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Real Deal

Real Deal: The Case of the Document Dilemma

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BY KATE PETERSON

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.

Sally Murray is a talented professional who worked hard to earn her G.G. title. She has been an employee of Brink’s Fine Jewelers for the past eight years, and their on-staff gemologist and appraiser for the past five. Mr. Brink helped finance her GIA education and once complete, moved her off the sales floor and into the lab. Mr. Brink always says that what he admires most about Sally’s work is her commitment to accuracy and her unwillingness to be swayed by “what other people want to hear.”

Brink’s is a moderate to high-end, small store located in a strip center directly across the road from a major Midwest shopping mall. They specialize in diamonds and bridal sales. While on the sales floor, Sally was trained in both product knowledge and selling techniques, and was well versed in the various products sold by Brinks.

Over the years, Sally watched Mr. Brink respond to increasing competition in the diamond business by looking for ways to set Brink’s apart — to offer the consumer greater selection, service and value while trying to protect shrinking margins and profitability. One of his earliest decisions was to institute an “Only Certified” diamond policy for the store. For the past seven years, every Brinks diamond was sold with a certificate from one of several well-known industry laboratories. Mr. Brink saw to it that many of the bigger and finer quality diamonds in his inventory were certified by GIA or by the AGS laboratory, but most of the diamonds in stock were documented by other, more “mainstream” labs — the ones that were also used by many of the large chains and mall stores. His theory was that customers who had been shopping in the mall would recognize the laboratory names and would be comfortable with their validity. The strategy seemed to pay off in steadily increasing sales over the years.

As Sally continued her gemological studies, however, she became increasingly aware of many instances in which the grades and retail values assigned by these labs appeared to be generous at best, and sometimes even blatantly inaccurate. When she brought these discrepancies to Mr. Brink’s attention, she was most often met with the same response: “We pay a premium to get these lab reports. If the customer is comparing us to the other stores, it’s all a fair comparison. Besides — we don’t ever sell the diamonds for the value they say anyway. Don’t worry about it.” In truth, the diamonds Sally considered “serious” problems were few and far between — and most of them ended up getting sent back before they were sold.

As Sally started working on the jobs in her in-box one Monday morning, she came across a diamond solitaire of about 1.5 carats that had been taken in for appraisal several days before. At first glance, she could tell that the diamond was of poor quality — heavily included, brackish and somewhat dark in color. The note on the envelope indicated that it had been purchased from a major chain store in the mall over five years ago. Upon initial inspection, Sally noted that the girdle of the diamond was inscribed with the three-initial name of a trade laboratory (one also used and promoted by Brink’s) and a certificate number. She followed her usual procedure for verifying weight, assigning color and clarity grades and providing a cut quality description. Sally graded the 1.51 carat round diamond as a ‘K’, in color and an “I2” clarity with fair proportion, symmetry and polish. She assigned what she considered a generous retail replacement value of $6,350. After completing her evaluation, Sally visited the lab’s website and pulled up the certificate number that was inscribed on the diamond’s girdle. She was appalled to see that six years ago, the lab had graded the diamond as an “F/G” in color and “I1” in clarity and had assigned a retail replacement value of $13,950.

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Sally asked Mr. Brink to verify her grade and price determinations, then explained the problem with the existing lab certificate. While they were not certain whether the customer actually had the original lab document or even what he paid for the diamond when he bought it, they both saw the potential for a serious problem. Under no circumstances would she or Mr. Brink inflate their findings to match those of the lab — but how would they answer the customer’s questions about the disparity between their current assessment and that of the original appraisal? The bigger problem in Mr. Brink’s eyes involved protecting his store’s reputation for quality and accuracy while not damaging the reputation of a lab that still documents many of the diamonds he sells.

The BIG Questions
How should Mr. Brink deal with the trade lab in question? Are his reasons for continuing to use the lab’s documents bigger than the reasons not to? How should he and Sally deal with the customer?
Comment below (please leave your name and store) or at [email protected]

 

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