From Prism Volume II 2023: The Paper Chase

By Jennifer Heebner, Editor in Chief

Lab reports have evolved from a dealer’s tool to a near must-have to make colored gemstone sales. Is the industry so focused on reports that they’ve forgotten they’re selling beautiful gems? The trade weighs in on how we got to this point and how to balance the paper and the pretty.

In mid-April, Simon Watt had an open memo for an unusual request: an unheated 1.0 ct. blue Sapphire with a lab report. A retailer in New Jersey sought out the gem on behalf of a consumer client, but the co-owner of Mayer & Watt in Maysville, Ky., had to source it. He doesn’t have stones of that size with reports in stock; he doesn’t see the point.

“It’s not large, so it’s not going to exponentially increase in value,” he explains. “I had a heated one that was prettier, so I sent that as well. Just because you get a stone that’s unheated—with a report—doesn’t mean it’s proof that it’s better.”

Many colored gemstone dealers, sellers, and collectors today are thinking similarly, though: that having a lab report on a colored gemstone is the way to go, for many reasons. Lab reports were created decades ago for the identification and grading of Diamonds and were later adapted to communicate particulars about colored stones between dealers.

Lab reports on colored gemstones identify facts—“Like a passport,” says Adolf Peretti, Ph.D., and Founder of Switzerland-based Gem Research Swisslab AG (GRS)—including weight, chemistry, mineral species, if a gem is natural or synthetic, and most treatments. Expert opinions, meanwhile, can also have a place on reports in origin identification, trade colors, and

some treatments, which are increasingly difficult to identify.

“Not every lab can detect if corundum has been heated at a low temperature,” observes Sailesh Lakhi, Owner of Sparkles and Colors/Lakhi Gems Group in New York City. Lakhi sells only top-end unheated colored stones and has gotten conflicting heat reports from different labs on the same gem.

No one denies the good that lab reports do for the colored gemstone industry. Reports help dealers and clients ensure transparency and offer independent third-party validation to instill confidence and aid determination of market value. But the flipside is that reports have become so prevalent, and on an increasing number of lower-value gemstones, that the pursuit of paper may be distracting from the pretty gems being sold.

“It’s a shame people don’t look at the beauty of stones anymore,” says Charles Carmona, Owner of Guild Laboratories in Los Angeles. “Many just want to see what they look like on paper.”

From Volume II 2023: The Paper Chase

How We Got Here

The industry’s embrace of paper started with Diamonds. In the 1940s, Robert M. Shipley, a retail jeweler and the Founder of the Gemological Institute of America (GIA), developed the

4Cs as a mnemonic device for his students; he wanted them to remember the four factors—color, clarity, cut, and carat weight—that characterized a faceted Diamond.

By 1953, GIA unveiled its grading system for Diamonds, which was followed by the grading report, a consistent manner of communicating Diamond facts as set forth by Shipley.

Later GIA contributors, including Richard T. Liddicoat, onetime President, among others, expanded on Shipley’s groundwork with the development of color and clarity scales.

All are innovations adopted by other gemological entities worldwide and offered clarity to the market, eliminating the use of opaque Diamond trade terms like “water” and “river” “because they were ill-defined and caused much confusion,” notes Chris Smith, President of American Gemological Labs in New York City.

What was good for Diamonds became a consideration for colored gemstones. In the 1960s, Swiss auction houses started asking for colored gemstone reports on important Rubies, Sapphires, and Emeralds because they were interested in provenance. The third-party independent nature of the lab, which “had no interest in potential sales,” maintains Smith, provided confidence.

During the same period, the late Dr. Eduard J. Gübelin of the same-name lab began issuing origin reports. By the 1990s, there was “a virtual explosion in the number of laboratories providing this service,” states Smith in an article on the evolution of gem labs in the Fall/Winter 2020 issue of InColor from the International Colored Gemstone Association (ICA).

Plus, the industry was divided between those who wanted a colored stone grading system like the one for Diamonds and those who didn’t. Even Richard W. Hughes, renowned gem

ologist, author, and Founder of Lotus Gemology in Thailand, changed his mind on the topic 20 years after proclaiming it in his Ruby & Sapphire book. The crux of his pivot? The challenge of “creating a language useful for communicating the overall appearance of a gemstone,” he states on his website.

Today, maintains Stuart Robertson, research director for the GemGuide in Glenview, Ill., lab reports are less gemological.

“Increasingly, lab reports are sales tools with more subjective trade jargon creeping onto them. Labs serve a critically important role in supporting commerce through identification services. But dealers should know and sell their products. A fundamental value determinant of natural Diamonds started getting lost when sellers emphasized the lab report, which led to a race to the ‘best’ price. The individualism of each natural stone was lost as consumers were allowed to

believe that the main difference between two Diamonds of the same size, color, and clarity grades was the price.”

Watt couldn’t agree more. “The Diamond business created a monster. Dealers made it so Diamonds couldn’t be sold without a report and grading system to justify their pricing. Now that problem has moved into the colored stone world.”

From Volume II 2023: The Paper Chase

Issues & Values

Lab reports on colored gems help keep the industry honest and consumers protected, but they have flaws. Most obvious are the costs of securing reports, sometimes multiples, and

the time gems are out at labs—sometimes hundreds at a time for large dealers, and for weeks.

Then there’s the consistency issue, or lack thereof, between labs and the reports they issue. One stone can garner five different opinions from a quintet of labs. Evan Caplan of the eponymous firm in Los Angeles knows a dealer who sent a 10.0-plus ct. Ruby to five different labs and got five different origin reports. That was five years ago; the dealer still has the stone. “He doesn’t know what to do with it,” says Caplan.

As many know, origin influences market value. Without a clear one, pricing a gem can be difficult. And even when origin is established, it’s an opinion that can change when science evolves, or when a new report is issued at a different time by a different gemologist. Pocketbooks can be hit hard on these occasions.

Bill Larson of Pala International in Fallbrook, Calif., recently met with a client who wanted to resell a large unheated Burma Sapphire. The client had three reports circa 1994 from well-known labs. Two of the labs claimed Burma origin, and the third couldn’t identify one. Larson sent the stone to a lab recently and was told the origin was Sri Lanka. “That call devalued it by $300,000,” he says.

Despite the problems, important stones nowadays need reports for sales. Auction houses live this reality, routinely securing multiple reports on top colored gemstones from labs in the U.S. and abroad.

According to Jill Burgum, Executive Director of fine jewelry at Heritage Auctions in Dallas, reports directly affect the salability of stones. “Higher prices will be paid for a gem with

a report than one without,” she observes. “We live in a world where people are buying papers.”

Important Diamonds sold in the U.S., meanwhile, frequently get by with just one report.

When Heritage sold a $1.8 million natural-color red Diamond last year, it had a single report. “As it was a Diamond, we only had one report, done by GIA, the world’s leading authority in Diamond grading,” adds Burgum. “There is considerably more variation in colored stone grading, and opinions on origin may differ.”

“So much of a gemstone’s market price is based on these reports,” confirms Watt.

From Volume II 2023: The Paper Chase

What Should Get a Report?

Colored gemstone reports clarify and safeguard, but too much information, especially for consumers, can get confusing. Where does the industry draw the line, if at all, on gemstones that get lab reports? Or is it a dealer’s decision to make?

“We’re getting away from selling gemstones,” says Robertson. “If the industry becomes a paper-dominated trade, if the market gets too confusing, consumers will find something else to spend their money on.”

To be sure, consumers are asking for lab reports. A new survey produced by jewelry manufacturers that belong to The Plumb Club found that more than 70% of consumers said lab

reports were important when purchasing jewelry. This interest in education is grand, and the reports can help sell gemstones, but the combination is also driving up requests for reports on gems that dealers ordinarily wouldn’t dream of procuring. Think Quartz, Tourmaline, and Aqua

marine, among others. “If someone brings in an Amethyst, is it worth it to get a report on it?” asks Carmona.

For the values alone, it doesn’t make sense to most—but not everyone agrees.

Ten years ago, Caplan got a lab report on a 1.50 ct. Padparadscha Sapphire to be sure it was genuine. “Some people sell orange Sapphires as Pads, so I wanted to make sure I was hon

est in what I was providing,” he says. Although the stone’s value was just a few thousand dollars, the expense of the report was worth it for peace of mind. Would he do it again today? You bet. “A lot of Pads lose color. The customer needs to know that.”

Not surprisingly, labs agree. “When someone is paying money for an item, in a certain sense they deserve to obtain whatever it is they would like to confirm that what they expect to purchase is indeed what they have received,” says Smith.

Michael Abraham Bruder, Laboratory Manager at Gübelin Group, also in Manhattan, points out that any material subject to treatment—”Or where origin may be a factor in pricing,” he notes—could or should get a report.

For others, value thresholds are clear. Roland Schluessel, Owner of Pillar & Stone International in northern California maintains that most of his U.S. clients don’t ask for reports on gems valued below $30,000. Not so for his Chinese clients. “They want reports on gems starting at $10,000,” he says. Lakhi has reports on most colored gemstones in his in ventory. He doesn’t keep reports on anything valued below $5,000. On super high-value gems, though, he sometimes gets up to five reports.

An AGTA member survey on the topic reveals that fewer than 10% of respondents secure single reports on gemstones with values as low as $1,000, while 75% are sure to get at least two reports on gems with values exceeding $50,000.

From Volume II 2023: The Paper Chase

Trade Color Terms

Decades ago, the Diamond industry abandoned its use of trade color terms to adopt the GIA’s systematic color grading approach based on an alphabet of descriptors from D to Z. In his 2020 InColor article, Smith noted that the use of “flowery terms” on colored gemstones rose in the mid-1990s when Gübelin started using Pigeon’s Blood, Royal Blue, and Cornflower Blue in Appendix letters accompanying select gemstone reports. Then in 1997, GRS’s Peretti was the first to add these terms to his primary gemstone reports, followed by other labs.

Labs are split on the use of trade colors, with some completely avoiding the practice and others, like Gübelin, GRS, GIA, and others, embracing them. The late Gübelin himself could relate to the “why” behind their use: customer demand.

Peretti recalls the moment when origin and color became critical. He published an article about both hot topics in a trade journal in 1996 and within a few years started getting demands from auction houses for more details. Houses sent him stones to look at to get his opinion. So, he weighed in as other labs do, based on equipment, research and education, and sample stones.

“People said to me, ‘Just give me your interpretation’,” he recollects. “It turned out to be a Pandora’s box. I added a ‘GRS-type’ label to indicate my opinion as well as the scientific color grading. Should I only report the scientific facts? This is the challenge, the balance we seek.”

Thomas Hainschwang, Ph.D. and Director of GGTL Laboratories Liechtenstein, frowns on using trade color terms, maintaining their subjectivity.

“We refuse to add them to our reports,” he insists. “There are neutral ways to describe color based on Munsell [color system] as what the color is when observed under light of a

given color temperature. On our colored stone reports, we simply give a basic color description and do not provide an actual color grade … our colored stone reports are made for authenticity, treatments, and origin determination.”

Smith also opposes the use of trade color terms, calling the practice “unfortunate,” though he has mentioned them on Appendix letters of some reports. He issues the moniker “Classic” on the reports of gems such as Paraíba-type Tourmaline or Ruby if the color, clarity, cut, and origin appear unique to a specific gem species or variety. “The origin determination also has to be of our highest confidence level,” he adds.

GIA includes the “common trade terms Pigeon’s Blood and Royal Blue in the comments section of a report when the stones appear to have the color characteristics the trade associates

with those terms,” explains Shane McClure, Director of West Coast identification services.

Gübelin’s Bruder says his lab issues the terms Royal Blue and Pigeon’s Blood and Crimson Red on select untreated stones of high clarity that meet specific color criteria. Plus, Tourmalines with the right chemistry and color can be considered Paraíba regardless of origin.

“We feel consumers demand these terms to express that a stone is of the most desirable colors,” he says. “This makes these color terms go beyond color and into the realm of quality.”

From Volume II 2023: The Paper Chase

Treatment Detection

When it comes to assessing treatment on a gemstone, the gem labs, despite sometimes conflicting reports, remain a dealer’s best friends. From lead-glass filling to resin, oiling,

heat (including the hard-to-detect low temperatures), and more, dealers can sell gemstones more confidently thanks to the equipment investments and expertise available from

labs. Through hours of inclusion analysis on a wide variety of samples and educated opinions on “degrees of treatment like for fillers,” says Hainschwang, judgments can be rendered.

Equipment investments alone are massive. Peretti says he has more machines in his lab than the offices of friends in Swiss government agencies that regulate gold. “Our labs have had to become high-tech criminalists with at least $1 million investment in machines,” he says.

It’s all necessary to keep evolving and stay current. When science changes, it’s not just a stone’s origin that can change—so can its treatments, and therefore, values. Corundum is particularly problematic for origin and treatment.

“If I have a fine 4.0 ct. Sapphire with no heat it’s worth $5,500–$5,600 per carat, but if I have a heated one, it’s worth $2,500–$3,500 per carat,” notes Kimberly Collins, AGTA Board President and the Owner of Kimberly Collins Colored Gems in Reno, Nev.

Larson recalls a time in the mid-00s when many yellow Sapphires were getting new reports stating heat, a 180-degree turnaround from previous reports issued because detection of thermal treatments had progressed. One of his own gems was in question during this time, and he had a tense wait while a lab reexamined the stone. “I had a pit in my stomach for four days,” he says. The gem only cost $6,000, but the damage to his credibility would have been devastating. “Pads also have stability issues that we didn’t know about until recently,” he adds. “Old reports couldn’t have disclosed them.”

Ruben Bindra, Owner of B & B Gems and a past President of the AGTA Board of Directors, is particularly grateful for the services labs provide. “There are new treatments that are introduced in the market constantly, and it is really hard for a gem dealer to stay on top, so we rely on labs to do that work.”

From Volume II 2023: The Paper Chase

Geology vs. Geography

On the topic of country of origin (COO), industry experts urge the trade to first consider geology, not geography. “Geology doesn’t recognize borders,” says Larson.

Smith has spent 30-plus years studying origin and keenly understands that the complexity of geographic origins is due to the geologic conditions responsible for a gemstone’s

growth—not geography or political borders.

“Various gem-producing countries do not typically contain unique or singular geologic environments,” he says. “Meaning that very similar to the same geologic environments may be

present in different geographic locations around the world.”

Peretti studied origins in depth for a Spring 2017 issue of InColor. In an article, he explored how some inclusions in Madagascar Sapphires resembled those in Kashmir Sapphires from India.

“Kashmir Sapphires have seen an unprecedented rise in value … while their counterparts from Madagascar are ten times less expensive,” he wrote. [Today that value gap has narrowed

by half.] “This offers a great potential for fraud, and the correct identification is thus an important part of the challenge of internationally recognized gem-testing laboratories.”

The process of radiometric age dating, according to Michael Krzemnicki, Director of the Swiss Gemmological Institute, or SSEF, “can provide important information about

the origin of gemstones, as they have formed in different continental zones at different geological times.”

“Origin determination of a gemstone has always been a combination of microscopic observations such as inclusion features combined with analyzed data like trace elements and structural analyses, which are then compared with a database, reference samples, and published scientific literature,” he adds.

GIA issues COO reports on natural Ruby, Sapphire, Emerald, Paraíba Tourmaline, red Spinel, and Alexandrite. GIA’s origin expertise paved the way for an entire Gems & Gemology issue (Winter 2019) on the topic. The foundation for its COO reports: scientific instruments, experienced gemologists, and comprehensive field samples.

COO is a controversial but sought-after feature on lab reports that can literally alter fortunes within the days it takes gemologists to examine gems. Still, origin isn’t the end all.

Peretti recalls when African dealers brought him Mozambique Rubies. “They were tired of the trade looking down on them,” he says. “Just because you have a Burma origin doesn’t mean it’s a high-quality stone.”

And an ugly stone is still that, regardless of origin. Carmona knows this is true. “Sometimes a client wants a Colombian Emerald even if it’s a piece of junk,” he says.

Larson tires of the origin issue. “A stone now must come from XYZ place or it’s not worth as much? Fifteen to 30 years ago, this wasn’t a big deal.”

There are also the games sellers play with origin reports—getting multiples and tossing out the least helpful ones. Honest dealers like Caplan don’t engage.

“I have to show them all—it could come back to me,” he says. “Origin should be a point of interest, but the price should be based on the beauty of the stone.”

From Volume II 2023: The Paper Chase

Navigating Today’s Market

Balancing market demand with the important scientific data and testing work labs conduct is a perennial challenge made more difficult by the mushrooming of the lab landscape.

Their numbers continue to grow, so choosing a reputable one is key.

Gemstone sellers, meanwhile, must trust their own gemological savvy. “Labs are experts but so am I,” says Collins. “I can tell a pink Sapphire from the Umba River Valley from a pink from Sri Lanka.”

Larson agrees. “I know color with my eyes, that’s more important than paper.”

For sure, the trade should challenge itself to embrace higher standards. Smith would like dealers to stop expecting labs to serve as a marketing arm. “Using trade terms is one example of this,” he insists.

Others advise against unrealistic expectations. “The trade expects every lab to have the same standard for Cornflower Blue,” observes Schluessel. “That’s like telling us dealers we should all have the same prices. Survival in this business depends on marketing differences.”

And even though labs don’t always agree, the fact remains that many gemstones today can’t be sold without one or more reports. “In this way consumers can feel the most secure,” says Bruder.

In the end, the job at hand is to sell beautiful gems, so the entire trade must step up to address the crippling of transactions that would generate joy. A case in point: in 2019, Caplan had an offer to buy a 10.0-plus carat unheated blue Sapphire with four reports—three stated Kashmir origin and one claimed Burma. Despite the beauty of the stone and the demand for such a gem, Caplan declined the purchase. “It would have been too much of a hassle down the road,” he says.


Terminology Tango (sidebar)

Language, too, could be fueling lab report issues. There are legal differences between the words “report” and “certificate,” and rampant use of the term “certificates” or “certs” both in gemstones and other industries. Consumers can find certified products or

certificates of authenticity available across a wide range of categories. And for sure, gemstone dealers engaged in casual conversations among peers have referred to reports as certs—even in interviews for this article. It’s not a move made to deceive, it’s slip of the tongue that is sometimes repeated.

“A certificate is worth nothing,” proclaims Roland Schluessel, Owner of Pillar & Stone International in northern California. “You get certificates with everything, whether you buy a carpet in Morocco or organic food.”

To combat this issue, AGTA and its recently unveiled committee to Standardize Industry Terms Surrounding Sustainability and Ethics developed language for the Federal Trade Commission (FTC) as part of its Green Guides Review. In their guidance, committee members warned the agency about “many independent certification schemes in the jewelry industry” and urged the FTC to stipulate that gem reports should not be called certificates.

“AGTA considers that describing a Gem Report or any document as a ‘Certificate’ when presenting a gemstone to a consumer at all levels is a deceptive trade practice and shall not be allowed.” Further, the committee clarified that lab reports “are only the expression of a lab opinion,” and they “should not be presented as certificates since subjective opinions are included and the information on the reports is not guaranteed.”

This is proprietary content for AGTA and may not be reproduced. 

This article first ran in Prism Volume II 2023. See the flipbook by clicking here.