There is something about paper that should make you mad!

One of the more interesting educational sessions of the JCK Jewelry Show for me was the presentation by Richard Drucker of GemWorld.

It was about ten issues facing the industry today and one of them was the issue of over grading by some of the labs. I wish he had done a more inclusive comparison, but he included only GIA, EGL USA and EGL Israel. His comparisons are pretty damning as they are, but I think inclusion of AGS (which is normally higher priced than GIA) and IGI would also have been informative.

Here is the information that was shared. The stone being compared is a 1ct G-VS2 with none to slight fluorescence.. In his comparison Mr. Drucker listed the high, low (range) and then the average, mean and mode of the stones looked at. For simplicity I am only going to list the Mode.

Using GIA as the benchmark, and thus 100% EGL papered stones sell for -27% of what GIA sells for, ie if you paid $100 for the GIA stone you would pay $73 for the EGL USA.

For the same stone papered by EGL Israel the cost would be -40% ie $60 for the same grade of stone that would cost you $100 from GIA.

Worse is the FACT that this same comparison two years ago had the same stone selling for -25% rather than today's -27% from EGL USA. From EGL Israel the spread from two years ago has changed from -33% to today's -40% meaning that in the opinion of retailers the grade disparity is getting worse. Grade creep is here and it is going to keep creeping for those second and third tier labs.

One wholesaler asked by Mr. Drucker why he carried stones he knew to be over graded said it was because his retailer clients demanded it of him.

Why do they do this?

BECAUSE THE RETAIL CLIENT BELIEVES THESE BOGUS PAPERS AND BUY THEM FOR THE "BARGAINS" THEY OFFER. Thus many retailers demand a steady supply of these insidious "certificates" to feed to their unsuspecting victims.

Sad. Very sad.

Does this make you mad?

Wink