In previous blog articles, NADB has listed the numerous reasons for exclusively selling GIA and AGS certified diamonds. We covered some of the major differences between GIA and EGL graded diamonds and highlighted some of the egregious overgrading practices conducted by several of EGL’s labs worldwide and the ways in which it delegitimizes the industry as a whole.
Recently, Martin Rapaport of RapNet – the largest online diamond trading network – has announced that EGL graded diamonds will no longer be listed on RapNet. In a special report published in his own self-titled magazine, as well as diamonds.net, he lists astonishing evidence for why he has made this decision. Here is a list of changes to the way RapNet will operate and what they mean to the industry at large.
1. Same Language, Different Standards
The GIA created its grading system and standards in the 1950s, and since then most labs have adopted this language. However, many labs use the language but apply different standards. Diamonds graded by EGL have been removed from RapNet because they do not apply the same standards. Thus, Martin Rapaport has declared to all gem labs that if they use the terminology, they have to use the standard.
2. Honest Grading Is Not An Option
If a retailer sells an overgraded diamond, he/she must be prepared to give a full refund for the diamond if the consumer so wishes. Many retailers have decided to confuse customers with poorly graded diamonds when they can’t beat the price that a customer wants. This fraudulent activity has led to over one billion dollars worth of overgraded diamonds currently out on the market. Retailers who refuse to refund the consumer’s money can take their case to court, but they risk paying triple the price for the diamond.
3. Unlevel Playing Field
Many retailers choose to do the ethical thing and educate their customers when they are unable to sell the diamond that the customer wants for the price the customer can pay. However, if the ethical retailer’s competitor opts to confuse the consumer by selling an overgraded diamond at a much lower price, then the ethical retailer is being punished, creating an unlevel playing field that encourages fraudulence.
4. Confusion Is Not Acceptable
Most of the general population is unaware that there are several EGL labs around the world, each of them carrying a different standard in grading. Some of the labs are more strict, and therefore more legitimate than others, and the others benefit from the proxy. This creates confusion and lends itself to very misleading business. So, although all EGL’s are not created equal, they are all being treated the same way due to their refusal to implement industry standards.
5. SI3 Clarity
Lastly, although GIA reports do not currently include the SI3 clarity grading, many in the industry believe that this intermediate grade between SI2 and I1 is an important distinction. Not only is there a huge price difference between SI2 and I1, but many diamonds are “eye clean” and yet under 10x magnification one can see that they are not quite SI2 quality. For this reason, diamonds listed on RapNet can still include an SI3 grading, however, if an SI3 graded diamond is sent to GIA and is given an I2 grading, it is considered overgraded.