Red Flags When Buying Jewelry for Holiday Gifts

It's the season of gift-giving, and jewelry is often top of the list. PH888/Shutterstock

It’s the season of gift-giving, and jewelry is often top of the list. Whether you’re looking for the perfect diamond engagement ring or a gorgeous gold bracelet for mom, shopping for the right piece can be stressful.

With so many fakes on the market, how can you be sure what you’re purchasing is the real thing? There are red flags that wave themselves when buying jewelry. You just need to know how to spot them.

Unreasonable, Inconsistent Return Policies

Don’t buy any jewelry from a retailer or jeweler before you review their return policy. Note how long you have to change your mind and if there’s a restocking fee.

Most retailers or jewelers will have a restocking fee, but it should only be around 10 percent of the sales price. However, illegitimate sellers may charge up to 50 percent.

And if you bought the item online, note who pays for the shipping if you need to send the jewelry back. It’s usually the buyer. The exception is sites such as Amazon.

If you’re spending a lot of money on a piece, double-check that you can return it if it’s not what you ultimately want.

Mislabeling ‘Plated’ and ‘Gold Filled’ Jewelry

Dishonest sellers stamp “14 karat” on jewelry that’s made up of little to no gold.

In the United States, the sale of precious metals and jewelry is heavily regulated. Protections come under the Federal Trade Commission (FTC) and the National Gold and Silver Stamping Act. These laws are stringent when it comes to protecting shoppers from fraudulent retailers.

But regulations are inconsistent outside the United States. Avoid buying jewelry that claims to be “precious metals” from non-U.S. companies. These countries may permit stamping 14 karat on only plated or gold-filled jewelry. You'll pay a high price for a fake.

If the price is low and seems too low to be true, be wary. Low prices for 14-karat gold usually denote a fake.

Altered Gem Certificates

You should always ask for a gem certificate before purchasing a piece. But, unfortunately, fraudulent jewelers may give you a fake certificate.

Avoid this scam by asking for a grading report from a reputed lab. One reputable company is the Gemological Institute of America (GIA). This is a nonprofit organization and is not tied to retailers or commercial gemstone dealers. Its reports are considered the gold standard.

If you aren’t sure about the certificate, even if it’s from the GIA, contact the company online for its standard reporting template. Check for security features that the lab inscribes in its reports. If you doubt the certificate’s authenticity, walk away from the sale.

If you’ve never heard of the lab and it’s a generic certificate, be aware that the lab may have ties to the jeweler and isn’t providing an impartial report.

It’s essential to have a certificate from a reputable lab to ensure the jewels’ authenticity.

Jeweler Ignores Wholesale Precious Metals Cost Fluctuations

The cost of precious metals fluctuates daily. And legitimate jewelers respond to these changes.

When preparing to make an expensive jewelry purchase, check the jeweler or retailer’s website frequently over the course of a month. If the prices don’t change and you know that precious metals have fallen in price, you might be charged higher than you should be.

You can check the price of precious metals at Kitco Gold Index.

Buying Jewelry Online

Many people have taken their jewelry shopping online. But there are pitfalls that you can fall into if you’re not careful.

Ensure you are familiar with the retailer before looking at their website. If you don’t know the company, be suspect.

Spotting a Fake Online

It’s easier to spot a fake in person than it is online. But the main indicator of authenticity is the price. There’s a reason expensive jewelry costs so much. Fine jewelry has a certain level of craftsmanship and materials that you won’t find in lesser pieces.

If you come across an item that is priced significantly lower than you’ve seen anywhere else, you might be looking at a fake.

For example, if you’ve seen the piece offered in other stores or sites for $5,000 and you find the same exact item for $1,000 on one website, this should be a red flag. It’s probably made of inferior materials. You probably won’t be purchasing what you want.

Reputable sellers include a picture of the product. One of these photos should show the branding on the piece. A stamp could authenticate it as well. Just be sure the picture of the brand or stamp is clear and can be easily read.

Ensure that all serial numbers in the product are embossed onto the piece. And, of course, you'll want to see the certificate for expensive diamonds.

Buyer Beware When Buying Jewelry

If something doesn’t feel right, it probably isn’t. Check the paperwork on any gem you’re thinking about purchasing. Be sure you know the origin of gold or other precious metal jewelry. Only shop at reputable jewelers you know when you are online.

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