Jewelry Fraud

Loose diamond stones_CardinalCommerceThere are many reasons why online jewelry fraud is so prevalent and damaging. Online jewelry merchants have expensive inventories. But, since jewelry merchants have gained a significant place in the eCommerce market, it has helped eliminate the hassle associated with buying and selling jewelry. While some issues with online jewelry stores have been resolved, others have taken their place. This article explores these issues.

Jewelry: A High Risk Vertical

The jewelry industry has always been a target for fraudsters and thieves. One of the reasons for this is the high price of the merchandise. Experts have determined that purchases over $400 are 35% more likely to be fraudulent. There also isn’t a specific type of fraud that hits this industry harder than others. As with other industries, online jewelry merchants struggle to prevent chargebacks, identity theft, and other general types of fraud. Scammers will occasionally counterfeit the jewelers’ merchandise and try to pass it off as real. Additionally, a large percentage of the eCommerce jewelry market has an international presence, which is unfortunate, because it’s more likely that international transactions are fraudulent.

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The FTC on Buying Jewelry

Jewelry fraud, both online and in-person, has become such a prevalent issue that the Federal Trade Commission (FTC) has decided to guide consumers through the process of legitimately purchasing jewelry. Buyers are advised to look at, and consider, several different retailers so that they can make informed decisions about price, quality and service. Ask co-workers, family members and friends for recommendations based on their personal experiences. Know the reputation of any merchant you might buy merchandise from before making a purchase. Be sure to ask about the store’s return and refund policy before giving them access to any personal or financial information, and definitely before making a purchase. These may be recommendations for consumers, but legitimate jewelry merchants should also be aware of these practices.

Conclusion

Online jewelry fraud is a significant problem that negatively affects merchants and consumers because of the nature of the business. Most of the items that are stolen are very expensive, posing legitimate problems for all parties involved in the transaction. A single fraudulent transaction — even one chargeback — affects the online jewelry industry more so than other industries because there is a larger amount of money being exchanged between the two parties, which can lead to bigger losses. The FTC has a page that is specifically dedicated to protecting consumers against jewelry fraud, and such advice applies to online purchases as well as those in brick-and-mortar stores.

If a consumer feels they’ve been victimized by jewelry fraud, they should attempt to work through the issue with the jeweler if they believe it’s just a misunderstanding. Otherwise, consumers are encouraged to contact the Federal Trade Commission, the Jewelers Vigilance Committee’s Alternative Dispute Resolution Service, the Better Business Bureau, or their state’s Attorney General to resolve any fraud-related issues.


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