beginning. Remember that 10-second rule.

Since many enhancements are stable, offer that information, too. If special care is required, this is a good time to inform the customer.

The final details. Occasionally, the treatment issue will be the main focus of the sale. For example, when the item in question is an untreated, rare gemstone, the discussion of treatment will be critical. Gems of a particular origin may also require an in-depth discussion of treatments. For some of these sales, additional lab papers may even be required.

Jewelers do have a potential difficulty with gem treatments. Often, they simply don’t know what’s been done to a gemstone. Try to get this information from suppliers. If it’s not available, assume the gem has undergone some sort of enhancement process. (AGTA’s annual Source Directory has a valuable “Gemstone Enhancement Information Chart.”) A generic statement about enhancement is a start. Although I favor more detailed information, I’m not opposed to a statement such as this: “Unless otherwise stated, all colored stones are assumed to be subjected to a stable and possibly undetected color-enhancement process.”

One last word of advice. As much as you may hate the extra paperwork, put it in writing. The receipt or appraisal document that you give the customer after the sale should have the enhancement listed, if known. Spell it out. Codes are confusing to a consumer. If they find out about an enhancement after the sale, they’ll think you cheated them. This is only for your protection. The issue may never arise, but your conversation is quickly forgotten in a legal case. And even in the absence of a legal squabble, you may have lost that customer for good.

Richard B. Drucker is the president of Gemworld International and publisher of The Guide, a pricing periodical he began in 1982. An international gemstone consultant, he has published numerous books on the jewelry industry.