New Diamond Panel Tackles Undisclosed Synthetics

Aug 6, 2017 9:46AM    By Avi Krawitz Dear Patrick Thank you for your comment below. The article “Synthetic Diamond Scam,” which you reference, written by our chairman Martin Rapaport and published in the April 2016 issue of Rapaport Magazine, outlines our concerns about the synthetic — or lab-grown — diamond market. In fact, many of the points you raise are addressed in the article itself. Before we get to those, a word on terminology: The industry is in discussions regarding how to consistently refer to lab-grown diamonds — as the article on diamonds.net above explains. For now, we’re comfortable with the use of both synthetics and lab-grown when referring to this product. Mr. Rapaport’s article does not question the synthetics product itself, but focuses on the manner in which synthetics are marketed and sold. The scam to which he refers centers on the false claims that lab-grown diamonds are a more ethical alternative to natural diamonds. This is particularly evident in the negative marketing that many sellers of synthetics use. Having been in the diamond business for 40 years, you would be aware of the tremendous good that natural diamonds do for communities around the world, where millions of impoverished people are sustained through diamond mining — particularly informal diggers. Claiming that synthetics are more ethical than socially responsible natural diamonds means compromising the livelihood of those workers and their families. Secondly, while it is true, as you mention, that synthetics offer consumers more affordable pricing, the article argues that consumers are being misled. Given that synthetics lack the rarity of supply that natural diamonds enjoy, we expect that prices of synthetics will decline as supply increases — and that means resale prices as well. “Natural diamonds have natural scarcity, which enables them to be a store of value,” Mr. Rapaport explained. “Synthetic diamonds have no scarcity and are not a store of value. Consumers think they are buying a diamond with all of its attributes. They do not realize that they are buying something that does not hold value.” Synthetics and natural diamonds are differentiated products not only because of the value they hold, but also because of what they represent. When a couple gets engaged, or celebrates a life event, the woman expects the man to give her something that will retain value, just like their relationship. Synthetic diamonds do not offer that same assurance. Finally, it is worth stressing a point that Mr. Rapaport made in his article. If a retailer decides to sell synthetic diamonds, that retailer should be totally honest with consumers. This means letting them know that synthetics are not more ethical than socially responsible natural diamonds, and that synthetics will likely lose value over time. In my view, honest players in both sectors can find their place in the market — as long as full disclosure is made to consumers. Thanks again for your comment. Avi Krawitz News Editor Add Comment

Aug 1, 2017 5:28PM    By Patrick Fay I have been a buyer and seller of Lab Grown diamonds for almost 2 years, and have been in the diamond business for 40 years. Lab grown diamonds are the best thing to happen to diamonds in a long time...consumers will reaping the benefits thru more affordable pricing. The only reason the mined diamond producers and sellers have a problem with them...is because they just learned that their mined diamonds from DeBeers are grossly overpriced, and one should direct that blame on Rapaport who artificially inflates the prices of mined diamonds thru his diamond list. Also, The Rapaport Magazine cover story of a year ago where Rapaport declared lab grown diamonds a "scam" was disgraceful to the magazine and him personally because he wrote it. But, on the flip side he also alerted the "whole world" to lab grown diamonds and that was a good thing, because he let the cat out of the bag and "propelled" the lab grown business across all avenues! Furthermore, the GIA is in cahoots with minded sellers and Rapaport because they created different standards for grading lab grown diamonds even though as -Stephen ­Morisseau, Director, Gemological Institute of America (GIA) publicly stated "Synthetic diamonds are diamonds. They’re not fakes. They have all the same physical and chemical properties of a mined diamond.” so that begs the question why not grade them the same! And, the GIA keeps calling them "synthetic", they do this in an attempt to discredit lab grown diamonds to consumers...knowing that it is confusing terminology and may/will lead consumers to believe that lab grown diamonds are fake or imitation.like CZ's. Shame on the GIA for deliberately confusing consumers. In closing the ship has sailed...I am on board with lab grown diamonds 100%, and in 5 years time...also will the majority of diamond buying consumers!! Patrick Fay Diamonds Inc, Chicago Add Comment