How to Safely Buy a Diamond Online - Part 3 of 3
By Michael Bradley
It is now possible to save 40% to 60% by purchasing a diamond engagement ring from an online diamond retailer, rather than from a bricks-n-mortar High Street jeweller. Online diamond retailers don't have retail shops, sales staff, large diamond inventories and other associated operating expenses and are therefore able to pass on the cost savings to consumers.
Of course, a diamond might be one of the largest one-off purchases made in one's lifetime and so it is understandable that many people may be uncomfortable paying for a diamond before it has been seen and examined.
However, as long as the correct research and precautions are taken there should be no reason to be fearful about buying diamonds from Internet diamond merchants.
The three most important aspects of the pre-purchase checks that must be carried out are:
1. Assurance that the diamond business is legitimate,
2. Assurance that the payment method is secure,
3. The risk of merchant fraud or failed delivery is mitigated.
In part three of this three part series we examine the third aspect which is to ensure mitigation of the risk of diamond merchant fraud or delivery failure.
Mitigation of risk of diamond merchant fraud and failed delivery
Only Buy Laboratory Certified Diamonds
Rule number one when buying any diamond is that it must have a certified laboratory report from one of the major gemmological institutes. This gives assurance that the diamond being purchased is the same specification that the diamond merchant has described.
Examine the returns policy of the diamond merchant carefully for any extraordinary or unusual points. When making any purchase over the internet the buyer has a 7 day cooling off period within which to cancel a purchase for a 100% refund. This is because internet retailing falls into the retail category governing selling at a distance and the relevant UK consumer protection laws. All online diamond merchants should mention this as matter of course.
A significant advantage of paying by credit card is that if anything goes wrong with the purchase then the buyer is covered by the UK Consumer Credit Act 1974. The credit card company may then also be liable for the purchase to the same amount as the diamond merchant and payment of the credit card to the amount of the purchase can be withheld until the purchase dispute is resolved.
An escrow service is effectively an independent third party that ensures receipt of the diamond by the buyer and receipt of payment by the merchant.
The process is as follows:
1.The terms of the transaction are agreed between the buyer and merchant and the escrow service is contracted to aid the transaction.
2.The escrow company receives payment from the buyer of the diamond.
3.The escrow company then confirms to the merchant the buyer's payment has been received.
4.The merchant then sends the diamond to the buyer.
5.The buyer confirms receipt of the diamond to the escrow company.
6.The escrow company sends payment to the merchant.
The escrow service usually charges a small percentage of the purchase cost as a fee. As an indicator of the importance of using an escrow service eBay recommends using one for purchases over "300.
Remember, a large saving is being made by purchasing the diamond online, so it won't hurt to get peace of mind for the small percentage an escrow will charge. But make sure you carry out the appropriate research on any escrow company as there have been instances of fraud.
An extra precautionary check is to have the diamond merchant send the diamond to an independent diamond appraiser so the appraiser can confirm that the diamond matches its Laboratory Certificate. The appraiser will confirm the authenticity to the buyer, who can then arrange payment for the merchant.
Once receipt of payment is confirmed by the merchant, the appraiser can then send the diamond on to the buyer. In this way the appraiser also acts as an escrow service. An insurance appraisal could also be carried out by the same appraiser, which is something any insurance company will need to see before insuring the diamond.
Recorded, signature-required, insured postage
A recorded delivery method that is insurable and requires a signature on arrival is the safest way of receiving the diamond through the mail. Royal Mail Next Day Special Delivery with Consequential Loss Damage purchased is an excellent choice. When transporting the diamond by mail always use this method or a similar one for maximum security of delivery.
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