When Blue Nile sued Yehuda Diamonds in February this year for “misleading statements” on its web site comparing Yehuda clarity-enhanced diamonds to diamonds sold by Blue Nile, it started a chain of events in motion that may end up damaging the emerald market. How could an ongoing online diamond language dispute end up hurting emeralds? Does this gorgeous green gem just have bad karma?
In November, Yehuda Diamonds got its revenge at Blue Nile, filing suit against the online jewelry retailer (and sending out a press release today) claiming that it sold emerald jewelry to consumers without disclosing that the emeralds are enhanced. The Yehuda suit says that disclosure is required by FTC guidelines: “Such filled emeralds are far less valuable than non-enhanced emeralds, rely on an enhancement process that is not permanent, and typically require special care when cleaning, facts that Blue Nile did not disclose to its customers.”
That language is important because the FTC guides require disclosure of gemstone enhancement when the treatment is not permanent and requires special care. Retailers are also required to provide information about the special care needed. Although disclosure of gem enhancement is obviously a good idea in all cases, application of the language of the FTC guides is a bit more fuzzy. Take heating for example. Arguably the guides do not require disclosure of heat because it is general practice, permanent, and does not require special care.
Are enhanced emeralds “far less valuable” than non-enhanced emeralds as Yehuda claims in the suit or are non-enhanced emeralds the exception? Emeralds have always been odd man out when it comes to treatment. Emeralds treated with traditional natural volatile oils, which slowly evaporate, have long been considered more prestigious and valuable than emeralds filled with permanent epoxy resin fillers. Gem labs, however, generally don’t identify the fillers present in an emerald but only the amount of filling present.
Included as an exhibit in the complaint against Blue Nile are copies of Gemological Institute of America reports confirming that emeralds sold in September 2008 by Blue Nile have “moderate clarity enhancement.”
The suit asks the court to order Blue Nile to “cease making false and misleading statements and to offer a full and complete refund to any consumers who wish to return emeralds or emerald jewelry items purchased from Blue Nile.”
“The process of enhancing an emerald or a diamond is a common trade practice used by jewelers to provide consumers comparable gems at a more attractive price,” says Dror Yehuda, president of Yehuda Diamonds. “The issue arises when retailers, such as Blue Nile, fail to adequately inform their customers that the gems or jewelry items they are purchasing have been treated.”
Yehuda told National Jeweler that even though his company doesn’t sell emeralds, he views all pieces of jewelry as competing with each other. “Blue Nile is competing with me on the online business of jewelry,” he said, adding that he is demanding a jury trial in the case. (Although one imagines he might be a bit more flexible if Blue Nile were to make that other lawsuit go away, hmm?)
Blue Nile’s web site now includes language on emerald enhancement. But it’s not on the product page, it’s buried in the education section so I don’t get the sense that they are running scared. And Blue Nile isn’t very serious about colored gemstones anyway: they don’t even provide carat weight for emeralds or other gems, just the millimeter size, which is kind of weird, especially since the carat weight of side diamonds and diamond pave are given.
What does your website say about gem enhancement and gem care? If you sell online, it’s definitely time to take a look at all the fine print.