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EcommerceBytes-NewsFlash, Number 892 - November 17, 2004 - ISSN 1539-5065    3 of 5

Experts Advise Caution When Buying Jewelry at Online Auctions

By Elisabeth Townsend
November 17, 2004

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Would you buy a diamond bracelet for $42,000 or a wristwatch for $169,900 on the Internet? Online jewelry auction sites including eBay are hoping you will.

Even if you're not in the high roller group, the idea of getting a bargain on that pearl necklace or opal ring sounds enticing. With Web sites galore, shopping is easy, fast, and there are no pushy salespeople, not to mention the number of affordable baubles at your fingertips.

And there's the rub - when buying jewelry online, you can't see and touch what you're buying. That's important for two reasons: to decide if you like the look of the jewelry and to know its value. There's no way to look for chips, cracks or scratches using a ten-power triplet loupe or special magnifying glass when buying online.

According to gem and jewelry expert Antoinette Matlins, other typical problems include items represented as better quality than they actually are, slightly inflated weights (small weight differences can change the value), and inflated or fraudulent appraisals, laboratory documentation or GIA (Gemological Institute of America) reports. Matlins is a Professional Gemologist and author of several books including "Jewelry & Gems at Auction" (http://digbig.com/4cdcf).

Even though eBay is working on new guidelines for selling jewelry (http://digbig.com/4cdce), consumers should take common-sense steps to protect themselves in this relatively new but hot-selling arena. So how do you buy jewelry online safely?

Consumers should be well-informed before buying, stresses Matlins. Why? Many Web sites don't provide completely accurate information. Also, most sellers aren't gemologists - specialists trained to identify and rate the quality and condition of gemstones - so they may not describe the stones properly.

Go shopping at independent retail jewelers, visit the gemologist organizations' Web sites (see list below), and check out the FTC guidelines (in PDF format) at http://www.ftc.gov/bcp/guides/jewel-gd.pdf.

When shopping on eBay, read the fine print. Sellers with "Power Seller" status should get the same scrutiny as all others. Consider checking for complaints with the Better Business Bureau and the state attorney general's office.

Before you even bid on an item online, Debbie Matties, staff attorney in the Division of Marketing Practices at the Federal Trade Commission (FTC), suggests finding out about the auction Web site complaint procedures because there may be a time limit or specific steps to follow.

A sure-fire way to avoid fraud is for the buyer to pay for an appraisal of the bijou. Plus it's a good sign if the seller is willing to take this step before they receive your money. In the meantime, payment could be held in escrow by a third party for a nominal fee and would be paid to the seller once certain conditions have been met. (Watch out for fraudulent escrow services!)

Use an independent gemologist who is also an appraiser, emphasized Matlins, because they can "confirm the identity and quality and condition of gemstones...(and) estimate the true value." Not all certified gemologists are appraisers. Gemologists have completed an accredited or graduate program at the Gemological Institute of America (GIA) or the Gemmological Association of Great Britain.

Independent gemologist-appraisers are easy to find online through these organizations:
ASA—The American Society of Appraisers—Master Gemologist Appraisers, http://www.appraisers.org
AGSL—The American Gem Society—Certified Gemologist Appraisers or Independent Certified Gemologist Appraisers, http://www.ags.org

Also, ask the seller for a sales receipt with all representations in writing, including - with a diamond, for instance - the color, clarity, weight and "make," a one-word description of the quality of the cut, and a statement that they have examined the diamond and that it matches the accompanying GIA grading report.

Rather than paying by check, cashier's check or money order, consider paying with PayPal, a credit card, or use an escrow service, checking their policies before you make a purchase.

"A red flag for sure," according to Matties, is when the seller requests payment from Western Union or wire transfer, which is like cash.

And if you're not satisfied with your transaction, Matties recommends first trying to work it out with the seller, and then following the auction Web site guidelines.

Still not happy? Go to http://www.FTC.gov where there's a link to file a complaint or call toll free 877-FTC HELP and be sure to mention "auction site." There is no time limit to register a complaint with the FTC, but Matties says sooner is better than later. They "can't run down every complaint," she said, but the FTC does look for trends and tries to "spot potential frauds that might need to be investigated."

"In gems and jewelry, the consumer gets what they pay for or less," said Matlins. "They never get more. If you think you're getting a bargain… you're not getting what you think you are."


Bid4Assets Auction Site

eBay Auction Site
Forum with links to tips and resources

AuctionBytes Chart of Online Auction Sites

AuctionBytes Online Fraud Resource Center

AuctionBytes Article on Fraudulent Escrow Services

About the author:

Elisabeth Townsend is a freelance writer specializing in food, wine, travel, and feature writing, and photography. She took her writing, editing, and photographing skills into the freelance journalism world after 13 years of business experience including corporate communications.

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