A Caribbean jeweler loses an important gemstone sale
after a local jeweler tells the client it’s a fake.

Jim Selden had been a salesperson at Maxwell & Company Fine Jewelers, a fourth-generation business located in an elite resort town in the Caribbean, for over 10 years. Like many reputable Caribbean stores, Maxwell & Company offered a large selection of merchandise at a wide variety of price points. The owners of Maxwell’s had struggled over the years with the negative shadow cast by so-called “tourist trap” jewelers in the islands. They had worked hard to maintain their distinct identity and an impeccable reputation for quality, service and value, as evidenced by the long list of five-star reviews posted by their clients.

ABOUT REAL DEAL

Real Deal is a fictional scenario designed to read like real-life business events. The businesses and people mentioned in this story should not be confused with actual jewelry businesses and people.

ABOUT THE AUTHOR

Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at This email address is being protected from spambots. You need JavaScript enabled to view it..

Last month, Jim sold a magnificent necklace featuring a fine, 4.50-carat Columbian emerald to Robert Levine, a visitor from a high-end cruise ship. Jim learned that Mr. Levine and his wife were frequent travelers, and that they had just recently moved from New York to their retirement home in Texas. Mr. and Mrs. Levine had never purchased from Maxwell & Company, but had heard about the store from New York friends some years ago. They had purchased other important jewelry pieces in the Caribbean from time to time and believed they had always gotten good value.

Jim knew that many vacation shoppers take Caribbean purchases to a jeweler back home for an appraisal and he expected nothing less from Mr. Levine. However, he didn’t consider that Mr. Levine might not be as familiar with local resources for reputable appraisals in his new home town as he was in New York. On the recommendation of a neighbor, Mr. Levine took the emerald necklace to Emerson’s, a local downtown jewelry store, for an appraisal. Michael Emerson, the store owner, stated that he’d been in the business for over 30 years and was a qualified appraiser. He offered to do the appraisal on the spot. After examining the necklace under magnification, he told Mr. Levine that while the 18K gold in the mounting and all the diamonds were genuine, the emerald was synthetic. He valued the piece at less than one-quarter of what Mr. Levine had paid.

Mr. Levine was very upset by the news and decided to return the necklace to Maxwell’s U.S. office, per the company’s “no questions asked” return policy. He included a copy of his appraisal from Emerson’s along with a very direct note to Jim expressing his deep disappointment with Maxwell’s and with his experience.

After crediting Mr. Levine’s American Express account, Jim, knowing that the emerald was genuine and certain that Maxwell’s would never misrepresent anything, let alone the nature of an important gemstone, decided to do a little research on Emerson’s. With a little digging and a few phone calls, he learned that Mike Emerson was not a gemologist and was not an appraiser recognized by any of the known professional organizations. When he called the store to talk with Mike about the appraisal and the emerald, Mike admitted that prior to the Levine’s visit, he had never actually evaluated an emerald over 2 carats. He held to his assessment though, certain that any emerald of that size and quality must be lab-grown, especially if it came from the islands. Otherwise, he said, Mr. Levine would have paid far more than he did for the necklace.

 
THE BIG QUESTIONS

Jim already has the necklace back in his hands and Mr. Levine made it clear he wanted nothing further to do with Maxwell’s. Should Jim make an attempt to salvage the sale? How should he deal with Mr. Levine? What is professional protocol with regard to dealing with other stores’ merchandise? What (if any) action should the owners of Maxwell & Company take regarding Emerson’s?

 

Expanded Retailer Responses

Stacey H.
Lincolnwood, IL

Jim should send the ring to a reputable gem lab, get a real appraisal and quickly forward it to Emerson. Offer Emerson a chance to phone Mr. Levine to confess his appalling error and apologize for having slandered Maxwell & Co. or face a lawsuit. Maxwell & Co. should then send the customer three dozen roses with a letter and a copy of the documentation, explaining that not everyone has the same discerning taste that Mr. Levine showed when he selected that beautiful piece, but that all returns are accepted no matter what, and that when Mr. Levine is back in the islands, to please stop by for a complimentary bottle of fine champagne and an apology that he was not presented with a report for the stone at the time of purchase. 

Laura S.
Indianapolis, IN 

After the fiasco of the Fred Ward emerald case decision in 1997, I would think Maxwell’s would have GIA (or another high-profile lab) paperwork for gemstones as well as diamonds. In the “sue happy” world of today, this is possibly a seller’s only protection. Maxwell’s could sue Michael Emerson for the lost sale and damages. An unqualified appraiser should be accountable for their opinions, especially their “incorrect” opinions. I see Levine as a lost cause either way. Unfortunate!

James D.
Kingston, NH

Since Maxwell’s already offers a GIA report for each diamond they sell, why not offer the same for important colored stones? Doing this would reassure clients that they are getting what they pay for.  Alas, I can understand Emerson’s bias as I have seen too many pieces from “the islands” that were not fully as represented. If a piece came in and I could not certify that a stone was genuine, I would return the piece and tell the client it was outside my area of expertise. The biggest problem is when the piece appraises well below the price paid.

Jim S.
Kauai, HI

A) Have a report from a proper gem lab.

B) A carefully crafted letter to Mr. Levine apologizing for his troubles ... with a copy of the lab report (no attempt to salvage the sale).

C) Another letter to the “appraiser” who harmed him. I’d want to sue for damages, but probably would not.

Bruce A.
Sherwood Park, Alberta

Jim should only respond with this letter:

Dear Mr. and Mrs. Levine,

As a long time sales associate of Maxwell & Company Fine Jewelers, I wanted to provide you with a follow up concerning the magnificent necklace that you purchased from us on your last visit to our island. We pride ourselves on the high quality of all our merchandise and through the years our "No Questions Asked" guarantee has served to reinforce that desire to visitors and discriminating international buyers such as you and your wife. 

This beautiful item is nestled back into its special place in our showcase as it remains a particularly fine example of natural beryl (emerald). We had GIA certify its origin and that certificate will accompany the neck piece should a future buyer also fall in love with this exquisite emerald necklace.

I can only hope you will consider visiting us again should you find yourself on a future island adventure leading to our door.

Thank you for your trust in Maxwell & Company,

Jim Selden

Theresia O.
Avon Lake, OH

It's not the sale that matters here, it's the reputation of Maxwell's that is critical. I would still write a letter to Mr. Levine thanking him for visiting Maxwell's and reaffirming the store's longevity and long-standing reputation and that they stand behind everything they sell. I'd also be inviting Mr. Levine to visit Maxwell's again as a legitimate luxury jewelry destination.

All that being said, it is interesting that people will buy so differently on vacation than they do in their own community. I'm not standing up for Caribbean jewelry sales necessarily, but it is just wrong what that jeweler in Texas did. Battling Caribbean jewelry sales is like battling online jewelry sales. People always seem to think they are going to get a better "deal" somewhere else.

Candice M.
Schaumburg, IL

Mr. Levine needed a gem report from a reputable lab in his possession when he took the emerald in for appraisal. Emerson's would have to prove it was fake rather than shoot off his mouth. Maxwell's policy that diamonds have grading reports is also important for high end colored gemstones, too.

All actions need to be positive. Jim can get the report that will verify natural. He can immediately let Mr. Levine know how he will prove the emerald is genuine. Jim gets a happy, new, long time customer. Emerson's will be a distant, bad memory.

When prospect came in and said the big chain store across the street threw me under the bus, I smiled, chuckled and told my new client that I felt honored that the big boy feared little ole me. When someone brings in something purchased on vacation, I acknowledge their wonderful memories. They love it, I usually say they got what they paid for and, they now have a good memory of their experience with me.

Charles S.
Cortland NY

Tough situation. Emerson had no business evaluating an emerald he knew little about. Maxwell could write a letter offering the names of qualified appraisers in Texas. This may not get Jim's business back but it would at worst solidify Maxwell's reputation.

Glyn J.
Victoria, TX

The "Appraiser" should make an statement in writing not only to the client but also to Maxwell,s stating he was in error when he made the appraisal on a stone that large. Sometime having to eat a slice of "Humble Pie" will not only make you feel better but show your future clients that you are not above making mistakes and you are only human.

Gordon L.
Santa Fe, NM

We would never sell a big gemstone, especially an emerald with out a certificate of some repute. Get one asap and send it to the customer with a note that he was missing a really good deal. Also tell the customer that he was taking the Texas jeweler to court for defamation. Do so and claim punitive damages as well as the lost profit. Faced with the lawsuits and the genuine certificate the Texas jeweler will almost certainly apologize fulsomely and if the sale is not reinstated pay the island jeweler for the loss of sale. The New Yorker will also not be able to impugn the island jeweler/s credibility.

Daniel H.
Tecumseh, MI

I would use the "carrot and the stick" approach with Emerson's. I'd call Mike and tell him that he made a mistake on his appraisal (he actually made a mistake even taking in the appraisal he was not qualified to do) and that I could easily prove that in court with expert testimony. I would ask Mike to please call Mr. Levine and explain honestly that he "got in over his head" on the appraisal. He should then follow that up in writing with a letter to Mr. Levine, with a CC to my store, explaining that he had misidentified and grossly undervalued the piece.

If Mike didn't agree to this arrangement, I'd make it clear that he'd face legal action. In this case, Emerson's would be liable for the lost sale revenue, legal fees, punitive damages, as well as bad publicity. But, of course, there would be no need to take the hard way out of the problem when it could be resolved quietly and inexpensively.

Michael W.
Greensboro, NC

Jim should get an AGL report on the emerald, contact the customer stating that he has spoken with the appraiser and that the appraiser acknowledges he may have been out of his depth on this one. Jim should not attempt to sell the piece but merely state that he is doing this so that the client knows they are a reputable and knowledgeable company. They could also recommend another local appraiser or two with decent credentials to provide the "value judgement" that the customer seems to need if the customer is interested in repurchasing the piece. But how many Caribbean jewelers have a for-any-reason return policy? I thought the plan for those stores was mainly drunk buying.

Susan S.
Bell Gardens, CA

I think if I were Jim, I would send the piece to GIA and get an apprasial from them . I would get in touch with Mr. & Mrs. Levine by letter and explain the situation to them about the local jeweler and of course include a copy of the apprasial. I would also send the same to the local jeweler, to show the man how errant he was.  

Not being educated enough to comment on the stone, the gentleman should not have given his apprasial of the necklace nor should he ever give an apprasial on a colored precious stone. Colored stones are tough to really tell sometimes. Personally if I have a large stone, I'm going to take it to an expert, even our gemologist on-staff agrees with that. It is one thing to know diamonds and gold, it is a whole world away from colored precious stones.

Your reputation is all you have in the jewelry trade and that is what needs to be protected.

Marcus M.
Midland, TX

This is a good one! Personally I have seen a lot of people spend a lot of money on garbage they buy while on cruises or vacation. They think they are getting something really special at a much cheaper price than on the mainland. That should already sound fishy...right? Jim should try to salvage the sale but I would first do some research and find a credible appraiser in Mr. Levine's town. Then call Mr. Levine and tell him you are paying for the appraisal and shipping of the pendant back to Texas (if he agrees). He can then meet with the new jeweler/appraiser and decide if he wants to keep the Emerald pendant after it is verified as genuine. Not sure what to do about Emerson's other than report them to the BBB. It would be worth a little face to face meeting if there wasn't 3000 miles between them.

Dennis P.
Johnstown, PA

I would write a letter to the buyer and explain the history and significance of the GIA. In addition I would tactfully but directly explain that the hometown jeweler, although having good intentions,was "over his head" and request a follow up call to at the least, defend my reputation and at the best re-make the sale.

Kevin C.
Ponte Vedra Beach, FL

With so many different gemstones, synthetics and gem treatments that are common to today's marketplace, no one should be doing appraisals or offering opinions with out being a G.G. Just being in the business for a long time does NOT qualify you to do appraisals. This is why so many retailers are now bringing in an Independent Appraiser who has the proper qualifications to provide their clients with appraisals. 

Appraisals being used for obtaining insurance, or to settle estates are legal documents. Retailers should ask their legal counsel how they would be able to defend themselves if an appraisal they did landed them in court. Without a degree in gemology and specific appraisal theory training, I doubt it would go well. Having a disclaimer on your appraisal stating this is just your "opinion" may not protect you from being sued!

Retailers should stick to retailing and leave the appraisal side of the business to the professional appraisers who are trained and qualified, and have no conflict of interest.


This article originally appeared in the July 2017 edition of INSTORE.

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