Rapaport’s Rant [aka “New Year Message”]
For those of you who have not yet read Martin Rapaport’s New Year Message, you can read the full message here.
For those who wish to cut to the chase, Rapaport feels strongly that the jewelry industry should not be selling synthetic diamonds. And these are his main points:
“The Rapaport Group does not facilitate the sale of synthetic diamonds in any way. We believe they are a fraudulent product because of how they are sold. They are also a threat to the fundamental message of diamonds. Let me make it clear: Engagement rings are not costume jewelry.”
- “The greatest challenge facing the diamond trade is greed. Our trade is willfully destroying the underlying value of diamonds as a store of value through the marketing, promotion and sale of synthetic diamonds as a replacement for natural diamonds.”
- “Synthetic, man-made, laboratory-grown diamonds (LGD) are the Bitcoin of the diamond trade. In fact, they are worse than Bitcoin because they lack any element of scarcity. The value of these diamonds is consistently falling. Despite their lack of natural scarcity, they are sold as comparable to natural diamonds without full disclosure as to their inability to retain value.”
- “Essentially, the diamond industry is trading short-term, unsustainable profits for the reputation of diamonds as a store of value. Many — if not most — in our trade are operating dishonestly and unethically by failing to make a full disclosure about the value retention of synthetic diamonds.”
There are many of us who feel that the sales talk from the manufacturers of synthetic diamond as being green, and socially responsible seems to lack the necessary proof for such claims. We need to stop talking about it and do something about it.
In the meantime, synthetic diamond, what some people call “lab grown,” “created,” “factory produced,” … it is just another product.
And it’s a pretty product, because, after all is said and done, it is diamond (albeit not completely made by mother nature.) If the consumer understands what they are buying, well then … 🤷♂️- Gary Roskin
Patrick DuFrayne, retail jeweler, graduate gemologist and appraiser, sees the challenge up close. “We sell lab grown diamonds because our clients ask for them. And when we do sell them, we are crystal clear about the limitations of lab grown diamonds; falling prices, lack of trade-in value, etc… I think there’s an obvious defensiveness in what Rapaport is saying, protecting what he has built on the natural diamond front. But maybe, we should be looking at the people – and not the product – those who are not disclosing the details of what lab grown diamonds are, and what they are not.”
John Anthony, Jr., member of the American Gem Society (AGS) and National Association of Jewelry Appraisers (NAJA), past president of the Pennsylvania Jewelers Association (PJA), and current president of the PA/Delaware Valley GIA Alumni Association (GIAAA), confronts it head on. He knows that the jewelry industry is here to sell jewelry. It’s not rocket science. “If the customer wants real, natural diamonds, then that is what we are here to sell. But today, they have a choice. A new choice. Lab Grown.
“As an independent jeweler that has a 76-year-old family business, I never thought that when I came into this with my father (50 years ago) that there would be ‘CZ’S,’ ‘Synthetic Moissanite,’ or ‘Lab Grown Diamonds.’ We had other items back then, but they came and went over time. And we will see this again. There is a market for everything, and as they say ‘water will seek its own level.’ We have seen that with Emeralds vs Synthetic Emerald, Rubies vs Synthetic Ruby, Sapphires vs Synthetic Sapphire, etc… etc… etc…
“All man-made items must and should be treated as such, and must and should be treated and valued for what they are – Man Made!”
Stuart Robertson of Gemworld International does see Martin’s point.
“In my opinion, the product stops short of being a fraud. However, Martin is quite right and should be lauded for raising concern that consumers are entering into purchases that, at this point, appear to have little to no chance of retaining value. The population of laboratory grown diamonds trading in the jewelry industry has been increasing year over year for years now, while the cost of technology and production has reportedly been decreasing. The result is apparent as the price continues to erode. LGDs are not immune to the principle of supply and demand. As long as the current cycle remains in place, it is unlikely that the price structure for lab grown diamonds will be able to gain traction, and therefore, the idea that they can serve as a vehicle for wealth preservation in the way that natural mined diamonds are perceived to be is without merit.”
And we are now hearing more sellers talking about dropping the use of the Rapaport Diamond list for pricing Lab Grown. After all, what’s the point when you are talking about a Lab Grown diamond being 90, 95, or 98% back of Rap? [See Rob Bates’ JCK feature on this subject here.]
Writing to Rapaport on behalf of the National Association of Jewelry Appraisers, Dave Atlas, Associate Director, and Chair, Ethical Issues, tells Martin that consumers are the ones making the choice, while jewelers are simply giving them the honest options. Here are some of the highlights from Atlas’ letter.
“Consumers have every right to choose to make a mined diamond investment or to buy a near worthless lab stone for far less. It is a legitimate choice for an informed consumer to make.
“There is room to be just as angry about the lies made about lab diamonds or mined diamonds. As an appraiser, I often sit in judgment of a consumer’s diamond purchase. Informed consumers are almost always happy with their purchases while consumers who have been fed lies and tall tales are far more likely to avoid future diamond purchases.
“Both lab and mined diamonds have large markets to serve and it is not wrong to sell whatever an informed consumer wants. We will get to a stable lab market at some point not so far into the future. They look superb when well cut and who is to say they are not suitable for whatever purpose the consumer selects?”