Pearl & Bead Stringers also covered by FTC Guides

Federal Trade CommissionJust this weekend while at a gem show, I was told by a dealer that the material I was looking at was jade. In reality the stones were serpentine.

This is what is called an unfair or deceptive practice.

Anyone who makes jewelry, including pearl and bead stringers, must be aware of the Federal Trade Commission’s (FTC) Guides for the Jewelry, Precious Metals and Pewter Industries. The jewelry industry relies upon the Guides for best practices in describing and advertising jewelry and for disclosure guidance.

We normally hear about the Guides when a jeweler or a company violates them or has to defend advertising claims. But it’s important to understand that the guides also apply to “claims and representations about industry products including…words...or through any other means.” So, if you make jewelry, anything you say or claim about about it is covered under the FTC Guides.

The Guides are intended to protect consumers from unfair or deceptive information about products. So for people who make jewelry and who are honest and knowledgeable about their products, in general the Guides aren’t an issue. However, they can cause some confusion.

Some years ago, I began hearing the term “Biwa freshwater pearls” to describe any number of freshwaters. Lake Biwa, from whence the term originated, was an early source of freshwater pearls and “Biwa pearls” referred exclusively to pearls from the lake. But it stopped production long ago. So, I thought these dealers were misidentifying the source of the freshwaters to gin up interest in their products.

I was wrong. FTC Guides had been amended to allow the use of the term “Biwa” to describe any freshwaters cultivated in Japan.

Similarly, gemologists used to use the term “cultured pearls” to refer only to Japanese saltwater pearls nucleated by a bead. Now, cultured pearls include any pearl in which mankind has intervened to produce the pearl, including freshwaters, saltwaters and South Seas pearls.

The FTC can issue “cease and desist” orders to jewelers and companies who violate the Guides and it can levy penalties.

Here is some general advice for staying in compliance:

  • Know the materials you use. Make the effort to determine the usual treatments for specific materials and try to determine if the materials you are using have been treated.
  • Disclose treatments. My experience is that clients are not put off by knowing a gemstone has been treated. They are put off if they learn it’s been treated after the sale has been made.
  • Look for hallmarks on findings you use. NOTE: Not all findings will be stamped with a hallmark. Some are too small. In this case, ask the dealer to identify the metal on your receipt. If he hesitates, you’ve got a clue. In addition, it’s always best to buy from dealers you trust or dealers with a good reputation in the trade.
  • Familiarize yourself with the Guides, especially those sections which are relevant to materials you use in making jewelry, for example, pearls, treatments, etc.

It’s also important to note that the FTC recently announced that beginning in 2012, it will be revising the Guides. The process is expected to take some time as it is the first major overhaul since 1996. The process will be covered — and probably debated — in trade periodicals. It would be worthwhile to follow it.

The dealer I ran into this weekend intentionally tried to mislead me. By reviewing the Guides and learning what we can about our materials, we can guard against unintentionally misleading clients about the jewelry we make.









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