When jewelry shop owner Ms Huang had a yellow gemstone, around the size of a walnut, appraised, she received a nasty shock. "The reason I am coming here to do a test is because I would like to be sure about the quality of the stone, whether it is valuable or not. If it is real, I also want to have a certificate so that I can sell it with some kind of proof in the future," she said before the appraisal.

"This is a synthetic cubic zirconia, madam. It looks exactly like a diamond but is much less valuable," Su Qin, a jewelry appraiser from the Shanghai Jewelry Testing and Appraisal Center, told Huang.  After the appraisal, Haung left in a bad mood.

There are many people in Shanghai, like Huang, who feel uncertain about the true value of the gemstones they own. Last Saturday around 500 people had free appraisals at an event hosted by the National Gemstone Testing Center Shanghai Laboratory. Of some 2,000 pieces appraised, more than 20 percent were found to be fakes.

"Consumers bought these gems from various places, including tourist sites, antique markets and street vendors. The pieces they got from these places were usually of low quality," Zhou Songsong, operation director of the National Gemstone Testing Center, told the Global Times. Zhou suggested one way to ensure the quality of gemstones is to ask for a certificate of authenticity.

However such certificates are also suspect. In an annual quality check targeting large-scale jewelry stores carried out by the Shanghai Administration for Industry and Commerce early this September, it was found that gems sold at two major retailers located in Huijin and Oriental department stores had lower color grades than stated in their certificates.

 
Appraisers check the authenticity of gems. There are six official gem and jewelry testing centers in Shanghai. Photos: CFP

Gem standards

Known as "Gem IDs," the certificates are actually reports, issued by an independent gemological laboratory, which state that the gem in question has been examined by official appraisers who use professional gemological instruments. Appraisers judge the gems according to carat, color, cut and clarity, and also transparency and texture if the gem happens to be jade.

It is important to have a gemstone evaluated by an independent laboratory because every stone may possess characteristics, which are not visible to the naked eye and these minute differences may affect the price. If a gemstone has not been checked by a professional, it is very likely that it is of lower value.

According to experts, the first thing one should check on a certificate is the name of the laboratory or grading institution that conducted the appraisal. For diamonds, the Gemological Institute of America (GIA) is the foremost authority in the world, though there are other reputable labs including GIA's European counterpart the Hoge Raad voor de Diamant (HRD Antwerp) and its competitor the International Gemological Institute (IGI).

"All three have different diamond grading systems, because not all labs are alike. There is no such thing as a universal standard. Carat is indisputable, but it is not the same for clarity. Nearly every natural diamond is formed with impurities or blemishes that need to be identified. If an appraiser finds impurities that another appraiser did not notice, then there might be some disputes over the grade of clarity," Hu Zhikun, chief diamond grading supervisor from the National Gemstone Testing Center, told the Global Times. 

Despite different standards in grading the gems, Hu agreed that the overall results of one examination should be more or less the same across different labs, adding that consumers should not be too worried if a gem with an international certificate receives different results when it is appraised again in China. "As I said, there is no unified grading standard. Even under the same GIA system, there are differences according to countries and labs," Hu said. 

Among the cluster of gold and gem shops around Yuyuan Garden, there are at least three authorized gem and jewelry testing labs. They all belong to the six official gem stone testing centers, which are located across the city.

The certificate or grading report issued by these six centers has a number, which uniquely identifies a gem or a piece of jewelry. These centers usually keep an internal record of the information. "We normally keep the record for three years in the computer system. If consumers want to keep it for a longer time, they have to renew the record at our center before the certificate expires," Su Qin, an appraiser from an official gemstone testing center, told the Global Times.

Customers can go online and input the certificate number on the centers' websites to find information about their gem or piece of jewelry. It is also a way of checking whether the certificates they have are real or not because fakes have also been spotted in stores.

However, there are hundreds of other gemstone grading and testing labs set up by small businesses, who hire the appraisers themselves. The reliability of the appraisals from these labs is hard to confirm, according to insiders.

Measuring value

A gem certificate with a grading report is a document describing the physical properties of the stone and does not include the monetary value of the stone. It is only a quality check. When people say a gem lasts forever, they refer to its physical properties that have been formed after being buried deep in the earth for millions of years, but the monetary value of gems in the market could fluctuates considerably over a short period of time.

 "For the price of a loose diamond, the most important factor in determining its value is carat, which is the least debatable factor. Generally speaking, the bigger the diamond the higher the price is. For professionals, we view the cut as the second most important factor because good cutting can contribute to the overall beauty of a diamond by increasing its brilliance, fire and scintillation or sparkle, when a diamond is moved," Hu said. "For consumers in Shanghai, color ranks higher than clarity. However, we can hardly quantify how these factors weigh in the final price and we do not give any opinion on this."

According to Hu, graders in the lab judge a diamond's color by comparing it with master stones and it takes well-trained specialists a lot of time to make a distinction. For an ordinary consumer, with almost zero experience and training, it is very difficult for him or her to tell the difference between a D color, which is considered the best, and an E color for example.

According to the price list for loose diamonds published on the Shanghai Diamond Exchange's website on September 30, the price of two diamonds of the same carat (0.51) and clarity (VS1) but with different color grades (D and E) is 16,165 yuan ($2,531) and 14,092 yuan respectively –  a difference of around 2,100 yuan, based on something that is impossible for most people to identify.

The fact that a diamond's color grade is practically impossible for a novice to judge was exploited at a business located in Oriental Department Store, where a batch of diamonds had a G-grade color, but were labeled as F on their certificates.

"The more lenient the grading, the more profit the merchandise can get because diamonds of colors in upper grades are rare. When something is scarce, it is precious," said Ms Li, who has worked for a branded diamond and jewelry company for over three years.

According to Zhou Songsong, the price of a loose stone is considered to be easier to calculate compared with a mounted one. If the gem is mounted and made into a piece of jewelry with brands, then the price will definitely go up. "Some world-renowned luxury brands have their own designers, processing plants and craftsmanship. The cost of this labor and the added-on value of the brand name have made it more difficult to say what the exact prices are," said Zhou.

Certified bias

Usually, consumers are strongly recommended that they should not buy gems without a certificate or grading report. If they are uncertain about the international certificates such as GIA and HRD, they are advised to have a second check done at a domestic gemstone testing center.

"Domestic certificates have legal validity here in China, so if consumers have disputes over the quality of the gemstones, they can use domestic certificates as reliable proof while the international ones do not have the same legal recognition," Zhou added.

However, there is always the possibility of potential bias and undue monetary influence upon the outcome of the gemstone testing. "When consumers question the grade of a gem, it is not rare that the seller will ask some small gemological testing centers to be lenient with the result," Li said.

Zhong suggests that consumers send their gems to authorized organizations and institutions. Therefore, there is a growing need for well-trained professional appraisers. It is estimated that 100,000 people are needed in this industry, according to statistics from the Shanghai Gold and Jewelry Trade Association.

Money back

When people are cheated, it can be devastating to find out something that was thought to be priceless has only limited value. However few individuals take legal actions. "It's hard to trace the origin of many fake gems. Someone might have purchased a jade bracelet from a market in Xinjiang when they traveled there. It's unrealistic for them to run back there to ask the business to take responsibility," said a sales assistant named Zhuo, who works at a jade store near Yuyuan Garden.

As a result, few have researched the legal options available to defend their rights. However, even if they do, and putting aside possible arrangements between testing centers and businesses, it remains hard for consumers to get a refund or even an apology. "Most of the customers coming to get their jewelry appraised are middle-aged people. The age of people getting cheated ranges from 30 to 40," said Zhou.

A woman surnamed Han from Xiamen purchased a diamond ring from a branded jewelry store for her wedding in late 2009 for 5,500 yuan, 60 percent less than the marked price. However, when she went to an appraisal center a few weeks after the purchase, she was told that what she bought was a fake diamond, which wasn't even a zirconia.

Han filed a lawsuit against the jewelry store, asking for 11,000 yuan compensation, an apology and another 10,000 yuan for emotional damages. However, all her appeals were denied by the court since it was argued that Han only raised doubts about the diamond's authenticity 18 days after the purchase. That is a period, during which a change could have been made, according to the judge.

As an insider, however, Li says that if a piece of jewelry makes one happy, they should not let its value influence their feelings. "It is all about what you believe. For those who believe in the international certificates, they will not have a second domestic check. For those who love jewelry, some people do not even care whether there is a certificate or not. If you believe the stone is priceless, then it is priceless to you," she said.