Get a refund on your diamonds!

2/14/2008:

I’m sure many diamonds will be changing hands today. But what about all the money that’s been wasted in the past?

Did you know that if you bought a diamond between 1994 and 2006, you’re entitled to a refund? But as usual, the lawyers are the big winners again.

From MSN:

Buy a diamond? Get a refund

hoboken-diamonds.jpgYou may be owed a cut of a $295 million class-action settlement for gems purchased as long ago as 1994. Here’s how figure out whether you’re eligible and how to make a claim.

How would you like a little refund on that diamond nose stud you bought in your wilder days? Or the diamond engagement ring you purchased for your sweetie when you settled down?

If you bought a piece of diamond jewelry — or jewelry with a diamond in it — between Jan. 1, 1994, and March 31, 2006, you may be eligible for a refund as part of a recent settlement of a class-action lawsuit alleging that De Beers, the big South African diamond company, had cornered the market for diamonds for decades, keeping prices artificially high.

In settling, De Beers is shelling out $295 million to put the trouble behind it — $135 million of which is earmarked for consumers rather than wholesalers.

“While we don’t accept the allegations, we do believe that settling this suit is in the best interests of our clients, our shareholders and consumers,” De Beers says in a statement on its Web site.

See how to get your refund after the jump.

How refunds are calculated

Your share, if any, will be small. Everyone has to split the pot, so the size of each refund depends on how many other consumers file claims, and for how much. There could be hundreds of thousands — even a million — consumer claims, says Joseph J. Tabacco Jr., the managing partner at Berman DeValerio Pease Tabacco Burt & Pucillo in San Francisco. He’s one of the lawyers behind the lawsuit.

Theoretically, a $10,000 diamond ring is eligible for a $4,500 refund. But realistically, lots of competing claims will dilute that payout considerably. There’s no way of knowing yet how big a refund the $10,000 purchase could bring, says Tabacco.

diamond-refund-eligibility-chart.gif

How to make a claim

Even if the payout is diluted, who doesn’t like a bit of cash back? You have until May 19 to make your move. Here’s how to do it:

  • Go online to the settlement site to file a claim online. Or download a .pdf claim form to mail it to the address on the form, postmarked no later than May 19. Or phone 1-800-760-5431 to get a form mailed to you.
  • Contact the claims administrator if you have questions or need more help: 1-800-760-5431 or administrator@diamondsclassaction.com.
  • For purchases under $10,000, no receipt is required to make the initial claim, though you may need to produce one later. You’ll be asked to confirm on penalty of perjury that your claim is accurate.
  • For purchases of more than $10,000, include a copy of a document, not the original, showing the jewelry’s value and the diamond’s cut, clarity, color, number of carats and anything else that helps establish the purchase and price.

If you paid less than $96 for jewelry with diamonds only, or $166 for a piece that includes stones other than diamonds, your refund wouldn’t reach the $10 minimum payout, so don’t bother. And the refund covers only the diamond, not the other elements in your jewelry, such as the gold, the setting or the labor.

Claim administrators can’t yet say when refunds will be mailed out.

The big winners

The suit is one of a string of legal actions that have dogged De Beers over the years. Not long ago the company, founded in 1888 by Cecil Rhodes, controlled as much as 90% of the world’s diamond trade.

Victims of the alleged monopoly were anyone who bought diamonds at pumped-up prices, including jewelers, jewelry companies and retail buyers of polished diamonds and diamond jewelry.

The real winners of the lawsuit are — surprise!– the plaintiffs’ lawyers, says Rob Bates, senior editor at Jewelers Circular-Keystone, a diamond trade publication. “The only people who are really enriched by this are the lawyers,” who stand to collect $20 million to $30 million in fees, as Bates points out in his blog, Cutting Remarks.

“That’s kind of pathetic,” he says. “That’s just the way our legal system works. Consumers aren’t going to get a lot.”

Recently, De Beers has lost market share to new diamond-mining companies. The competition should have driven prices down, but, Bates says, with no new diamond finds and high demand from China, India and other emerging consumer nations, prices have remained high.

The settlement helps the whole industry, Bates says. “It shows that diamonds are no longer controlled by a cartel. It’s a sign of a more modern industry, that people can have greater confidence in the price.”

Leave a Reply

29 Comments on "Get a refund on your diamonds!"


Member
Westsider II
7 years 6 months ago

Diamonds always seemed kinda silly to me, so over the years I haven’t spent much on them. Same with expensive overpowered cars. Same with designer clothes.

Some might applaud me for not being taken in by the “shallowness”. My guess is I’m just cheap.

What is this thread about, again?

Member
robo
7 years 6 months ago

So marketing diamonds is somehow immoral and marketing sneakers or cars is not? Demand (and therefor true market value) for all products is fueled my marketing. Or do you think that the price of a BMW doesn’t reflect “true value” because you prefer to buy a chevy because it gets you where you want to go just as well?

I think expensive cars are stupid – that’s why I don’t have one. If you think diamonds are stupid and sell for far more than their “true value”, don’t buy one. If you’re a guy and your girlfriend disagrees, then I guess your screwed.

All products are marketed, and the demand created by that marketing creates a “market price.” That’s what things sell for, and if to you it doesn’t represent “true value” to you you are free not to buy it. There’s nothing unusual or nefarious about it.

Feel free to google “economics 101” for more information on the impact of marketing on demand and pricing.

As for the “slave labor” argument diamond miners are actually pretty well compensated compared to the other jobs available in their countries. Labor markets in poor countries are exploited – that’s an indisputable fact, and diamond miners are no exception. But that doesn’t make diamonds any more evil or the market any less legitimate than shoes made by child labor in sweatshops in China.

The presence of diamond resources (and shoe factories) helps lift the standard of living in otherwise poor countries. Botswana uses its diamond wealth to provide things like universal education for its people. Sierra Leone uses it to enrich its leaders.

Does that make diamonds from Botswana rough good, and diamonds from Sierra Leone rough bad? Or does it mean we have a lot of work to do to help Sierra Leone to change their political system to better provide for their people?

Newsflash Red – I enjoy educating people about my industry, whether or not they wind up changing their views. A give and take of honestly held viewpoints is always healthy.

So if you think continuing this string somehow hurts me, you have another “think” coming. But keep googling. It’s fun debating someone who thinks they know all about a topic because that spent 5 minutes on a computer.

Member
FAP
7 years 6 months ago

[quote comment=”70401″]HansBrix hits the nail right on the head. This is about decades of marketing and exploitation, not any true value. Perception is reality, and reality often bites.

[quote comment=”68414″]A commodity that’s mined at near slave labor rates (and slave labor practices) and ends up costing many THOUSANDS through unbelievable mark-up is not what a rational person would consider an honest deal. The “breakfast” example cited above would indeed be a scam if the eggs cost several hundred dollars each due to a dairy farmer cartel.

Care to enlighten us as to where the diamond engagement ring tradition came from? Or who came up with with the “two months salary” benchmark? Hint: both are brilliant marketing department ideas.

Even if a diamond is “conflict free” (sure it is – the sales person said so) that doesn’t free it from ethics issues. How well are miner (minors!) treated? How many abdominal x-rays do they get per week to assure they’re not eating profits? How many children are killed or maimed all in pursuit of shiny rocks?

But what’s a child’s life when “she” gets to impress her friends!

:)[/quote][/quote]

Next time you go for a run or play basketball look at your feet. How old do you think the youngest person in the production line is?

How many of the products we enjoy come at a cost to the health of people involved with production?

Stop whining, both of you, and tell me what are you planning to do about it?

Member
Red Haven
7 years 6 months ago

HansBrix hits the nail right on the head. This is about decades of marketing and exploitation, not any true value. Perception is reality, and reality often bites.

[quote comment=”68414″]A commodity that’s mined at near slave labor rates (and slave labor practices) and ends up costing many THOUSANDS through unbelievable mark-up is not what a rational person would consider an honest deal. The “breakfast” example cited above would indeed be a scam if the eggs cost several hundred dollars each due to a dairy farmer cartel.

Care to enlighten us as to where the diamond engagement ring tradition came from? Or who came up with with the “two months salary” benchmark? Hint: both are brilliant marketing department ideas.

Even if a diamond is “conflict free” (sure it is – the sales person said so) that doesn’t free it from ethics issues. How well are miner (minors!) treated? How many abdominal x-rays do they get per week to assure they’re not eating profits? How many children are killed or maimed all in pursuit of shiny rocks?

But what’s a child’s life when “she” gets to impress her friends!

:)[/quote]

Member
robo
7 years 6 months ago

Red – I’m not sure what I said that you think this article refutes, though I have to admit that the effort you’re putting in to try to engage me on a topic you know absolutely nothing about is pretty amusing. And all because I pointed out in another string that you had used a gender pronoun to refer to another poster, in flagrant violation of the “rules” that you so often applied to little old “sexist” me.

Let me educate you a little bit beyond what you have been able to learn by “googling” the phrase “kimberly process”.

First off, the “cartel” issue and the “conflict” issue have absolutely nothing to do with each other. “Conflict diamonds” are mined by bad revolutionary groups in Africa and sold to unscrupulous dealers mostly in Antwerp. Debeers never comes in contact with the stuff since by definition its mined by somebody else. Conflict diamonds, to the extent they exist, are sold outside the usual distribution chain – that’s what makes them so hard to monitor.

Second, $23 million in a $15 billion dollar a year industry is a pretty small number. While it would be nice to eliminate conflict diamonds entirely, that’s simply not possible, and, while you are free to feel otherwise, the numbers, even if they are a bit understated and they probably are, indicate that, at least for now, the problem is under control.

The Kimberly Process is not perfect. I agree with the “activists” quoted in the article that it could and should be strengthened by the adoption of mandatory rules codified by international treaties.

Nevertheless, the combination of the Kimberly Process and the resolution of various African conflicts has significantly reduced the flow of “conflict diamonds” to a virtual trickle, at least for now. That is likely to change if new civil wars break out in diamond producing countries, so it remains important to make sure that a system is in place to effectively deal with the problem if and when it rears its ugly head again.

Feel free to “google” some more and share your expertise.