Laser Drilling of Diamonds
Q. When is a gem treatment not a treatment?
A. When it's a process.
Q. Is laser drilling of diamonds a treatment or a process?
A. Depends on whom you ask.
Q. Does the answer matter?
It matters because the real question here is: Is it necessary to disclose laser drilling to the customer and to the insurer? You already know the answer to that one is Yes.
The value of a diamond is partially based on its clarity. If a gem has an inclusion (usually of some other gem material), light hitting the inclusion reacts differently and shows up the imperfection.
Laser drilling makes a microscopic channel from the outside of the stone to the imperfection. An acid is then injected to bleach the foreign material and make it less visible. To the unaided eye — or even to an inexperienced viewer with a jeweler's loupe — the stone may appear to be of high quality, but under a microscope the drill holes are obvious.
Laser drilling is controversial even within the jewelry industry. While most ethical jewelers agree that gem treatments should be disclosed, there is disagreement over whether drilling is a treatment. Diamond cutters and dealers say that drilling is an integral part of the manufacturing process and should be considered no different from, for example, faceting or shaping the stone. Unlike fracture filling (discussed in the April issue of IM NEWS), which actually fills a fracture with a foreign material, laser drilling does not add anything to the stone. Dealers say it is merely a process that improves the gem's appearance.
The FTC was persuaded by dealers' arguments that since all diamonds are put through an acid wash for external cleaning, acid injection is no different. And since lasers are used to cut gems, laser drilling is no different. Even the Gemological Institute of America, which sets grading standards around the world, seems to support this view. The GIA does not grade gems it classifies as "treated," but it does grade laser-drilled diamonds. Retailers are appealing the FTC decision because they do not want to pay as much for laser-drilled stones as for undrilled ones. The retailers want the FTC decision amended to say that laser drilling must be disclosed.
As it is, many jewelers refuse to carry diamonds that have been laser drilled, because they consider lasering to be a treatment done to conceal a flaw. They point out that unless the drilling is disclosed all through the selling chain, the consumer may wind up paying very unfair prices. Many jewelers who do sell laser-drilled stones are against mandatory disclosure because they fear customers will think they are buying an inferior gem (which they are). They prefer to just sell a beautiful-looking stone (beautiful to the naked eye) and remain silent about how it got that way.
FOR AGENTS & UNDERWRITING
A drilled stone is worth less than an undrilled gem with the same appearance, so disclosure is crucial. However, not all retailers have the lab equipment and training necessary to detect laser drilling, not all retailers believe they need to disclose lasering, and some may not even know that what they're selling are laser-drilled stones. Your best move is to insist on an ACORD >78/79 appraisal. Since laser drilling is not one of the treatments usually or always used on diamonds, Certified Insurance Appraisers™ believe it must be disclosed. The CIA™ who prepares an ACORD appraisal warrants that the jewelry has been examined in a gem lab and that the appraisal contains full disclosure of treatments.
For a claim on a damaged diamond, have the stone examined by a CIA™ in a gem lab. If the original stone was laser drilled, it can be replaced with a laser-drilled diamond, thus reducing loss costs.
By the same token, if you are ordering a replacement for an undrilled diamond, require the jeweler to guarantee that the replacement stone you are given has not been laser drilled and to include a full description of the gem's qualities and proportions.
From Steve Dagle, CIA™
When a customer brings in a diamond for work to be done, perhaps resetting it, we always plot the diamond — prepare a map of the stone, showing any inclusions, cloudiness, or other unusual features. Since these features uniquely identify the diamond, this procedure protects both the customer and us. When our examination reveals drill holes, it usually turns out that the customer was not aware the stone had been laser drilled. Currently, the FTC does not require disclosure of laser drilling, so sellers are not obligated to tell, but I believe the customer should be informed.
We sometimes carry laser-drilled diamonds in the store, to show what's available. Usually, after we explain what laser drilling is and why it is done, the customer isn't interested in buying such a stone.
John Dagle Jewelers
352 Market Street
Sunbury PA 17801
A Diploma Is Not a Credential
The Gemological Institute of America now offers a training program for jewelers leading to an Accredited Jewelry Professional (AJP) diploma. You may begin seeing the letters AJP after an appraiser's name. Do not assume that this title represents gemological knowledge or appraisal expertise. As stated in the GIA's own advertising, this course is designed to help sales associates improve their retail knowledge and sales presentation.
The issue of jeweler/appraiser qualifications is discussed in the March IM NEWS. As we pointed out there, a jeweler who is a Certified Insurance Appraiser™ (CIA™) best serves the needs of both insurers and policyholders.
©2000-2017, JCRS Inland Marine Solutions, Inc. All Rights Reserved. www.jcrs.com
Become a Certified Insurance Appraiser™ and be a Preferred Provider of appraisals for insurers and consumers.