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Guidelines for Ethical Selling

Ethics is a top priority for your business, and it’s one of the cornerstones of the Preferred Jewelers International program. So, you need to make sure your own professional conduct meets the highest standards in this area.

Most ethical questions that arise in selling jewelry have to do with “representation” and “disclosure”. Those are legal terms that refer to two simple principles: Everything you tell customers must be accurate, and you must provide all the information customers need to make educated purchase decisions.

Although both principles are obviously valid, they imply a number of responsibilities and challenges. One of the biggest is maintaining solid product knowledge. Another is making a firm commitment to integrity. There’s also becoming familiar with the various rules and standards that apply to your profession.

Beyond these basics lies the ability to put yourself in someone else’s shoes. That begins with the question, “What would I want to know if I were considering this purchase?“

You also have to remember that, while customers have a right to pertinent facts, they still desire romance. So, as you’re fulfilling responsibilities with regard to representation and disclosure, you also need to keep in focus the reasons for owning or giving fine jewelry. That takes thought and creativity when you’re preparing for presentations, plus close attention to the customer throughout the sales interaction.

The US Federal Trade Commission or FTC helps to set ethical and legal standards for all jewelry professionals. One way it does this is by establishing trade practice guidelines. These have the force of law and they provide the basis for many state laws as well. Continental Buying Group, Preferred Jewelers International, and many other industry organizations include FTC guidelines in their rules of conduct for members.

The set of FTC rules that apply to our profession is titled Guides for the Jewelry, Precious Metals, and Pewter Industries. It includes 27 separate sections. One of the first — Section 23.1 — sets the overall tone with these words:

It is unfair or deceptive to misrepresent the type, kind, grade, quality, quantity, metallic content, size, weight, cut, color, character, treatment, substance, durability, serviceability, origin, price, value, preparation, production, manufacture, distribution, or any other material aspect of an industry product.

The rest of the sections build on this statement. One deals with illustrations in advertising and other promotional material. There are seven sections on precious metals and jewelry. Seven more are devoted to diamonds. Four discuss pearls, and there are five sections on colored gems.

In addition to the FTC Guides, laws concerning issues like endangered species, environmental protection, human rights, and the war on terror also apply to our industry. So do those governing personal behavior and business activity in general.

For example, in all 50 states consumer-protection laws aloe customers to sue retailers for unfair practices. In most states, giving false information—or misrepresentation—is illegal, even if you do it unknowingly. The knowing omission of material facts—or failure to disclose—is also illegal. (A material fact is anything that might reasonably influence a customer’s decision to buy.)

Obeying the law is not always enough, either. Consumers sometimes win court battles despite claims that seem unreasonable to jewelry professionals. And even if a disgruntled customer doesn’t pursue legal action, he or she may use other means to avenge a real or imagined wrong.

The best tool you have for dealing with all these possibilities is continuous professional development. You need to make a personal commitment to being honest and knowledgeable, so you can rightfully earn customer trust. Try your best to establish and maintain a friendly professional relationship with each person you serve. Become familiar with the FTC Guides, and accumulate related informations as you run across it. Keep current on general facts about your products, and know the specifics for items in your inventory.

Also be scrupulous about following your store’s policies and procedures. These were designed to protect your customers, your firm, and you. Whenever you have a question, ask management and talk it over with coworkers you respect. Ultimately, the shared experiences and insights of others on your team may prove to be the surest guides of all.

Ensuring Integrity

Two of the most prominent examples of integrity-related issues affecting fine jewelry are conflict diamonds and money laundering.

Conflict Diamonds— Conflict diamonds, also called blood diamonds, first became a problem in the 1990’s. At that time, diamonds from the African nations of Angola, Democratic Republic of the Congo, and Sierra Leone were being mined and sold to finance civil wars. In the years since, new media, movies, and other sources have focused on conflict diamonds. Human-rights groups have also brought attention to them. As a result, many consumers are now aware of the issue.

If you have customers who are concerned about the conflict diamonds, you can provide information and assurance.

At the height of the civil wars in Africa, conflict diamonds represented only a tiny fraction of the world’s total output. Those wars have now died down or ended, and the potential supply of conflict diamonds has dropped with them. A global coalition has also taken steps to end the conflict diamonds problem. The starting point for this effort is known as the Kimberly Process. Its aim is to prevent conflict diamonds from entering legitimate market supply channels.

The Kimberly Process was implemented in 2003, and it’s now enforced by more than 50 countries. In addition, industry organizations and firms at every level have adopted a system of warranties that extends all the way from mine to showcase.

Continental Buying Group Supports the Kimberly Process. Since, it is not currently possible for retail jewelers to verify the country of origin of diamonds, CBG works closely with diamond suppliers to ensure that they do not knowingly purchase diamonds from conflict areas. CBG also asks suppliers to commit that they will not knowingly sell illicit diamonds and that, to the best of their ability, they will undertake reasonable measures to help prevent the sale of illicit diamonds in this country.

Money Laundering-Soon after the terrorist attacks of 9/11, the USA PATRIOT ACT was passed and signed into law. Its goal is to prevent further attacks within the United States. The act covers a wide range of law enforcement efforts. One section includes provisions designed to stop money laundering, and these apply to the jewelry industry.

This is necessary because money can be converted into gems and jewelry, which can then be transported from one place to another and sold to finance terrorist activities. The Patriot Act requires firms and individuals throughout the industry to take effective steps to keep this from happening.

Under the Patriot Act, most suppliers and manufacturers, as well as many jewelry retailers, are required to establish formal anti-money laundering (AML) programs. Preferred Jewelers International requires all members to comply with the Patriot Act.

As an individual jewelry sales professional, your personal responsibilities call for knowledge, awareness, and skill. You have to be familiar with your store’s AML program and the procedures and the procedures that support it. You have to stay alert for situations that may raise compliance issues. You also have to develop the ability to foil criminals without alienating legitimate customers.

The Kimberly Process and the Patriot Act are just two examples of solutions to big social issues that have an effect on the jewelry industry. PJI and its members—including your firm— are taking an active and ongoing role in identifying potential problems and solving them, so you and your customers can always have the confidence in the integrity of the merchandise you sell.