Remember the old days when fine jewelry guild retail stores would never openly promote that they buy-back jewelry? It was always a service only offered to their best clients in dire need and done in the privacy of the owner’s office, Liz Chatelain writes on www.israelidiamond.co.il.
The new reality: I was in Kansas City, MO this past week and visited Tivol’s Briarcliff Village location. What a beautiful store. Only the most popular best designer jewelry and watch brands for sale, gracious staff and lovely location. What did I see atop every section of display case? “Selling your gold can now be just as rewarding as buying it.” With the tag line, “We’ve been selling gold with integrity for 100 years. And that’s exactly how we’re buying it today.” Every jewelry retailer in the U.S. with half a brain is now buying back gold jewelry. It is almost a badge of honor for consumers to share with their friends how much they got for that old tired looking herringbone necklace that they haven’t worn in years. Three leading factors driving this recent phenomenon: extreme rise of gold price, the great American recession and buy back gold offers everywhere.
But what happens when the jewelry has diamonds, or better yet, a center stone diamond? The early retailer adaptors of cash for gold programs raked in most diamond and colored stones for free. A Florida company that was the first to advertise buy back gold nationwide was Cash4Gold. In their consumer instructions they clearly stated to remove all stones before shipping the item(s) to them, because they didn’t pay for any stones. Consumers did not know how to remove stones without breaking them. In most cases, they had called around first to local fine jewelry retailers to sell their jewelry, but most retailers responded with, “We’re not that kind of jeweler.” I understand in the early days of Cash4Gold about 55% of all rings came in with diamonds and of that, 20% were engagement rings. You know what that means. I would guess the team at Cash4Gold was doing the happy dance, ‘cash for gold and get the diamonds for free.’ Has a nice ring to it.
Today consumers are a bit better educated on what they should expect. Plus, they can now shop their jewelry around at all the local jewelers they want. Why not? If retailer B doesn’t improve on retailer A’s price, they will go back to retailer A in a flash with no qualms about loyalty or trust. When you are selling, all of these issues melt away, and consumers are selling their gold, platinum and silver jewelry by the kilo.
This trend is having an impact on independent jewelry retailer’s need to buy loose diamonds from the trade. What percentage of an average jewelry retailer’s diamond stock is now coming from the public? In 3 of 4 of our latest JIOC (Jewelry Industry Opinion Council) research studies we have conducted, we asked this very question in a few different ways. The bottom line number is about 70%. That’s big. 70% of what a jewelry retailer wants to have in stock is coming from Joe and Josephine Consumer, not the thousand diamond dealers any credit worthy retailers can contact.
But not all retailers have to pay for the stones coming into their cash for gold programs. Chain and department stores, which often use third party companies to set up their buy back programs, are not offering much or any thing for stones. In fact, to make it hard for the consumer to even find out if their stones have some value, these major retailers program are ‘mail-in only.’ This means that the consumer can order the special envelope on the retailer’s website, mail it in, receive a quote via email, accept or decline the offer. Even if the consumer walks into the chain or department store, there will be no one who has the authority or knowledge to make an offer for the jewelry. But, never the less, some consumers will still send all their gold, gold with colored stones, gold with diamonds and engagement rings to these type of retailers because they know they are a big company that has a local location if something goes wrong.
We at MVI, have been studying the impact of the inheritance diamonds issue for a while based on the aging baby boomers diamond sell off being balanced against the new market development in Asia. But now, with the acceleration of cash for gold jewelry via every retailer in the country, there is obviously less need for virgin diamonds in the market place.
When the diamond is removed from the mounting, re-polished and in many cases, re-certified, the consumer never knows the diamond’s age. Why would they care? After all, a diamond is forever. There maybe some good-will lost with this scenario. In the eyes of the consumer, purchasing a diamond older then 10 years can insure it is not a blood diamond.
Purchasing a used diamond fits right in with trends in the U.S. market already. Americans are recycling everything these days, so why not diamonds? Previously owned cars are big business.
Recycling has become a way of life for most Americans. We all want to be thought of as ‘green,’ doing our part to slow global warming, saving the earth for the next generation and of course, staying far away from blood diamonds, gold, colored stones, etc.
Most of us have drunk the cool aid. But things are getting complicated. Batteries, for instance: you are told that they cannot go into the normal recycle bin. They have to be saved and turned in at a certain location. Cell phones also, dumping them in a recycle bin is a big No No. We are being forced to think about how we dispose of everything and what are we buying new?
If I was an average diamond consumer, recycled diamonds sound pretty green to me.
