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GE, LKI and the Trade
Sep 30, 1999 11:28 AM
By Martin Rapaport
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By Martin Rapaport
General Electric (GE) Pegasus Overseas Limited (POL) color treated diamonds have been a subject of great concern and controversy in the diamond trade over the past few months. Lots of folks have given GE and Lazare Kaplan International (LKI) a hard time over their introduction of a product that is seen as a threat to the “normal” diamond business. Frankly, lots of people would simply like to see POL diamonds just go away, as they would the Rapaport Price List and even Gemological Institute of America (GIA) grading reports.
But what to do? New technology and innovation are a natural outcome of growth and development. Can we stop the clock? Can we crawl back into the past? Clearly the challenge for our industry is to meet innovation head on and find ways to use it to better the diamond industry.
The real question is, not if we can stop innovation, but rather how to deal with it. How can we assure that new products are presented in a fair and honest manner? How do we introduce modern innovation while retaining the honesty and integrity that are the hallmark of our diamond industry?
GE and LKI have come out in full support of disclosure and detection. As evidenced by the recent GIA report that confirms the high temperature and pressure (HTHP) nature of the treatment, they are also cooperating with the GIA in the area of detection. While the GE brief to the Federal Trade Commission (FTC) should have supported disclosure even at this early stage, and the argument over “treatment” verses “process” terminology is irrelevant, it is time to recognize that GE and LKI have done everything they can to offer the POL diamonds in a fair and honest manner. They have delayed product introduction, are laser inscribing every stone at additional cost, not selling processed rough and cooperating with the GIA on detection. Pray tell, what more do we expect from these people?
Perhaps it is time for the industry to stop blaming GE and LKI and get on with the real issue. How can we assure our customers that they are buying non-treated diamonds if the POL stones are not detectable by the GIA? How do we deal with a consumer that asks – Is my diamond treated?
Retailers and dealers cannot get away with an “I don’t know” answer to these questions. The only rational approach is to assure and guarantee the customer that the stone they are buying is a non-POL stone (if there is no laser marking on the girdle). Yes, we must guarantee our customers the authenticity of our products even if we cannot independently verify the authenticity. Yes, if we unknowingly sell a consumer a POL diamond, which has had its inscription polished off, we must take it back and provide a full refund. Consider the World Federation of Diamond Bourses (WFDB) Moscow resolution, “If such a treated or processed diamond is sold without disclosure, even in good faith, the buyer shall be entitled to cancel the sale, return the diamond and obtain a full refund of the purchase price.”
While every buyer should insist on the words “natural untreated diamond” on every invoice, the non-detectable nature of the GE-POL diamonds tests the integrity of our industry. How well do you know and trust your suppliers? How sure are you that they, or the people they buy from, would never polish off a GE-POL inscription? For years, all of us have proudly promoted the wonderful honesty and integrity of our industry. Well, it is time to believe in what we say. Time to put our money where our mouths are. Go ahead make the commitment to your customer. Go ahead put your blind trust in your supplier. You don’t really have a choice anyway. Perhaps the best thing about these undetectable GE-POL stones is that they will force us to trust each other, even if we would rather not. They force us to be what we claim to be.
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Tags:
GIA, Lazare kaplan, World Federation of Diamond Bourses (WFDB)
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