V. Phony Discount Trap

You don't have to look very hard to find "diamond exchanges," "jewelry marts," and "wholesalers" advertising 50% -- 60% -- 70% off sales, on a seemingly continuous basis. Can you really get a great buy at one of these places?

Legitimate, true wholesalers sell to other dealers in quantity (huge volume), for the purposes of resale, and do not sell to the public. If someone is representing themselves as, "wholesale to the public," they're misleading consumers into thinking they're getting a "wholesale" price. Nobody will sell jewelry for the same price they paid.

Here's an important point to consider. If the seller fibs about the business they're in, they may not tell the truth about what they sell, either. Be extremely careful when dealing with so-called "wholesalers." Regardless of the "irresistible deals" thrown at you, it is simply not possible to buy at legitimate wholesale prices.

Sadly, many jewelry sellers (even large department stores) take quite a few liberties with their discount arithmetic. The main issue is 50% off what? What's the "original" price they're basing the discount on? How long has it sold at that original price? How many were sold? How long has the "sale" been running?

The Federal Trade Commission sets specifications for discount basis, rules which most reputable independent jewelers follow scrupulously. To your detriment, others choose to ignore the regulations and hope to skirt around the law.

For your protection, whenever you buy a piece of fine jewelry, make sure to have the seller write a complete description on your sales receipt. If you're buying a diamond, then the carat weight, color grade, clarity grade, size, and dimensions should be listed. For multiple stones, carat weight of the main stone as well as total carat weight including side stones, should be listed. Your jeweler should indicate if the diamond has been treated, drilled, or enhanced in any way.

For colored gems, get an exact description of their color characteristics, as well as dimensions and carat weight. Importantly, get full disclosure of any synthetic or treated stones.

Gold jewelry should always include karatage on the bill of sale.