Buying with Confidence: The AGTA Advantage

We joined the American Gem Trade Association about a decade ago, but we’ve rarely taken the opportunity to advertise the advantages a buyer has when shopping with an AGTA member. Founded in 1981, the AGTA is now the leading North American colored gem association. It is also by far the largest with 1200 Members. Joining the AGTA requires five years of active business in the US and several references from leading industry members. All member applicants are vetted by the organization. There’s no such thing as “just joining.”

One of the main aims of the AGTA is to implement and enforce stringent business practices and a code of ethics that is mandatory for its members. One of the primary member duties is “to protect its clients… against fraud, misrepresentation and unethical practices in business transactions and avoid exaggerating, concealing or omitting to disclose any necessary or relevant information pertaining to the member’s products and business transactions.”

As misrepresentation is one of the key challenges for gemstone buyers, the AGTA wants to make sure that if a buyer does business with one of its members, they are guaranteed transparency. The AGTA recognizes that in an industry that requires a lot of expert knowledge, buyers can be at a serious disadvantage if they don’t know how to ask the right questions or are not aware of certain facts about gems (i.e. how gem enhancement changes value).

The AGTA also aims to protect international gemstone suppliers such as artisanal miners all over the world by providing humanitarian aid, encouraging fair trade practices and by increasing consumer awareness and education.

Here are the most relevant tenets of the AGTA Code of Ethics for consumers like you.

1. The AGTA mandates full disclosure of all gemstone enhancements. As you know, most gemstones on the market today have some treatment or other, and these treatments can have a strong impact on pricing. Emeralds, for example, decrease in value drastically with the amount of enhancement present in the gemstone. On marketplaces that have no quality control such as eBay, Etsy or Instagram, failure to disclose treatment is a widespread practice.
   
   
2. The AGTA prohibits the use of terms like “investment gem,” “investment grade” or “museum quality” in connection with sales to consumers. The AGTA allows exceptions to this but doesn’t specify details. At CRD we talk about gemstone investing with clients and we help them select gems for this purpose of course, but we refrain from labeling any specific gem as investment grade or type. 
   
   
3. For investment purposes, it is the duty of any AGTA member to communicate to the buyer that there is no public market for selling, investing or liquidating gems, that a sale with profit is not guaranteed (just like with any other investment tools), and to ensure that the buyer does not need to liquidate the purchased gems. To give an example, I was once asked if I could help an investor buy gems for the sole purpose of shipping them to another country and then liquidating them to turn them back into cash as part of an imminent inheritance. I offered to act as a broker to help the buyer select but I made it clear that I do not in any way participate in the liquidation of the gems, and I also advised the client that if this was her intent, she should buy an investment tool that is easier to resell, like stocks or bonds. Colored gemstones have increased drastically in value in the last couple of decades, but it nevertheless takes a while before they can be resold at a higher price - it takes years for gems to appreciate. Gems are not an instrument that you can turn around and get easy cash for like gold.
   
   
4. To that same end, AGTA members have strict rules to follow when it comes to lab created gems or diamonds. Firstly, we must clearly distinguish them from natural gems as “man made.” We can use terms like “imitation”, “synthetic” or “lab grown” where the latter two words are intended to have the same meaning. That is, a lab diamond can also be called a synthetic diamond in the trade. The objective here is to separate it from any naturally “grown” stone. At CRD, we only sell lab diamonds upon request as we are fully aware of their declining value.
   
   
5. Finally, the AGTA also has guidelines when it comes to the certification of gems. We are strictly prohibited from writing up an appraisal or laboratory report for a gem whose value we have a vested interest in overstating, i.e. the gems we sell to you. We can of course write an itemized bill or description of the gem that can be used for insurance purposes. But we are not allowed to provide a circular reference! On Etsy, we are often asked for “certificates of authenticity” and while it would of course be easy for us to just print and laminate little certificate cards, we are not permitted to do so. And we prefer it that way. A very simple lab ID without origin can be obtained for about $60 per gem from GAL, and a report from GIA for a small gem (under a carat) will also hover around that price point. For larger gems, we obtain GIA or AGL certificates for the consumer and offer them with the sale.

You can read the full Code of Ethics here.

Before I close, let me answer a question that you might be pondering: does it cost more to buy from an AGTA member? Generally, the answer is no. AGTA members also buy from one another, i.e. I buy gems from AGTA wholesalers and sell them retail to you. And as far as my own experience goes, buying from the AGTA, or at the Pueblo show or the GJX show in Tucson is all the same. Each show offers both expensive and cheaper gems, while buying more reasonably priced stones overseas requires travel, expertise and connections. For a smaller or single purchase, it just isn’t worth it.

What about buying on a market place such as eBay or Amazon or Etsy? I buy on all these platforms, but I make sure that I understand who or where the seller is and evaluate the risks accordingly. And: if I make a risky purchase, I never spend money that I cannot write off as a loss if necessary. In the US, Canada, Australia and in Europe there are strict laws for buyer protection but if you buy from elsewhere in the world, the laws may not be the same, so the risk is yours.