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Real Deal: The Case of the Branded Diamond Debacle

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The Case of the Branded Diamond Debacle

A wildly embellished negative review has David Byron in a bind. Should he go on the offensive or just stay quiet?

B Y   K A T E    P E T E R S O N

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One of the first business decisions Dr. Jessica Matthis was finally getting engaged — assuming she could figure out a way to get her slow-moving boyfriend to make it official.

David Byron made after taking the reins from his father at Andrew Byron Jewelers was to pick up the hottest branded diamond line in the industry — Branded Ideal Diamonds. His father, Mike, had been turning away the line’s rep because he felt the product was overpriced and did not offer real value to customers of the 75-year-old store.

David, however, was convinced that brands were the way of the future and was concerned that if he didn’t put the line in, the rep would offer it to the store’s biggest competitor — complete with the expensive collateral, staff training and co-op advertising that came with the inventory.

Over the years, David had enjoyed many opportunities to laugh at his dad and at his friends when they teased him about “drinking the Kool-Aid,” since they had become some of his best-selling products, accounting at one point for 25 percent of his store’s annual volume.

Years later, when the economy began its freefall, David saw more and more people coming in looking to sell their old gold and silver jewelry. He initially resisted, not wanting to turn Andrew Byron into a pawn shop — but over time he realized that these people, who had been buying from him — and from his father and grandfather before him — were in need of service, and that the profit in gold refining would help get him get through the economy’s slump.

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He decided to buy scrap gold and silver only, turning over customers wanting to sell finished jewelry to a friend in the next town.

EDITOR’S NOTE

Real Deal scenarios are inspired by true stories, but are changed to sharpen the dilemmas involved. The names of the characters and stores have been changed and should not be confused with real people or places.


Once again, David was able to rest comfortably with his decision for several years, happy with the profit boost gold buys provided, and satisfied that his customers looking to sell more than melt were being well cared for by his friend.

About a month ago, David’s sales manager called him to the floor to talk with a customer who was unhappy when told that Andrew Byron did not buy diamonds, and would not be able to help her re-sell the Branded Ideal Diamond engagement ring she and her ex-husband bought at the store years before.

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David explained the store’s policy and their commitment to selling only new jewelry, and also cited the limits that the Branded Ideal put on their dealers with regard to selling only new product.

After a brief conversation, the customer became indignant, insisting that since she bought the diamond from the store, David was obliged to buy it back.

When he suggested she either try to sell it via an online auction site, or take it to his friend in the next town, she angrily declared she had her own friends in the jewelry business and walked out.

Ten days later, David’s sales manager called him and urged him to look at the latest review of the store on a popular online review site:

My engagement ring was purchased at Andrew Byron, a very pricey Branded Ideal Diamond. After being divorced, I went to them for a recommendation on the best way to sell it. They recommended eBay. After getting very low offers on my extremely expensive ring, I visited a friend who owns a very large jewelry store, and asked about how to get the most for the ring. He said to go back to the place it was purchased because they know how much was spent and should be willing to work with me since things did not work out and they made a large profit on me already and besides, the ring would have appreciated in price. He said that I should ask for close to half of what was paid.

When I visited Andrew Byron to get a price to sell the diamond back to them, the owner explained they have a contract that authorizes them to sell only new Branded Ideal Diamonds, and therefore they do not buy them back. (Their outside sign flashes “We buy diamonds.”) I decided to look into this and found this on the Branded Ideal website: “Reselling is often easiest through the jeweler who sold you the diamond in the first place.”

This just goes to show the kind of service Andrew Byron offers. They are a very shady jeweler who does not care about their customers.

The BIG questions

Should David reply to the review, pointing out the flat-out lies in the customer’s story? (The “We Buy Diamonds” sign, etc.)

Should he try to contact the customer and work something out just to quiet her down?

Should he be concerned that his customers are finding “Branded Ideal Diamonds” enjoy no premium in the secondary market?


R E T A I L E R   R E S P O N S E S

Marcus M.

Midland, TX

Well, David made the ultimate mistake of going from a high-end retailer to basically a cash-for-gold store — it sends the wrong message to customers and only invites trouble. In this case, David should reply to her review in a respectful but factual matter, stating his policies and correcting her discrepancies. Then he should contact her personally and make her a one-time special offer to make good on the situation. Then he needs to figure out a direction for his business and stick to one game plan.


Virginia U.

North Palm Beach, FL

As an AGS-certified independent appraiser, I am called to perform appraisals of jewelry in the event of a divorce. I have yet to experience anyone that is satisfied by the fair market value or the actual cash value in selling after a divorce. I think you have to let this angry person go, knowing that no one is going to make her happy in reselling the ring.


Edward S.

Garwood, NJ

Just ignore it. I also got a made-up rant on Google where the person writing it did not exist. It was probably a competitor. It happens.


Wink J.

Boise, ID

David has behaved like an idiot. He represents a branded line of diamonds that he sells for a big profit. He should be willing to buy them back and should have a written guarantee as to what he will buy them back for (we pay 80 percent of the retail price of our branded diamonds.) Having that will lend credibility to the value of the brand and will increase the sales of his diamonds to more than cover any monies that might be lost with the occasional buyback. When you buy a diamond back, whether it’s because of a divorce, the economy, or a medical emergency, you create great goodwill that will be beneficial to your store in the long run. By hiding behind some ridiculous contract, you are just asking for the kind of review David has received.


Nicholas P.

Dickson City, PA

We buy diamonds OTC and we pay what a wholesaler would pay us. It’s a sad situation, with a bitter divorce and an angry client who has told the world her story. All you can do now is stand up and take the hits, tell your side and hope some happy customers come to your defense. Do nothing, and you’re saying the customer is right.


John M.

Bethel, CT

David let it get away from him. He could have consigned, wholesaled, or offered some kind of trade to this customer. You either care about people or you don’t. I let my clients know I can’t buy it if I can’t sell it. With a positive attitude and a little discretion, there’s always something that can be done.


Stuart T.

Bel Air, MD

I would answer the post explaining that store policy is to not buy any diamonds second-hand, plain and simple. My next move would be to speak to a good lawyer and check out the legal options concerning her post. When your honesty is questioned, you have to respond.


This article originally appeared in the January 2015 edition of INSTORE.

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