Perils of Ebay Shopping

The Perils of Ebay Shopping for Gemstones

If you are in the gemstone business, I ask you to stop for a minute and look at the panel of gemstone certification cards seen above. Now, forget for a moment that you are in the industry and think about what these would look like to you as a consumer looking for gemstone deals on Ebay. Impressive? Absolutely. Trustworthy appearing? No question. After all, these “Certificates of Authenticity” show all of the technical aspects of the stone, and even list the labs as ISO (International Organization for Standardization) Certified labs. All of this added to the fact that these sellers are highly rated Ebay sellers should give any consumer the belief they can shop with confidence of what they are purchasing is well represented and their purchse decision based on sound industry standards. 

Of course, that is all totally false. Let’s take a minute and look at the real Perils of Ebay Gemstone Shopping. 

Natural Paraiba Tourmaline

Below you see the listing and certificate for a 6.90 carat Natural Paraiba Tourmaline. Certified to be 100% Natural by the AGI Labs. But let’s look closer…

Below is a 30x look at this tourmaline showing that the color is, in fact, not natural at all. This is one of the color infused tourmaline that are so often represented as “Mozambique Paraiba Tourmaline,” a wrongful stealing of the true Paraiba Tourmaline name and a total misrepresentation of natural origin. Let us look further.

 

Natural Burmese Ruby

Once again, “Natural” and “Certified” and an impressive Certificate of Authenticity from the GIE Labs. Any consumer would be very impressed, and very excited to think they won an auction for such an amazing, certified ruby for so little money, just by shopping on Ebay. 

Of course, we all know where this one is going…

 

Here is the ruby in 10x magnification.

 Next is the ruby in 30x magnification showing the classic and diagnostic curved striations of a flame fusion lab created ruby.

Now, before anyone starts thinking: “Nobody would believe these”, you need to see the next example.

 

Natural Emerald Certified Pair

This one bears the mark of a lab we have seen before with these situations, the GGL lab. This was a matched set of supposedly natural emeralds of 9.60 carats each, sold as a set and delivered with two matching GGL Original Laboratory Certificates. Below is one of the certificates and one of the “emeralds” from the set I received here in the ISG office. While many may not recognize this, every student and graduate of the International School of Gemology will immediately recognize that these are not emeralds at all…they are color infused quartz. Worth about $2.00 each, yes 2 US dollars. Let’s take a closer look below.

Below is a 30x image of the dyed quartz sold as “natural emerald” with certification. Absolutely no question, but based on the presentation and Ebay seller rating, hundreds of consumers bought into this scam. What? You may ask? Hundreds of consumers? Here is where this whole thing gets serious.

Below is the print out of the top of the auction where I purchased these two items. Look closely at how many of these fraudulent, misrepresented gemstones they have sold: 577! And they were not done yet. This auction is still active and as of this writing they were up to 587 sets sold. 

Rare Red Ruby

I could go on ad nauseum on this topic, but let’s face it…who is going to do anything about it? Seriously. Just look at the last example below. I have this one in the office also. It is red glass. Worth maybe 50 cents. Seller has sold 374 of these for US$4.49 to consumers who think they are getting one of those great Ebay deals direct from the gemstone sources in India.

Oh, and this auction is also still underway. Sold items now count to 524 of these. 

Let’s Do the Math

Before anyone thinks: “well, its only a few bucks, what’s the harm?” I can tell you that the profits are extremely high and harm is very real. The first and most obvious is the profits. Let’s start with the ruby above:

Approximate Cost of Goods: 50 cents x 524 = $262.00

Gross Sales from Ebay Fraud: $2,352.76

Gross Profit from Fraudulent Ebay Sales: $2,090.76

Let’s go back and do the math on the emeralds.

Selling price: $19.35 Number sold as of this date: 587

Approximate Cost of Goods: $1,174.00

Gross Sales from Ebay Fraud: $11, 358.45

Gross Profit from Fraudulent Ebay Sales: $10,184.45

Now transfer that into Indian Rupees: ₹745,504.95 for this one Ebay auction alone. 

Obviously profits are high with these Ebay frauds. But what about the real damage to the international gemstone industry? That damage? Consumer confidence. Consumers trust in good faith that Ebay, being a United States based selling venue, will protect the buyer just as it does the seller. That for some reason Ebay is looking out for the integrity of the sales taking place on their venue.

This is not the case.  

Legal Protection for Ebay and the Fraudulent Seller

To understand why this is happening unabated by  any government oversight, we have to look at the United States Code of Statutes. According to

47 U.S. Code § 230: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”

In other words, since Ebay is the provider of the interactive computer service, they are not liable for the statements made by third parties selling on their venue. And since the third party is in India, anyone wanting to do anything about the fraudulent sales is going to have to travel to India to take legal action.

One more step…

Now, let’s take this just one more step. Take all of these problems on Ebay, and multiply them times the millions of sellers on Etsy and other sales venues. The issue is mind boggling. Not even the US Federal Trade Commission will take this one on. But there is a solution.

The Solution: Home Town, Independent Retail Jewelers

The solution is consumer awareness. The solution is our industry not being afraid to educate consumers to the major pitfalls of shopping for gemstones on the internet. Internet sales come with no guarantees, regardless of how fancy the presentations may be. The ability to create authentic looking but totally fraudulent sales on the internet is not only very real, but very protected by Federal Law. If consumers understand the reality of the market, they will gain greater confidence in the idea of shopping locally. Supporting home town jewelers.

Home town jewelers are legally liable for the representations they make.

Home town jewelers have a solid investment in their local business community.

Home town jewelers seek to develop long term relationships with local consumers.

Home town jewelers are in it for the long haul, not quick and easy sales by fraud.

I hope this report has brought forth the problems with internet gemstone shopping for consumers, particularly those on Ebay, Etsy and others. Our industry can either keep this nasty secret quiet and continue to lose consumer confidence, or make sure consumers are aware of the facts and grow your business….locally.

Consumers love gemstones, but they hate getting ripped-off. It is time our industry started to embrace this and stop looking the other way on the fraud taking place on Ebay.

Robert James FGA, GG
President, International School of Gemology

All gemstones in this report were purchased and in possession of the International School of Gemology and the Global Claims Associates.