Gemstone buyers abroad should avoid deals too good to be true

Question: My sister and I were in Siem Reap, Cambodia, in March, and our tour guide took us to some temples in Angkor. After the tour, he took us to a jewelry store in Siem Reap. I bought a 14 1/2-carat ruby and a 12-carat blue sapphire for $2,500. I was surprised at how inexpensive they were, but knowing my tour guide was from a reputable tour company, I thought he would never take us to a fraudulent jeweler. When I got back to my hotel, I couldn’t sleep. I kept thinking something was wrong with the rings. Before I flew back to L.A., I asked my tour guide in Phnom Penh to take me to a reputable jeweler to have my rings checked. They were fake. The tour guide in Siem Reap returned the rings to the jeweler; they refunded my money. I also called my credit card company, explained what happened, and was given credit. Please warn people about jewels in Cambodia.

Mercy Kiner

Santa Clarita

Answer: There’s a cautionary tale here, but it is not specific to Cambodia. It’s along the lines of what Albert Einstein said: “You have to learn the rules of the game. And then you have to play better than anyone else.”

Unless we are trained in gemology, we won’t play better than anyone else. We shouldn’t even be in the game.

Good-quality real rubies and blue sapphires, which are the sort of kissing cousins of the gem world, are expensive because they are increasingly rare, and buying those, or any other jewel, isn’t for innocents abroad.

Consider this information from Andrew Block, president of Stephen Silver Fine Jewelry in Menlo Park, Calif.: A good stone the size Kiner bought can cost from $25,000 up to $250,000 per carat. That makes the range for a 14 1/2-carat stone $362,000 to $3.63 million.

Paying $2,500 should have set off alarms. “There is no way anything other than a fake or stolen gem could cost that little,” Block said in an email.

Kiner’s experience is a good reminder of what happens when we don’t know the rules.

Perhaps the most important thing to remember is this advice from Russell Shor, a senior industry analyst with the Gemological Institute of America: “It’s a global market,” he said. “It’s not like they are dirt cheap there and really expensive here.

“What is going to be expensive here will be expensive there. You might save 10% sales tax.”

It makes no sense, he said, for anyone, whether in a developing nation or a First World country, to sell a $10,000 gemstone for a fraction of the price when the global market knows its real worth.

“Buying jewelry overseas is a lot like buying jewelry in the U.S.,” Ruth Batson, the chief executive of the American Gem Society, said in an email. “Do some research ahead of time and learn about gemstones and jewelry.”

Perhaps most important: “Ask your friends who have traveled to where you are going if they know of a reputable jeweler,” she said.

And remember, you’re the customer so you have a right to — indeed, you need to — insist, in the nicest way of course, on documentation.

“When you buy a gemstone, make sure it comes with a report from a gemological laboratory, which will confirm you’re getting the quality of stone you’re purchasing,” Shor said, “and that applies whether you’re down the street, across the country or across the world.”

Unbelievably good deals almost always end in disappointment for the buyer and, sometimes, prison for the seller. (Just ask Bernie “10% Return in Any Market” Madoff, whom Time called “the modern face of financial evil.” In 2009, he was sentenced to 150 years in prison for his Ponzi scheme.)

The admonition “if it’s too good to be true, it probably is” is time worn, but for the shopper who is out of his or her depth, it’s worth its weight in gold.

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