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IDEX guarantees diamond transactions

By Michelle Graff
June 02, 2008

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Las Vegas—The Tel Aviv, Israel-based International Diamond Exchange (IDEX) has launched a new program that guarantees diamond transactions, the company announced last week at the JCK jewelry show in Las Vegas.

IDEX Online Group Chief Executive Officer Abraham Stern said the new program, called Guaranteed Diamond Transactions, allows two parties to exchange a stone without ever exchanging a word, while at the same time, knowing that they are going to get what they paid for.

For a $25 transaction fee, Stern said IDEX Online will guarantee to the buyer the stone's availability, authenticity and door-to-door delivery.

He said authenticity is verified using a neutral lab that checks objective qualities of the stone, including carat size and angles, to ensure it is the same stone agreed upon for the transaction.

The grader in the transaction does not offer a second opinion on clarity or color.

To the seller, IDEX Online guarantees an immediate cash payment.

Stern said guaranteed diamond transactions start when a buyer finds a desirable diamond in IDEX Online's online databank. The buyer then has two options: to either buy the stone outright or to bid on it.

If the buyer chooses to purchase the stone for the listed price, then IDEX Online takes over, withdrawing the money from the buyer's bank account and placing it in a holding account until the stone is collected from the seller. After verification, IDEX Online ensures the delivery of the stone to the buyer, who then signs for it, completing the transaction. It is at this point that the funds are transferred into the seller's account.

If the buyer chooses to bid on the stone, however, then that bid, along with other bids, show up online, and the seller can choose to accept one of those bids or simply keep the stone up for sale until he gets what he considers a suitable price.

Stern said guaranteed transactions—which involve the exchange of cash, no memo allowed—are not meant to be a way to buy and sell diamonds all the time but rather a solution that fits certain situations, such as when a buyer completely trusts the seller and is confident in the stone they're purchasing.

Once a buyer signs for the stone in a guaranteed diamond transaction, there is no option to return the diamond.

"It's definitely a solution that fits for only specific situations," he said.

Guaranteed Diamond Transactions are currently available to those buying or selling in Antwerp, Belgium; Mumbai, India; Tel Aviv, Israel; and the United States, with plans to expand the service to Hong Kong and Russia, Stern said.

While access to the Guaranteed Diamond Transactions is limited to IDEX Online subscribers, IDEX Online is currently offering a free one-year subscription to those who want to sample the new service.
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