How the Jewellery Industry is Tackling the Growing Problem of Fakes

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Fake branded jewellery is an increasingly significant concern in a brand-driven jewellery industry where an increasing number of transactions are happening online. It’s happening at high and low ends of the market, affecting jewellery both budget and fine, and brands are struggling to tackle the issue.

Trying to pass off cheap glass as rare and valuable gemstones isn’t a new phenomenon.

Ancient Egyptian tombs were found inlaid with faience, an artificially dyed ceramic glass made from the mineral feldspar and clearly intended to substitute for other gemstones.

So-called ‘paste’ gemstones, made of leaded glass backed with foil, date back to the 1720’s.

The problem is that many imitation gemstones are hard to distinguish from the real thing, meaning consumers often pay real gemstone prices but receive only cheap imitations.

Imitation gemstones are a problem across the world. People have been arrested for selling fakes from South Africa to Dubai, the problem is known to affect Oman’s gemstone trade and it’s a recognised scam for tourists visiting Sri Lanka.

The coloured glass fakes look so legitimate, it’s hard for an untrained eye to distinguish them from the real ones. It’s frustrating for genuine retailers, and damages confidence in the industry.

As well as creating imitation stones out of glass, there are some practices that are commonly used in the gem trade to improve lower quality real gemstones and raise their value.

These include techniques such as heating, to lighten the stone’s colour or remove unwanted secondary colours, as well as irradiating to change the stone’s colour.

Whilst purists eschew these techniques, they are common throughout the industry and fairly innocuous.

Other techniques that are arguably less benign include bleaching and dyeing, fracture filling using substances such as plastic or polymer resins, and cavity filling to seal voids and add weight, usually using substances such as glass.

It’s hard to know where to draw the line with these kinds of treatments. Which ones are acceptable, and which unacceptable? The problem is that it’s not always easy for buyers to get information about the treatments their stones have undergone before sales.

A complex supply chain also means that jewellery brands don’t always have full visibility of what stones they are getting – though a trained jeweller can usually identify techniques such as filling.

Reputable sellers rely on their own judgment to assess stone but they also have strong supply chains in place to avoid receiving suspect supplies.

Fake branded items

The rise of strong brands within the jewellery industry introduces a greater threat from fakes and forgeries.

Fraudsters attempt to make copies of the designs of popular brands, often using cheaper materials and lower quality techniques. The stronger the brand, the more likely it is that their designs will be copied and sold fraudulently.

Links of London found copies of its most iconic charm bracelet was being widely sold both on and offline.

Some of the brand imitation was alarmingly accurate: when the company launched a new website a near-identical one popped up just a few weeks afterwards selling fakes.

Brands need to protect themselves by buying up all domains linked to their name in order to protect against imitator sites that can be hard to shut down, as well as invest heavily in search practices that ensure traffic isn’t easily diverted away to fake sellers.

Not only are branded fakes stealing away sales but they can also damage the original brand value. Customers who receive a poor quality fake, or who don’t receive anything at all for their online purchase, often have their image of the brand tarnished by the experience.

It’s damaging to brand value, and frustrating for retailers who lose sales to fraudsters.

Does it have to be real?

When is a fake not a fake? Synthetic diamonds have been on offer for a very long time.

Swarovski crystals, which appear identical to diamonds to anyone that isn’t a trained jeweller, were first made in Austria in the 1890s.

Made of lead glass in a carefully guarded secret process, Swarovski’s innovative design studio and excellent branding means that these glass crystals have achieved a cachet beyond their worth.

The Swarovski brand may have pushed affordable costume jewellery as far as it can go but even imitation gemstones have imitators. Just last month Chinese eCommerce giant Alibaba sued two Taobao vendors selling imitation Swarovski crystals.

Since 1989, the genuine article has been stamped with the brand’s logo, although this is often hard to detect. It’s just one of the methods that help identify the true product.

Some jewellery information sources also publish advice on how to detect a high-quality lead glass crystal from the famous brand.

Advice includes checking there are no bubbles inside the gem, and comparing the shine of a suspect gem against one known to be authentic – the Swarovski shine is invariably superior to a lesser copy. It’s still tough to stamp out imitation crystals and many are fraudulently sold online under the brand’s name.

Fraudulent transactions

There’s another kind of fraud to which jewellery sellers are particularly vulnerable – fraudulent transactions such as purchases made from stolen credit cards.

Fraudsters will buy jewellery online to resell, often leaving the retailers out of pocket if the transaction is later cancelled.

A report by 2Checkout, Inc. found that jewellery was an industry particularly at risk from online fraudsters because these small items are high value and easy to resell.

This was particularly true for cross-border transactions and for higher value purchases: purchases over $400 had a 35% greater risk of being fraudulent.

Retailers need to work hard to combat these fraudulent transactions, particularly when made online.

It’s important to keep on top of the latest fraud trends and keep security practices up to date, for example installing the latest security software and having good password practices.

Online retailers also need to partner with a secure payment partner. It’s not easy to stay ahead of the game: fraudsters are generally a step ahead of the retailer, and constant vigilance is essential.

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