The Difference One Decimal Can Make
August 20, 09“A calculation on the back of an envelope will show that every year the worldwide diamond industry loses approximately $100-$135 million because of the (highly unjustified) practice of gemological l
Every third decimal point that weighs less than 0.009 is rounded downwards. If you have a $3,000 p/c stone that weighs 0.505 carat, the GIA’s or any other certificate will say it weighs 0.50 carat. In this instance the seller loses $15 since in fact, the true price for the stone should be $1,515. The seller is losing almost 1 percent of the value!” These observations were made by International Diamond Manufacturers Association (IDMA) President, Moti Ganz, in an editorial scheduled for publication in the next issue of Yahalom magazine.
Ganz realizes that this is not a new issue – the noted German diamond grading authority Dr. Godehard Lenzen already wrote
Incidentally, CIBJO has a similar rule: “The weight of the diamond is always expressed in carats (international
The German gemologist gave a practical but rather disturbing example: weighing results of 0.991 ct, 0.992 ct, 0.993 ct, 0.994 ct, 0.995 ct, 0.996 ct, 0.997 ct and 0.998 ct are without exception rounded down to 0.99 carat for gemological certificate purposes, while only the result 0.999 ct is rounded up to 1.00 ct.
“So while statistically we may be losing something in the range of 0.5%-1% because of the grading rules, in fact, it is much more. There is a price jump between a figure below and above one carat,” says Ganz. He finds it amazing that in 30 years, nobody has raised this issue in a serious manner.
Conflict with Federal Trade Commission Rules?
Just because CIBJO, IDC, etc. set a rule, that doesn’t mean that all gemological l
What is interesting is what the U.S. Federal Trade Commission has to say about the issue. It doesn’t comment on individual laboratories. In its guide to the public, it writes, “If the weight is given in decimal parts of a carat, the figure should be accurate to the last decimal place. For example, ‘0.30 carat’ could represent a diamond that weighs between 0.295 - 0.304 carat.” On a certificate the 0.295 carat, 0.296 carat, 0.297 carat and 0.298 carat would be rounded down to 0.29 carat. It seems unreason
The FTC also notes that “if diamond weight is stated as fractional parts of a carat, the retailer should disclose two things: that the weight is not exact, and the reason
The FTC is concerned with truth in marketing, with avoiding deceptions, with protecting the consumers. Its rules were not necessarily designed to obligate l
But the industry must come to terms with the fact that marketing practices today are vastly different from a few decades ago. Much of the business (and all of the electronic trade) is based on certificates.
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The IDMA president announced his intention to re-open the debate. It must be recognized that, in fact, it is only getting worse. When one sells
In terms of money, diamond traders pay l
Maybe these costs are unavoid
“As they HAVE and RECORD the third figure after the decimal point anyway, why not put it on the certificate? Just because CIBJO, IDC etc., say that two figures are enough? In whose interest are these organizations working?” Ganz wonders.
If anyone doubts the arithmetic, just take some 25 certified stones and put them together in one parcel at a scale. The total weight will be anywhere between 0.8 percent-5 percent more than the sum of the individual weight figures appearing on the certificates. Especially in cheaper goods, the differences become substantial.
“This is money we are simply throwing away – for no justifi
He might well have opened a Pandora’s Box. Pandora, the first created woman in Greek mythology, had been given a large jar and instruction by Zeus to keep it closed. However, she had also been given the gift of curiosity, and ultimately opened it. When she opened it, all of the evils, ills, diseases, and burdensome l