Managing:Legal Issues

A new assay machine will help to fight underkarating

by William H. Donahue Jr.

The Jewelers Vigilance Committee has launched an initiative to go after manufacturers and retailers who violate the U.S. Gold and Silver Stamping Act. The organization has bought an X-ray assaying machine that can judge karat fineness without destroying the jewelry. Older fire-assaying methods did destroy the jewelry.

The approximately $100,000 machine was bought with a grant given to JVC by JCK magazine and shows. There will be a fee to assay jewelry, but the amount wasn't set at press time.

Most major manufacturers and retailers already comply with the Stamping Act, says Dave Rocha, assistant director of Jewelers of America. "We don't get a lot of complaints about this problem. Most manufacturers and certainly designers want retailers and consumers to know where a piece came from and stamp their pieces accordingly."

But Cecelia Gardner, executive director of JVC, hopes the new program will help halt the mostly smaller, unknown operators in temporary establishments who violate the law by making or selling jewelry that's underkarated, not stamped with a trademark or counterfeited.

No Official Policing, Please
In part, JVC is instituting the program because the U.S. doesn't officially monitor compliance with the Stamping Act. And no other trade association or private agency in the U.S. routinely and randomly assays jewelry or checks for trademarking compliance on karated jewelry. This is in contrast to the British Goldsmith's Hall, a government agency, or Europe's Emagold, a trade association, both of which monitor metal fineness.

Industry leaders tell Professional Jeweler such a system would not be welcome in this country. They don't want another government bureaucracy or private system that would cost money to maintain. So because there's already a legal mechanism in place to go after violators, JVC says its program is enough to give jewelers and manufacturers recourse to prove violations.

Retailer Benefits
To a large extent, retailers can protect themselves by buying and reselling only properly marked gold and silver. But JVC's new machine can help retailers identify jewelry purveyors who they suspect are breaking the law. If retailers believe a competitor is selling underkarated gold, they can buy the piece and send it to JVC for testing. If results indicate a violation, retailers should notify the local Better Business Bureau, the local division of consumer affairs and the state attorney general's office.

While many government agencies are lax in enforcing the Stamping Act, you still should report the problem. The more complaints an attorney general's office receives, the more likely it is to investigate and/or prosecute. (It's usually not feasible for one retailer to sue a violator. The legal fees and time involved usually aren't worth it.)

But underkarating is a deceptive trade practice, and you can accomplish a great deal in reporting such practices (Professional Jeweler, July 1998, p. 106, and August 1998, p. 120). JVC's new initiative is a strong weapon in the battle.

JVC will investigate any complaint about a violation of the act. "We will look for patterns and practices," says Gardner. Not every complaint will result in a lawsuit or a referral for criminal prosecution. But JVC will contact the retailer against whom the complaint was lodged. How the retailer responds and the extent of the alleged violation will determine what, if any, further steps are appropriate. The goal, she says, is to maintain industry standards as required by law and prevent unfair trade practices.

For more information, call JVC in New York City at (212) 997-2002.

Remember that awareness of the Stamping Act can be powerful marketing tool for the savvy jeweler. Remind customers gold and silver jewelry may not be what they think it is. There are good reasons why they should buy only properly marked jewelry from a reputable jeweler. Please turn the page for a suggestion on how to word signs or handouts.

William H. Donahue Jr. is an attorney practicing in New Jersey.

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