New York Times: 'Diamond Sales Down to a Trickle Over Fraud Allegations'

Imagine the following: you open the newspaper and read that the local supermarket is selling tofu as meat; you turn on the evening news on TV and hear that for some time gas stations have been diluting their fuel with other liquids; you find out that a friend you trusted has been lying to you for years on issues of importance. What is the chance you will buy meat at that supermarket again? Will you refuel at those gas stations or trust that friend again?

The Case of Trust

Many people like tofu, have no problem with the fuel as long as their car drives well and will forgive a friend for their weaknesses, but if you had a choice, what would you choose? Clearly, if you wanted to buy tofu, you would prefer paying tofu prices, and if its meat you prefer, you would like to know you have meat – and not anything else – in your shopping basket.

Lab-made diamonds are fine. Really. They have their niche and they will enjoy a growing market share in the future. The issue is when a consumer walks into a store and is told they are buying natural diamonds, they should receive a natural diamond. With lab-made selling at a quarter of the price of a natural diamond, you don't want to step out of the store thinking you bought natural, paid the price for a natural stone, but have something else set in your brand new piece of jewelry.

Consumers do have a choice, and they will choose whenever they can. Their loyalty is short-lived and based on trust. Betray that trust and they will desert the betrayer.

You may think to yourself that this is less of an ethical issue than conflict diamonds, and that did not bring down sales. Not so. Consumers think about themselves first. A chopped-off hand 15 years ago in Sierra Leone was terrible, but it happened to someone else. When a consumer is cheated, then it becomes personal. Deception is not worse then bodily harm in the pages of the book of ethics, but in the trenches of retail, the order of the pack is different. It is “Me first, then the rest.”

There Is What To Do

The diamond industry at large can do plenty besides acting ethically. Right now (to the best of my knowledge) no official in-depth investigation is taking place to track, expose and punish the perpetrators of the recent undisclosed 600 lab-made diamonds identified by IGI. Someone bought the rough knowing exactly what it was. The manufacturer should have known too – lab-made diamonds act differently in polishing. Whoever they are, they knew what they were doing.

The diamond industry's leadership can and is willing to pursue this issue, but it needs to know that it has the backing of its constituency.

In Antwerp, Mumbai, Ramat Gan and New York City, the trade must speak up and strongly urge the heads of the local industry umbrella organizations, exchanges and manufacturing associations to not let go, to regularly remind them that the very oxygen that the diamond industry breathes, the consumer's hard-earned money, could flee in other directions at any time – if the industry does not act now.

Call, email or stop elected industry officials and ask: "What are we doing today to bring the wrong doers to court?"