How to buy diamonds safely-Validation & Escrow Service

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The Diamond Validation & Escrow Service protects buyers against false claims about the quality of a diamond listed on eBay Australia. This guide explains how you can use this service to get a great deal.

This guide will not tell you which diamond to buy or how to select the right diamond for you. This guide will help you protect yourself on eBay when you find that magnificent gem.

There are many horror stories circulating about eBay diamond purchases gone bad. Most of them are true! The chief reason why these unfortunate buyers were conned was because they did not follow the first and most important rule for purchasing a diamond:

Rule 1 - GET EDUCATED

Buying a diamond can be a daunting task. There are volumes of information available on the internet about the various characteristics of diamonds. Diamond retailers (online and bricks-and-mortar) make various claims and use colourful terminology to impart to you the quality, authenticity and beauty of the diamond they are trying to sell to you.

Rule 1 does not state 'Become a diamond Expert.' Rule 1 states ' Get Educated.' This means do a little bit of reading. Understand what factors affect the price of a diamond. Understand how you can be certain that those factors, as they relate to a diamond being shown to you, can be checked, verified or substantiated. Understand what sellers are really saying when they state ' Top Quality VVS2-VS1' or ' Big Size 8-10 Points'

A great place to start your reading is at the eBay Australia  Diamond Buying Guide

Do a Google search for 'Diamond Buyers Guide.' You will get many results, with most guides giving you similar information, so do not waste your time reading all of them. Just make sure you understand the 4 C's and how they can affect t the price of a diamond. Get a feel for the terminology related to diamonds.

To illustrate this point, let us look at the effect of clarity on a diamond's price. Take a 1 Carat, G Colour diamond with an Excellent proportion grade and an Excellent make. Now compare a VVS2 stone to a VS1 stone. At the time of writing, the VS1 stone could be purchased from a particular internet retailer for AU$12,043.38 while the VVS2 stone is available at the same merchant for AU$13,582.76, almost a 13% difference in price! So if a seller is advertising a VVS2-VS1 stone, wouldn't you like to know what the exact clarity actually is? I would.

Having a little bit of knowledge will help you identify potential false claims.

This brings me directly to Rule 2

Rule 2 - BUY CERTIFIED

Any seller can claim that their diamond is a VVS2 stone rather than a VS1. It is simple; remove a V and change the 1 to a 2….but how that seller substantiate the claim? That is the important question. A diamond grading certificate from an internationally recognized and endorsed diamond grading laboratory is the only document that can accurately confirm a diamonds quality is as claimed.

When buying a stone, find out if it comes with a grading certificate. Also find out which laboratory has issued the certificate. Then make sure the issuing laboratory is internationally recognized and respected.

Some of the more popular and recognized laboratories are the AGS, DCLA, EGL, GIA, HRD and IGI. Google these labs to find out more about them.

A grading certificate should NEVER state a value. A true grading certificate only states the characteristics of a diamond. It will never give an indication of the value of the diamond. Certificates stating value are Valuation or Appraisal Certificates, not grading certificates. Be wary of sellers claiming to be selling 'Certified Diamonds' where the certificate states a value.

Valuers generally do not have access to the sophisticated equipment required to grade a diamond with the accuracy of a real grading laboratory. Valuers normally make and educated assessment of the characteristics of the diamond. As I have illustrated above, a small mistake, calling a diamond a VVS2 rather than a VS1 could have a significant impact on the price.

Rule 3 - SET YOUR PRICE

You now have the tools and the knowledge to determine a fair price for a diamond. Firstly, ignore all values quoted on a sellers listing.

Ignore statements like ' Recommended Retail Price: $10,000'
Ignore statements like ' Valued At: $15,000'
Ignore statements like ' Valuation Certificate For: $12,000'

I guarantee you that no value quoted on any diamond listing is a fair indication of the value of that diamond. Ask yourself these two questions:
  1. Would you accept a valuation from an estate agent selling you a house?
  2. Would you sell a diamond for $3,000 if its true value was $10,000?
See my point?

Once you have found a certified stone that you would like to purchase, shop around before making your bid. There are numerous online diamond retailers selling certified diamonds. The best way to determine a fair price is to search their databases for similarly graded stones. The results you get from these online retailers should give you a very good indication of the true online retail value for the diamond.

I must just stop here to clarify my statement above: ' true online retail value.' It is important to note that, in the current marketplace, online diamond retailers are selling diamonds significantly cheaper than traditional bricks-and-mortar retailers. When buying off eBay, it is important to set your price based on internet retailer prices and not traditional jewellers. Only internet retailers are directly comparable to eBay sales. Again, make sure you are only searching certified diamonds.

Rule 4 - MAKE YOUR PURCHASE - SAFETLY

When you complete your purchase on eBay, ensure you elect the 'Diamond Validation Escrow' method of payment. This service combines a traditional escrow transaction and a verification service where the diamond is assessed by a recognised diamond grading laboratory to ensure it matches the seller's description.

When using this service, you will make your payment to Escrow Australia who will hold your funds in Escrow. The seller will then send the stone to Gemex who check the diamond and verify that it is the stone described by the grading certificate. Only when the diamond has been verified, does your payment get released to the seller. At the same time the stone is delivered directly from Gemex to you. If the stone does not check out, your funds are returned to you and the stone is returned to the merchant.

More information about this service is available at  eBay here.

In addition to recommending this service, eBay Australia has created a new sub-category under 'Jewellery, Gems, Watches' category, called ' Diamond - ESCROW Offered' The listing policy of this category ensures that all sellers listing diamonds here must offer the Diamond Escrow & Verification service as a payment option. To ensure a satisfying diamond purchase, only buy diamonds listed in this category.

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