Win Some, Lose Some

After a Guinness Book of Records-type gestation, the Federal Trade Commission finally has issued its revised Guides for the Jewelry Industry. The request for an updating, with many suggestions for change, was filed with the FTC by the Jewelers Vigilance Committee in April 1986.

The final rulings out of Washington are a mix of good news-bad news. The basic point is that the FTC, after years of deliberation and consultation with the industry (it received 263 direct comments after it asked for reaction to the original JVC proposals), says flatly that the Guides are needed and that their value to the industry far outweighs any compliance costs. We couldn’t agree more. The Guides are nothing less than the ethical underpinning for every business practice and sales transaction that involves a jewelry product.

The FTC recognizes the total applicability of the Guides when it says that “retailers, as well as consumers, are meant to be protected from deceptive practices addressed by the Guides. Therefore, the revised Guides state that they apply to persons, partnerships or corporations at every level of the trade.”

The revisions contain some surprises. Under the new Guides, for example, there is no need to disclose treatment of a gemstone (and the FTC explicitly says it favors the word “treatment” over “enhancement”) if the treatment is permanent and doesn’t call for any special care requirements. But the FTC supports disclosure of non-permanent treatments that require special care — and includes among them “application of colored or colorless oil or epoxy-like resins, surface diffusion or dyeing.” That’s going to be a tough one to swallow for anyone dealing in emeralds.

The section on synthetics also is likely to create some stir. The FTC brushed aside a plea by the American Gem Trade Association to call any man-made gemstone “synthetic” and accepted the idea that the word “is misunderstood by some consumers to mean fake or artificial.” Thus while the agency said a seller may continue to call such a stone synthetic, the revised Guides also sanction use of such terms as “laboratory-grown,” “laboratory-created” or “[manufacturer name]-created.” This last term appears to open the door to a whole new breed of company-name synthetics.

The revised Guides specifically reject use of the term “cultured” for a synthetic gemstone.

Diamond industry officials seem to have done a very good lobbying job with the Feds. They won their battle to have lasering judged to be part of the normal cutting process and, as a result, the revised Guides say it need not be disclosed. In support of its stand, the FTC says that “a grading report would indicate that the diamond had been laser-cleaned and, if the buyer chose to examine the diamond under standard ten-power magnification, the laser tunnels would be obvious…”

Maybe that is true for a professional buyer, but it seems disingenuous if we’re talking about the average consumer — the person the FTC allegedly seeks to protect. JVC recommended disclosure of lasering; we agree with its stand.

The industry and the FTC agree that fracture filling of a diamond should be disclosed. The revised Guides say so.

Diamond people also won one on weight. JVC argued persuasively that when a piece of jewelry containing two or more diamonds is sold, the seller should disclose the minimum total weight of the diamonds. The recommendation made very good sense; too often total-weight goods prove to be under-weight when checked.

The diamond community — and some major retailers — rejected such an approach as too cumbersome and costly. Instead, it wanted to enshrine in the revised Guides a “trade practice” of measuring total-weight goods in “ranges.” Thus a half-carat total-weight piece might actually be anywhere between .047 ct. and 0.55 ct. Amazingly, the FTC bought this argument. The revised guides say it’s OK to market diamond goods with a fractional sales pitch (a fifth, a half, etc.) provided the weight range used also is revealed.

There’s much more to comment on and we’ll give a full report in the August issue. But the single most important point is that the revised Guides have finally been issued. This revision could not have happened without the incredible dedication and hard work of Vermont jeweler Bill Preston in his role as JVC’s point man in the Guides project. In his career Bill won many industry honors but none approaches this crowning achievement. The industry is and always will be in his debt. And so will the millions of consumers who’ll benefit from Bill’s efforts when they buy a piece of jewelry.