JAA Release Code of Practice

A few weeks ago, the Jewellers’ Association of Australia (JAA) released their highly anticipated Code of Practice.

Ian Hadassin

Above: My friend, Ian Hadassin holding up the Australian flag higher than anyone else!

It’s 25 pages long, but most of it talks about the code’s purpose and administration. Of the code’s actual principles, these are the main ones:

  • Invoicing – I thought this part was quite useful, especially when it comes to disputes, it is always advantageous to have a detailed invoice.
  • Disclosing Treatments – Now at a guess, I’d say most jewellery retailers and their staff wouldn’t even be able to identify treatments in gemstones such as emerald, let alone diamonds.
  • Certification – All diamonds above 1ct and grade H/SI2 should be certified by a reputable lab. This struck me as quite strange as what do they define as a reputable lab, and why make 1ct H/SI2 an arbitrary cut-off point – what about a 90pt D/IF?
  • Handmade Definition – To say a product is handmade, it must be done in the traditional sense (like we do it). Definitions like “hand-engraved” or “hand-polished” can be used for cast pieces which are finished or engraved by hand. It would have been good if they had forced the country and method of manufacture to be disclosed, much like food labels do. I think this would be a great boost for Australian manufacturing, given the industry is now dominated by imports.
  • Advertising – No more going out of business sales, or “Was $X Now $Y”. The question will remain is this enforceable?
  • Valuations – No valuations to be used to sell a product, and valuations must be valued at the price paid for the product, unless sold at a discount. Somehow I don’t see valuations changing much. We never sell our products at a discount, but that doesn’t stop valuers from putting ridiculously inflated prices on their valuations for our products.
  • Internet Pricing and Procedures – No spam, must include total cost, described the item correctly, display terms and conditions and use secure servers for conducting transactions.
  • Blood Diamonds – This is pretty much becoming a cliche for any “Code of Ethics” or “Code of Practice” in the jewellery industry.

Whilst the Code of Practice is a positive move, it simply details what industry participants should be doing AS DESCRIBED BY LAW. Therefore, it acts more of a reminder or clarification of the law to a very small minority of retailers and wholesalers. It does not however address the real issues facing the industry such as:

  • Trade Credit – In my opinion, this is the cancer facing the industry. It is not acceptable for suppliers to be paid any time after their invoice is due. Furthermore, there are a lot of retailers who are either trading whilst insolvent or on the brink of insolvency.  Then again, I wouldn’t expect the JAA or Ian Hadassin to include such a clause.
  • Diamond Certification – After years of “lab wars”, there is still little documentary evidence that is widely available to consumers regarding diamond labs and their grading. This means that to a diamond buyer who has done little in the way of research is dependent on what salespeople say, which, of course is biased. Furthermore, most documentary and anecdotal evidence available online points in favour of the GIA. This isn’t necessarily a bad thing, but it doesn’t help the cause of smaller labs who are just as accurate and consistent.
  • Industry Infighting and Bad-Mouthing – There are still a heck of a lot of brick and mortar retailers who view so called “internet retailers” as the scum of the earth. Whilst having to deal with this on a day-to-day basis, there seems to be even more bad-mouthing in the industry. For example, a client once came and said to us “Retailer X said Retailer Y was really bad”. Bad-mouthing of others in the pursuit of a sale is damaging to the industry as a whole and possibly yourself. The best way to sell a product is to focus on the benefits and features of your own product – not bad-mouth others. Furthermore, there really is no industry association that represents the industry as a whole – including retailers, manufacturers and wholesalers. Whilst the JAA seems to have gained more membership from chain store retailers, it’s lost pretty much all jewellery manufacturers, creating what seems to be a divide within the industry.
  • Valuations and Valuers – In my opinion, jewellery pricing should become more transparent. That means there is a price for gold or other precious metal, the gemstones and the labour involved in producing the piece of jewellery. For the most part, these form the total value of the piece of jewellery. It is not acceptable for an “independent valuer” to place a value of double what someone paid for their jewellery, take a photo, and charge $100 for the so-called service. Instead, the word “valuer” should be replaced with “appraiser”, who instead of focusing on the value of a piece of jewellery, actually appraises the quality of the gemstones and work using more than a loupe and a pocket scale.

I’m sure there’s plenty of other issues facing the Australian jewellery industry, and it is clear that the new JAA Code of Practice simply does not go far enough. However, if the Code of Practice gets just one retailer or wholesaler to change there errant ways, will it be considered a success…? Possibly.

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