Diamonds: The great American rip off!!!!
Posted: Sat Feb 12, 2011 2:58 pmI know this isn't the right forum for this rant but as collectors/investors some of you might find it interesting.
My granddaughter was recently engaged and she and her fiancee went to the local Jewelry store who advertises on tv that they "eliminate he middle-man and import their diamonds directly from overseas wholesellers and pass the savings on to their customers". So they pick out a nice engagement set that is (on sale mind you) for $3,499 marked down from $3,999. With sales tax it comes to $3825. They pay 50% down and finance the balance. Unfortunately the engagement crumbles after six months and the fiancee, who was caught cheating, tells my granddaughter to just keep the ring thinking this would be a nice concessionary offer. My granddaughter of course decides to take the ring back to the jeweler with the assumption that since they paid half down she will being able to sell the set back to them, get the entire 50% down payment back and hopefully there will be a little left over for her trouble.
To her amazement the jeweler only offers her $500 total for the engagement set and says he will subtract the $500 from the balance owed which has grown to almost $2000 because of interest. So all in all he was graciously willing to take the engagement set back, keep the $1900 down payment, and my granddaughter would still owe him over $1500 with accruing interest.
So my distraught granddaughter comes to me and asks what to do. We decide to take the set to every jeweler and pawn shop in town to get the best price. We don't tell them where we bought it or what we paid for it so this way nothing would influence or prejudice their offers. The lowest offer was $250 from a pawn shop and the highest was $550--also from a high-end pawn shop. And what was enlightening was that a jewelry store at the mall told us they didn't want to offend us but the diamonds were of such low quality that they couldn't make us an offer because they won't sell such diamonds in their store as it was disrespectful to their customers. In fact they said the diamonds were just one grade above industrial diamonds which are used in blades for cutting concrete, etc. Unbelievable
Another jeweler told us he could make the same set in his store for $475.
Another interesting thing I learned came from a pawn shop owner who said he used to be in the import business. He said the #1 marked up item sold in America is diamonds; followed by clothes, then furniture and mattresses. He said mattress makers are really "criminal" in what they do. He said when constructing a mattress they will add just one $10 sheet of foam padding and then add $100 to the price of the mattress. Or they will "upgrade" the mattress and throw in a second $10 sheet of styrofoam padding, give the mattress a different model name and then increase the price of the mattress yet another $100. He told us that diamonds in the form of retail jewely is the biggest retail scam ever perpetrated on the American public!
After all was said and done I told my daughter next time just to buy some 90% junk silver at the local coin shop--at least that way she could get most of her money back if she needed to sell.
Edited for math error.
My granddaughter was recently engaged and she and her fiancee went to the local Jewelry store who advertises on tv that they "eliminate he middle-man and import their diamonds directly from overseas wholesellers and pass the savings on to their customers". So they pick out a nice engagement set that is (on sale mind you) for $3,499 marked down from $3,999. With sales tax it comes to $3825. They pay 50% down and finance the balance. Unfortunately the engagement crumbles after six months and the fiancee, who was caught cheating, tells my granddaughter to just keep the ring thinking this would be a nice concessionary offer. My granddaughter of course decides to take the ring back to the jeweler with the assumption that since they paid half down she will being able to sell the set back to them, get the entire 50% down payment back and hopefully there will be a little left over for her trouble.
To her amazement the jeweler only offers her $500 total for the engagement set and says he will subtract the $500 from the balance owed which has grown to almost $2000 because of interest. So all in all he was graciously willing to take the engagement set back, keep the $1900 down payment, and my granddaughter would still owe him over $1500 with accruing interest.
So my distraught granddaughter comes to me and asks what to do. We decide to take the set to every jeweler and pawn shop in town to get the best price. We don't tell them where we bought it or what we paid for it so this way nothing would influence or prejudice their offers. The lowest offer was $250 from a pawn shop and the highest was $550--also from a high-end pawn shop. And what was enlightening was that a jewelry store at the mall told us they didn't want to offend us but the diamonds were of such low quality that they couldn't make us an offer because they won't sell such diamonds in their store as it was disrespectful to their customers. In fact they said the diamonds were just one grade above industrial diamonds which are used in blades for cutting concrete, etc. Unbelievable
Another jeweler told us he could make the same set in his store for $475.Another interesting thing I learned came from a pawn shop owner who said he used to be in the import business. He said the #1 marked up item sold in America is diamonds; followed by clothes, then furniture and mattresses. He said mattress makers are really "criminal" in what they do. He said when constructing a mattress they will add just one $10 sheet of foam padding and then add $100 to the price of the mattress. Or they will "upgrade" the mattress and throw in a second $10 sheet of styrofoam padding, give the mattress a different model name and then increase the price of the mattress yet another $100. He told us that diamonds in the form of retail jewely is the biggest retail scam ever perpetrated on the American public!
After all was said and done I told my daughter next time just to buy some 90% junk silver at the local coin shop--at least that way she could get most of her money back if she needed to sell.
Edited for math error.
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