What Store Managers Must Know About Fractured-Filled Diamonds

More than ever before, today’s jewelry store manager has to be a know-it-all. He or she must understand new technology and new retailing strategies in order to direct buying and selling, merchandising, repair, custom design, hiring and a dozen other tasks. Yet rarely does any single source offer information and guidance. This new JCK series is designed to help fill the gap.

The goal is to take a single development that affects every job in the store and offer guidance on what the staff needs to know to make it work. The first choice: fracture-filled diamonds.

Fracture filling of diamonds, and other gemstones, has been around for a while now. But, as a number of TV programs have revealed, jewelry store employees from salespeople to benchworkers often still don’t know just what the technique involves, how to work with a fracture-filled stone, how to sell one and what to tell the customer about it. In most cases, employees turn to their store manager for help.

This report defines the product and discusses every aspect of operations affected from the moment it enters the store until it leaves again. It tells the manager the minimum knowledge each employee who handles the product must have. A fracture-filled stone may be bought for inventory, come in as part of a piece of jewelry needing repair or – an increasing possibility – appear without anyone’s knowledge because it was judged to be “just another diamond.”

This last point is critical. Some stores swear they’ll never touch a fracture-filled diamond – a legitimate business philosophy, but one that’s upended when the product comes in without anyone knowing, most often because of lax take-in procedures or careless buying.

Let’s start at the beginning.

What are fracture-filled diamonds?

Fracture filling, also called clarity enhancement, improves the appearance of lower-clarity diamonds (most are I1-I3) and makes them more salable.

The process uses a glass-like material containing bismuth, which adds virtually no weight to the diamond. Its R.I.(refractive index, or the speed at which light enters and leaves a transparent material, such as a gemstone) and other optical qualities are almost the same as that of a diamond (2.417).

The diamond and material are put together, in a vacuum, in a container. There, using great heat and high pressure, the material is infused, or sucked, into a low-clarity diamond’s internal fractures, also called “cleavages” or “feathers.” (Strictly speaking, the material doesn’t “fill” the fractures, but coats their inside surfaces.)

The result: the apparent clarity of the diamond is improved one to two grades because the infused material’s R.I. and optical qualities mask the fractures from view by the naked eye. (The fractures are still there; the process conceals, but does not heal, the cracks.) It’s interesting to note that while the process can improve a stone’s clarity, it probably will reduce the gem’s color by a half to two full grades.

The process isn’t permanent; it can be reversed by exposure to very high heat (1500°), boiling in acid, recutting or even prolonged exposure to ultraviolet light, which can discolor the filling.

To be effective, filling must be inside a very narrow break. It won’t work with cavities, drill holes or fractures with wide openings. If a fracture is just slightly too wide, the fillings will look like a “flow” and there will be no flash effect – the built-in signature of any fracture-filled diamond.

Most loose fracture-filled diamonds range in size from 0.33 ct. to 9 cts., with the great majority in the 0.50-ct. to 1.00-ct. range. However, fracture-filled melee as small as .01 ct. is also on the market and in jewelry. Many tennis bracelets contain dozens of 0.05-ct. to 0.10-ct. fracture-filled melee.

Why should fracture-filled diamonds concern me?

Fracture filling of diamonds is a controversial gem treatment because:

• It affects a diamond’s appearance, appraisal and handling.
• It is difficult to detect.
• It is widely used.
• Fracture filling, like other gem treatments, has its supporters and opponents. The process was developed more than 15 years ago in Israel by Yehuda Diamond Co. (Diascience Corp.) and diamonds treated in this way have been available commercially for more than a decade. The treatment is becoming increasingly sophisticated and difficult to detect.

Yehuda produces and sells 80% of all fracture-filled diamonds in the U.S. However, there are several other producers in the U.S. and overseas, using a variety of processes – all trade secrets – of varying sophistication, materials and stability. A new and potentially troublesome development is the growing use of fracture filling with laser-drilled diamonds.

Sales of these diamonds, while small (well under 5% of the total), are growing. Today, hundreds of thousands of them are in the market, with their most popular use in diamond stud earrings, followed by bridal sets or pendants. Many tennis bracelets now use filled melee.

These treated gems are a fact of industry life. Even jewelry stores which choose not to sell them will find them turning up for appraisal, repair, cleaning or repurchase. That’s why store managers and staff must be aware of what they are and how to handle them.

Should a store carry these stones?

A mission statement

Whether or not your store sells fracture-filled gems and jewelry should be a carefully thought-out decision, based on your customers’ needs and wishes and the image you want to project.

There are valid reasons for selling the product. The main one is that you can offer more bang for the buck, meaning you can sell a customer a prized 1-ct. diamond for significantly less cash than he or she would pay for an untreated stone of like quality.

There also are valid reasons not to sell fracture-filled jewelry or accept it for repair or appraisal. Here the main issue probably is that selling a diamond with a non-permanent treatment and one so flawed that it needs treatment does not fit your business philosophy. You feel that your customers want and deserve something better.

The important thing is to decide up front whether or not your store will handle such goods. Once the decision is made, it should be spelled out as part of your mission statement. Your staff should be fully aware of this store policy and be able to explain it to customers.

Business ethics

Any store that decides to sell fracture-filled diamond jewelry faces a basic ethical issue: what to disclose to customers about the filling and how to do so. It’s an ethical – and legal – given that the store must disclose that the diamond is treated in ads and displays, in sales presentations and/or if the customer asks.

The customer must be told what clarity enhancement is, that it is reversible and that it increases the beauty, but not the quality, of the gemstone.

Beyond simple disclosure, say sellers and suppliers of clarity-enhanced diamonds, a jeweler must ensure that the buyer clearly understands how to care for and handle such jewelry. This includes remedies in case the filling is accidentally removed.

A clarity-enhanced diamond should not be priced the same as an untreated diamond whose clarity it equals (assuming all other natural characteristics are the same).

Full disclosure of treatment may go beyond telling the buyer what’s been done to the diamond in question. Some jewelers who won’t carry clarity-enhanced gems say those who do have an ethical obligation to third parties beyond the buyer – such as gift recipients and bench jewelers or appraisers who handle the jewelry in the future. They say the seller should provide clear identification of fracture-filled jewelry (such as a tag or a stamp inside the shank) and information on its care and handling (via brochures and wallet cards). Otherwise, they claim, misrepresentation and mishandling could harm those third parties, as well as the reputation of the retail jewelry industry as whole. Until clarity-enhanced diamonds are easy for anyone to identify, those ethical issues remain, they say.

Honesty has its upside: the more information a store freely provides, the happier a customer is with a stone or piece of jewelry that he or she buys.

Training: the minimum ‘must know’

The basic facts about the sale, care and handling of fracture-filled diamonds should be taught to all members of a store’s staff. This includes salespeople, bench people, office staff (who often help handle take-in, sales and repaired jewelry) and part-timers. It’s critical to bring new employees up to speed quickly. All employees should understand clarity enhancement and be able to explain the process to a customer succinctly.

Technically, they should know that:

• Most diamonds have fractures in them, though high-clarity diamonds (VS and above) have very few and these are tiny.
• It’s possible to improve the appearance of diamonds with low clarity, which have more and larger fractures, with an infused glass-like material which coats and masks those fractures.
• The treatment is reversible.
• The “flash effect,” which they should learn how to spot using a loupe or gem microscope, will help detect filling.

A “flash effect” is the built-in signature of any fracture-filled diamond and the easiest way to detect clarity enhancement. (Other signs of filling include flattened gas bubbles, a “flow” around fracture or what looks like a web of cracks, but the flash effect is the most common and easily detectable.)

To find it, hold the diamond by its girdle with a pair of tweezers, table up, under at least a 10x loupe with darkfield or direct lighting, or under a high-power gem microscope.

Tilt the gem carefully back and forth. Look at every facet (58 in a standard brilliant cut) perpendicular to the surface. A fracture must reach the surface to be filled and looking perpendicular at a facet enables the viewer to see those fractures which do. Look down the fracture, parallel to the break. If it is filled, there will be a flash of color from the fracture. The colors you might see include yellow, yellow/green or orange (against a light background) and purple, pink or blue (against a dark background).

Diamond fractures also have natural iridescence, which may be confused with color flashes. However, it doesn’t have a quick, vivid “flash.” The key is to look down the fracture for filled color flashes and broadside at a fracture for iridescence.

For selling, they should know that:

• Fracture filling is a process which injects a glass-like material into the stone, making fractures invisible to the naked eye.
• Fracture filling significantly improves the appearance of a diamond. This enables a customer to buy the “look” of a more expensive diamond for the cost of a less-expensive, clarity-enhanced stone.
• Fracture-filled diamonds need special handling.
• If the filling is damaged or comes out, it can be replaced.

Excellent training aids about fracture-filled diamonds are available from the Gemological Institute of America (including videos, charts and sample gems) and Yehuda Diamond Co., the leading supplier of clarity-enhanced diamonds (including free videos, loans of sample gems, wallet cards and other materials).

Samples of fracture-filled diamonds should be kept on hand for instruction and reference for both staff and benchpeople.

Human resources: today’s needs

The increasing number, variety and sophistication of synthetics and gemstone treatments make it vital that every jewelry store have at least one trained gemologist to identify and grade gemstones. Lack of training or inexperience can cause a store to miss or misidentify fracture filling in gems.

Bench people should be thoroughly trained and take periodic refresher courses in identifying, grading and handling treated gems.

Those who take in diamond jewelry for bench work or resale ideally should have gemological training or at least experience in handling, grading and identifying gems. Anyone doing appraisal work should have gemological and appraisal training. Inexperienced, part-time or new employees should not be put at take-in unless they have an experienced person to assist them.

Buying from suppliers

If you sell clarity-enhanced jewelry, insist that your suppliers clearly and appropriately label all treated gems and jewelry. Merchandise should be tagged properly and securely, and come with information on care and handling that the store can use and pass on to customers.

It’s also reasonable to ask your supplier to mark finished jewelry in an unobtrusive way (such as inside the shank) so that others (gift recipients, other jewelers who do repair or sizing) will know it contains treated gems which require proper handling and care in the future.

Vendors can also provide valuable materials on fracture-filled jewelry for staff training and customers.

Price obviously is a very important part of any purchase. A good rule-of-thumb in buying a fracture-filled diamond is to offer a price that reflects the quality of the stone before treatment. Thus if it originally had an I2 grade and, after filling, is now an SI2, you should expect to pay for the I2 grade – with perhaps an extra $100 or so to cover the cost of the treatment.

If your store doesn’t sell fracture-filled gems or jewelry, insist that your suppliers guarantee on invoices or in separate written statements that they won’t intentionally sell you treated gems and that the merchandise they ship you doesn’t contain them. If your inventory is found to contain such gems or jewelry from them, they should agree to accept it back immediately and make good on any costs. Ask that they make the same request of their suppliers.

In an area so fraught with possible legal or PR problems, simple verbal assurance isn’t enough.

Taking in from customers

Whether or not a store sells fracture-filled jewelry, sooner or later some will be brought in for repair, cleaning, appraisal or resale. The following recommendations apply to all of these take-in situations.

Ideally, all take-ins should be handled by staff people with gemological and/or appraisal training or at least by experienced store veterans. If that isn’t possible, make sure that anyone in your store who will take in, clean, polish, repair, appraise, sell or handle a piece of diamond jewelry knows what fracture-filled diamonds are and how to check for them. The take-in counter is not the place to start part-timers or inexperienced newcomers.

Assume that all diamond jewelry is fracture-filled and examine every piece at take-in – even those brought in for cleaning – for the “flash effect” of fracture filling (see “training”). Also be sure to check that a diamond really is a diamond, not CZ or a synthetic.

Some fracture-filled jewelry might have an identifying mark or stamp inside the shank.

Clean diamonds with a gem cloth or a soapy water solution to remove dirt before examining them.

Have the proper examination equipment at the counter. A 10x loupe is a minimum requirement. However, it’s possible to overlook or even misidentify fracture filling in smaller stones with a low-power loupe. So, most experts strongly recommend having a high-power binocular gemological microscope with pinpoint fiber optics or high-intensity directional lighting at the counter to spot hard-to-find fracture fillings in gems and mounted jewelry.

Do all take-in procedures at the counter in front of the client. This prevents later misunderstanding or false claims of switching and lets you question a client about the jewelry, as needed. Ask if the gems in jewelry were treated in any way, whether the original seller or gift-giver provided any special handling instructions, and about the recent sales history of the jewelry or stones. This information affects how the jewelry is handled at the bench, while appraising or when labeling for resale.

If the take-in examination detects fracture filling, immediately inform the customer and, if possible, show (via loupe, microscope, instant photo or video) what you’ve discovered. Explain the clarity-enhancement process, how it will affect the appraisal, repair, cleaning or resale of the diamond and ask if the client wants to proceed. (You need permission to do so.) If the enhancement is found later, during appraisal or repair, immediately contact the customer and ask how he or she wants to proceed.

When in doubt as to whether or not there is enhancement, send the stone or jewelry to an accredited gemological laboratory. Most won’t appraise or grade fracture-filled diamonds because their clarity grade is unreliable. However, they do provide reports stating if the stones were clarity-enhanced.

Findings, including basic facts about the gems and jewelry and any peculiarities, should be noted on the take-in receipt or a three-part take-in envelope. Put down as much information as possible.

The customer should sign the slip to indicate he or she has been told what was found and agrees with the work to be done. This protects both the store and the client. The customer gets one copy. A copy is kept for the store file and a third copy goes with the envelope for reference by anyone who must handle it.

Put take-in procedures on a checklist to be reviewed and signed by the client to show he or she has been informed about and understands them. The repair envelope, receipt form or checklist should also include disclaimers waiving the store from responsibility for damage to a fracture-filled gem during repair, appraisal or cleaning, if that treatment wasn’t known in advance. (However, state laws vary on the effectiveness of such a disclaimer, so check with the store’s attorney.)

Some experts also recommend posting a sign or notice in the take-in area which says it is the responsibility of clients to notify the jeweler if gemstones they bring in are artificially enhanced in any way, since these processes can be reversed, damaged or affected during cleaning, repair, polishing or alteration.

Of course, you don’t have to accept fracture-filled jewelry for repair, cleaning or appraisal. Many stores don’t. However, you should be ready to give the customer a reason, verbally or in a brochure or sign.

Sales: meeting a market demand

Be positive, not apologetic about selling fracture-filled diamonds. After all, if you are honest and open about its treatment, clarity-enhanced diamonds provide real benefits for the appropriate customer.

Offer this jewelry as an alternative to more expensive merchandise. Explain clearly that diamonds have fractures, but that fracture filling is a remarkable process which makes them invisible to the eye and gives the gem a clean, sparkling appearance. In effect, the customer is able to get the look of a larger, more beautiful diamond for less money. One sales technique: show the customer both a filled and an untreated diamond and let him or her weigh appearance against price in making a decision.

Present the facts about fracture filling in an impartial, non-judgmental manner. Don’t play any word games or make false claims for clarity enhancement. Tell the customer the filling conceals the fracture; it doesn’t heal it. (It may be worth noting that fracture filling isn’t unusual, nor limited to diamonds; many emeralds and rubies also are fracture-filled.)

Tell the client the treatment can be reversed. Also explain that if anything happens to the filling, it can be repaired easily by the supplier, often at no charge.

Give the customer wallet cards, brochures or even videos-on-loan (available from suppliers) which clearly explain the treatment, care and handling of clarity-enhanced diamond jewelry. Many suppliers will provide these as well as in-store displays.

Financial matters: how to price

Fracture filling a low-clarity diamond makes it more salable, by giving it the look of a more expensive gem. Sellers of clarity-enhanced diamonds suggest a markup of 25% to 30% over the price of the stone without enhancement. Thus a diamond valued at $2,000 and enhanced to look like one selling for $4,500 could be priced to sell, with enhancement, at $2,500.

Marketing & PR: spreading the word

If a store sells fracture-filled jewelry and carries it in inventory, it should be promoted and marketed as energetically as any other merchandise. Most suppliers have ready-made advertising and promotional material, which can be tagged with the store’s name. In-store events also are possible.

Be sure that any ads for specific pieces of jewelry disclose that they contain fracture-filled diamonds and that the treatment is reversible.

Many suppliers provide in-store displays and materials for customers, such as wallet cards, guarantees and videos-for-loan. These explain the treatment, care and handling of clarity-enhanced diamonds and diamond jewelry in clear, unambiguous language.

Be prepared for questions from your local TV, radio and newspapers about fracture filling, regardless of whether your store sells clarity-enhanced diamonds. There have been several recent TV and print investigations, both national and local, of fracture-filled gems and their sale by jewelers. To be able to handle reporters’ questions well, the store manager and staff should know what fracture filling is, how it affects a stone’s appearance and how it can be repaired, if necessary. Explain what fracture filling is and its benefits (appearance and price) for customers.

Bench work: beware unpleasant surprises

Before starting any project, a bench worker should examine any diamonds or jewelry for fracture filling if this wasn’t done at take-in. Look for the “flash effect.”

Though it is more difficult to spot fracture filling in mounted jewelry, don’t remove the gem from the setting, open, clean or do other testing of jewelry without first contacting the client and getting his or her permission to do so.

Don’t subject a fracture-filled loose or mounted diamond to high heat (from a torch), boiling in acid, recutting or repolishing, say the experts. In addition, some suppliers’ fracture-filled diamonds can be damaged by prolonged exposure to ultrasonic cleaning (which can crack the internal enhancement material) or even to ultraviolet light, including sunlight, which can affect the filling’s color.

Remember, however, that fracture-filled diamonds are repairable. Yehuda, the major seller of such gems, has an unconditional guarantee to restore the enhancement not only of its own gems but also those of any fracture-filled diamond.

Inventory management: assume the worst

Even stores which don’t sell fracture-filled diamonds should periodically inspect inventory thoroughly to ensure none were inadvertently mixed in with merchandise from suppliers. This happens to even the most famous retail jewelers, as news reports repeatedly indicate. The staff should be familiar with the tell-tale signs of fracture-filled jewelry and what to do if any is found in stock.

Legalities & security: potential minefield

Fracture-filled gems can be a minefield of legal liabilities and PR nightmares for a jewelry staff that is uninformed or simply careless.

The Federal Trade Commission says in Sec. 23.1 and 23.13 of its revised guides for the jewelry industry (approved 1996) that:

1. any treatment of a diamond, including fracture filling, must be disclosed by the seller, and
2. the buyer must be told the treatment is reversible.

Disclosure must be “clear and prominent,” not only verbally, but also in any solicitation (i.e., catalogs or on-line services) or televised marketing.

Failure to disclose, says the FTC, is a “deceptive and unfair” trade practice and can result in prosecution.

Don’t take that warning lightly. The FTC guides are the agency’s official interpretation of federal laws and regulations. It has the power to enforce the guides with civil and criminal penalties. In addition, a number of states incorporate the FTC guides into their own laws for consumer protection against deceptive and unfair trade practices. Violation can bring charges of negligence or fraud, and even lead to a jail sentence.

A jewelry store also faces problems if it is complacent. Careless take-ins, or take-in exams of jewelry done out of sight of customers, can result in later claims of switching (if treatment isn’t spotted or disclosed immediately).

Put everything in writing. If a loose stone or those in mounted jewelry are fracture-filled, that should be stated on the tag, on the sales receipt, in any ads or displays, and on take-in repair envelopes or appraisal slips.

Remember, too, there is no insurance coverage for jewelry damaged while being repaired. Moreover, appraisal insurance doesn’t cover misleading sales representations. So a store manager and his or her staff must know what they are handling and what the risks involved are.

Additional reporting for this article was done by Gary Roskin,  JCK