Jewellery buyers should beware as some retailers are replacing diamonds with substandard or fake stones, according to a source at International Diamond Laboratories.
They say counterfeit stones are being sold on pieces along with one or two genuine ones. The market is in the middle of a price war, with some retailers offering discounts as high as 85 per cent to clear their unsold stock.
But gemologists are warning customers to be cautious about the stones they buy at steep discounts as they could be fake or substandard.
Diamond prices have always been high because of the monopoly structure of the market, and man-made cultured stones cost thousands of dollars less than natural ones.
"We get a number of certification requests from diamond jewellers," a source at International Diamond Laboratories, part of Dubai Multi Commodities Centre (DMCC), told Emirates Business. "We have found that some diamond jewellery sent to us for certification is not of pure quality – some pieces have just one or two original diamonds and the rest are fake or substandard.
"We just send back the rejected jewellery but some of the clients manage to get certificates from private agencies and sell it in the market through special promotions.
"As our certification rules are stringent, traders may be getting certification from other sources and pushing fake diamonds on to the market. Under the certification rules, we have to just send back the rejected diamond jewellery to the trader and there is no penalty or fine."
DMCC says on its website that customers have to know the four Cs of diamonds – carat, cut, clarity and colour. It is difficult for the layman to distinguish between natural diamonds and fake ones. Customers should be cautious about 85 per cent discount offers for high-value product like diamonds.
The best fake diamond looks similar to a real one and even a professional diamond jeweller may be unable to determine whether a stone is fake or genuine.
Rosyblue, an international dealer in premium branded diamond jewellery, is now trying to enter the generic market and advises its retail partners to sell pieces at fixed prices.
A company official said: "Giving a discount is an independent decision for each individual retailer. Since everybody is coming out with discounts, customers have lost some confidence in the market. We are advising our retail partners to shift to fixed-price products. The customer obtains diamond jewellery at reasonable prices by cutting the amount of premium charged." Rosyblue accounts for about seven per cent of all diamond jewellery sold in the world. In the Middle East, its branded products are distributed through 450 retail outlets owned by major jewellery chains.
However, the possibility of customers being sold fake diamonds was dismissed by Amit Dhamani, Managing Director of Dhamani Jewels and a board member of Dubai Diamond Exchange.
"It is not possible to dupe customers in this market and anybody with a complaint can go and directly report it to authorities," he said. "All diamond traders and jewellers in the UAE are under the control of regulators.
"It is not possible to sell fake diamonds because Dubai Municipality and government agencies conduct strict quality checks."
He said even if diamond jewellery was not certified the sale invoice gave details of the stones and any violations could be reported.
A market source said: "Currently many diamond jewellery traders are offering discounts ranging from 35 per cent up to 85 per cent, which is surprising as diamonds are a high-value product and profit margins in generic diamonds are not very large."
"Dubai Municipality's gemstone laboratory tests diamonds and gemstone jewellery for quality and there is a certification requirement. However, some traders manage to get certificates from private agencies and for low-end products below certain carat ranges the certification requirements are not rigid."
A sales executive at a leading diamond jewellery store said: "There are so many offers in the market and consumers are really confused about genuine products. We are trying to get maximum sales by offering discounts from 35 per cent to 80 per cent."
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