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Woman’s hand with diamonds featuring synthetic diamonds

Growing Pains

Consumers have begun embracing
lab-grown diamonds—are you ready?

By Shawna Kulpa

On a recent trip to New York City, Andrea Hill shared an Uber ride to the airport with a young couple visiting from out of town. Hill, whose company Hill Management Group offers business consulting and marketing services to the industry, struck up a conversation, and as soon as she mentioned her work in the jewelry industry, the couple wanted to know about “fabricated diamonds.”

“They were just a young couple in their mid-20s, living together but not engaged,” Hill explains. “Manmade diamonds were on their radar. They seemed fascinated with them, and wanted to know when they’d be available.”

Little did the couple know that manmade diamonds are already here. And although the industry as a whole has done little to promote them, consumers have already begun asking their neighborhood jeweler about them.

Despite this growing interest, many jewelers remain reluctant to work with them. Much of the equipment currently available to detect manmade diamonds is financially out of reach for many jewelers, who cite disclosure fears and worry about public perception if unscrupulous jewelers switch out mined stones with manmade diamonds.

“There are people who won’t be ethical about manmade diamonds,” says jeweler Joel McFadden of JMD Jewelry in Red Bank, New Jersey. “It could cause people to lose more trust and faith in the jewelry industry.”

While jewelers are right to have concerns, most experts agree that with testing and full disclosure, there’s no reason why manmade diamonds can’t be sold alongside mined diamonds. And with consumer interest in these stones growing, now is the perfect time to learn what you’ll need to know when dealing with them.

Today’s Manmade Diamonds

Synthetic gemstones have been around for decades, so the recent interest in manmade diamonds may have some jewelers wondering what the big deal is now.

According to Dr. James Shigley, a distinguished research fellow at the Gemological Institute of America (GIA), the difference lies in advances in growth technology that allow for larger, higher-quality stones to be produced.

Lab-grown diamonds can be made using two techniques. The traditional technique, which has been around since the 1950s, subjects a diamond seed crystal to high pressure and high temperature (HPHT) to initiate growth of a diamond. Initially the technology primarily produced yellow or brownish yellow diamonds more suited for industrial applications. In recent years, the technology has evolved to produce colorless diamonds.

The other technique involves chemical vapor deposition (CVD): A tiny diamond “seed” is placed in a vacuum chamber and lab-quality carbon gases are used to grow crystals on the seed. Requiring less expensive equipment than HPHT diamond production, the technique has also been fine-tuned within the last decade to produce colorless stones. (Both HPHT and CVD produce Type IIa diamonds, which are composed almost completely of pure carbon, with little or no nitrogen.)

“With CVD, because it involves growing crystals in a vacuum, there are typically no inclusions,” Shigley says. “Growing crystals is an art in addition to a science, and they’re getting better at it.”

This technological breakthrough has led to manmade diamonds that are virtually indistinguishable from mined diamonds, at least to the naked eye.

And therein lies the concern.

Testing and Disclosure: The Keys to Consumer Confidence

The only way to determine whether diamonds are lab-grown is to test their level of nitrogen, and then (because IIa gems can occur naturally) do additional tests to confirm whether the stones really are lab grown. While there is some equipment available for such testing, much of it is too expensive for the average jeweler. And even though the technology is expected to develop—which, with competitive forces, should eventually help to bring down the price—the question is what to do in the meantime.

“The synthetic diamond manufacturers have created an arms race in detection equipment because jewelers need to protect themselves from undisclosed stones,” confirms Ruth Batson, CEO of the American Gem Society and AGS Laboratories in Las Vegas. “There’s a burden right now on everyone in the supply chain.”

Although the industry hasn’t been marketing these stones to consumers, many observers believe that it’s just a matter of time, which is why it’s important to have testing and quality assurance programs in place as soon as possible. For right now, experts advise that jewelers rely on gem labs for testing and beware of any DIY testing advice they find online (such as trying to view newsprint through a diamond to determine whether or not it’s lab grown).

“There’s no simple way to make that determination,” says Shigley. “If you want to be safe, you should send them in.”

In addition, manmade diamonds should be sold with a gem certification identifying them as lab-grown. “We need to show consumers what they are because there’s a lot of confusion and misinformation, especially on the internet,” says Shigley. “This confusion adds to the problem.”

Since most responsible jewelers are already testing and offering certificates for center diamonds, the real concern is melee, and the possibility that lab-grown diamonds could easily be mixed in with a parcel of mined stones. And, because of the size of the stones and the quantity often kept on hand, most jewelers don’t routinely have their melee tested or graded.

“Melee is the real serious challenge we’re facing,” says Shigley. “There are lots of small stones that could be mixed together.” He admits that he doesn’t know a way around it other than testing, and notes that GIA has recently begun a melee analysis service to screen and separate natural diamonds from synthetic diamonds.

Lafayette, Louisiana–based Stuller Inc. is also concerned about melee parcels being compromised. The industry supplier, which began carrying lab-grown diamonds in 2015, doesn’t carry any stones under a quarter carat for that reason.

“We’re reading a lot of stories about lab-grown diamonds being peppered in with parcels from cutting centers before being shipped to the U.S.,” says Stanley Zale, diamonds and gemstones vice president. “We have been testing all diamonds from 20 points and larger for several years, but the current challenge is in regards to melee. We work with manufacturers and vendors that have protocols and technology in place to ensure they are testing for synthetics, and we have a machine that will screen round diamonds down to 1.3 mm to determine whether or not there are Type IIa diamonds [in the parcel]. We want to get to the point where we’re checking every diamond that leaves here, but we’re not there yet.”

Stuller is awaiting a device that will be capable of testing any shape diamond, and which it plans to make available for purchase. But Zale cautions that the machine is only testing for Type IIa diamonds: Because those diamonds do occur naturally, he says that any diamonds flagged by the tester would still need to be sent to a lab for further determination.

But testing is just one piece of the puzzle. Even if all of a jeweler’s diamonds have been tested and certified by a gem lab, there’s still the matter of maintaining shop and store protocols so that lab-grown and mined diamonds don’t get mixed up in inventory.

Stuller has implemented several policies in order to maintain the integrity of its inventory. “Every lab-grown diamond is inscribed on the girdle,” says Zale. “All of the stones are also graded at GCAL [Gem Certification and Assurance Lab] or IGI [International Gemological Institute]. We don’t let a stone leave the facility without an inscription.”

When it comes to handling its inventory, Stuller maintains a separate safe for lab-grown diamonds to keep them away from the rest of its stone diamond inventory. While a separate safe may not be feasible for many jewelers, Zale recommends at least dedicating a shelf within a safe for lab-grown diamonds.

There’s also the question of how to move lab-grown diamonds throughout a shop to prevent mixing with mined diamonds. Stuller has established clear protocols for its facility.

“Technicians can’t have lab-grown and natural diamonds on their desk at the same time,” says Zale. “We keep lab-grown diamonds in very distinct blue acrylic boxes, while natural diamonds are kept in clear boxes. They’re also kept in a different safe than natural diamonds. We go through a lot of lengths to make sure they’re not going to get mixed up.”

But all of the testing and inventory procedures aren’t going to mean anything if customers lose trust in their local jeweler, and begin to fear that what they think they’re buying isn’t what they’re getting.

That’s why disclosure will be key for the success of lab-grown diamonds. And while you can’t control what the guy down the street is telling his customers, you can control what you tell yours.

Current Federal Trade Commission (FTC) guidelines already have rules regarding synthetic stones, which would apply to lab-grown diamonds. According to the guidelines, these stones must be disclosed to customers, and they can’t be sold as natural without some type of qualification.

To prevent its lab-grown stones from being misrepresented, the New York City–based Diamond Foundry has all of the diamonds it creates graded by a GIA gemologist, and then laser inscribed with the company’s signature. It also issues buyers a certificate with a warranty that provides legal recourse.

There’s also the matter of what to call lab-grown diamonds. This issue recently came to the forefront after luxury department store Barneys started carrying designer jewelry collections featuring manmade diamonds from Diamond Foundry: The jewelry is being marketed as featuring “cultivated” diamonds versus “manmade,” “lab-grown,” or “synthetic.” The term is not one favored by the general industry—during a recent review of the FTC’s Jewelry Guides, the industry associations recommended that the term be limited to organic processes only, and not be used to describe lab-created or imitation diamonds. However, the FTC did not agree to that limitation.

“Our choice of the word ‘cultivated’ is the result of a study and consumer testing completed by a New York City–based communications agency and a review by a law firm with expertise in FTC matters,” says Diamond Foundry CEO R. Martin Roscheisen. “The goal of this study was to determine which descriptors most clearly describe the manmade, un-mined, yet ‘real’ nature of Diamond Foundry’s crystals. The word ‘cultivated’ came out as most clearly communicating this in the form of a single adjective.”

The company ruled out referring to the stones as “laboratory grown,” as it grows its stones in a factory. “We are always open to further refine our communications because one thing is clear: The intent and whole point is for consumers to know that Diamond Foundry’s diamonds are made above the ground in America in a factory, not from a foreign mine. In a sense, because this is the case, we do appreciate the industry’s effort at distinguishing mined from manmade diamonds.”

“The term ‘cultivated’ isn’t loved by the jewelry industry,” admits Hill. “But it’s not excluded by the current FTC guidelines, which say you just have to make it clear to the consumer.”

And Hill highlights an important point: “What was missed in this discussion over Barneys and Diamond Foundry’s terminology was that Barneys has embraced lab-grown diamonds,” she says. “That should be the discussion: Barneys is saying that a lab-grown diamond is a luxury item.”

What Consumers Want

While jewelers are concerned about the infiltration of manmade diamonds into the market, consumers are taking note. For example, in a recent study MVI Marketing conducted on lab-grown diamonds, more than 53 percent of respondents reported that they had heard about lab-grown diamonds. When the same group was provided with background information on these diamonds, more than 66 percent of them had a positive reaction and the number-one reason they gave was because they were not blood diamonds. (The other top two reasons given were that they were less destructive and that no one could tell that they were manmade.)

When it came to the idea of engagement rings, 39 percent of those polled said that they would consider a lab-grown diamond, compared to 22 percent who said they wouldn’t. The remaining 38 percent said they weren’t sure and would need to see it in person before deciding.

“It’s a category,” says Marty Hurwitz, CEO of MVI Marketing in San Luis Obispo, California. “I’m not sure what the future will be, but consumers are willing to look at them, especially younger [Millennial] consumers because of the [greener] practices and the price. You’d have to be deaf and blind to not know that consumers are asking for it.”

Still, industry reaction remains mixed. Some, like San Francisco–based designer Vicente Agor, see lab-grown diamonds as an “exciting development.” Others take a more moderate position, similar to that held by Jeffrey Fischer of Fischer Diamonds in New York City: “I don’t think they’re likely going to become a symbol of engagements or romance, but they will serve a jewelry purpose.”

And some, as Shigley notes, “don’t want anything to do with them.” Ann Arnold of Buyers Intelligence Group in Napa, California, sees that divide playing out among the retailers with whom her company works. “Within one group, we have retailers that don’t think these mean anything,” she says. “But in another group are retailers that are carrying or considering carrying them. Some of them have had customers drive miles out of their way to get a lab-grown stone from them.

“It’s definitely something to pay attention to, and it’s a conversation that will continue,” she says.

Where Do We Go from Here?

Right now, there is no mass marketing being done to promote lab-grown diamonds, but every day more consumers are discovering them on their own. They’re starting to ask their local jeweler about them, and soon, if not already, they could be asking you.

“This industry has built diamonds as rare, forever, and an earth substance, and [they] account for a large percentage of industry dollars,” Hill explains. If this narrative that the industry has spent decades building changes, we need to be prepared with a new one that incorporates both mined and manmade diamonds.

What can the industry do to help create that new narrative? “We need to be having the conversation instead of shutting it down,” says Hill. “We need to be providing guidance at the retail level on how to talk about these things. And it isn’t just about the environmental or legal issues, but how to present it as a choice to the consumers so they don’t feel bad if they choose one or the other [natural or lab-grown]. We need to make it okay to buy both.

“It’s like with food,” she continues. “You can go into a grocery store and pick organic green beans, non-GMO green beans, broad production green beans, and more expensive green beans with mushrooms. Grocery stores don’t debate products. They let the consumer have the choice. They’re just choices.”

Anyone worried that lab-grown diamonds will be replacing mined diamonds can rest easy.

“Diamonds can co-exist very nicely,” confirms Hurwitz. “They’re two competing products in the same category. Some people will want mined diamonds, some won’t be able to afford them and will be looking for an alternative. By no means can they kill off diamonds. That’s how you should treat them. Know your suppliers, train your staff, and pitch them to consumers.”

And know that, at least for now, lab-grown diamonds are not going away anytime soon.

“We don’t know what’s going to happen,” says Zale, “but today, there’s a demand for it. It’s here.” 

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