Hidden camera reveals false claims some retailers make during diamond sales

While shopping undercover at some of Canada's top jewellers, Marketplace journalists came across sales pitches filled with false claims and inconsistent diamond grading reports, all of which could lead consumers to question whether they got what they paid for.

Last year, Canadians who purchased a diamond ring spent on average just over $4,300, according to Edahn Golan Diamond Research & Data Ltd. Marketplace journalists posed as secret shoppers to capture the sales pitch on hidden camera at three of Canada's most popular value retail jewelry chains: Peoples Jewellers, Ben Moss Jewellers, and Michael Hill, visiting three locations for each retailer in Ontario and Alberta. 

Each store sold diamond rings backed by grading reports with specifications for each of the so-called four Cs — cut, colour, clarity and carat. Employees often touted these documents as ironclad, with very rare discrepancies.

"Maybe one in maybe 100 cases … a colour might be off slightly," said a sales representative at a Michael Hill location.

However, industry experts say that's not the case, and inconsistencies can be found between reports provided by different grading labs, which can have significant impacts on a diamond's independent appraisal value.

"Any one of the features can make anywhere from 20 to 30 to 40 per cent difference," said Steve Knight, a Hamilton, Ont., appraiser who's been valuating gems for over 20 years.

WATCH | Diamonds lose hundreds of dollars in value when graded at another lab:

Marketplace purchased a ring from each of the retailers, each with a grading report indicating the diamond's quality. The rings were then sent to a different lab, the Gemological Institute of America (GIA), to see how their grades compared to the report provided in store. GIA designed the original grading system for diamonds in the 1950s that other labs model their methodologies on. 

According to the reports they were sold with, the diamonds Marketplace purchased were each under a carat and "SI2" or "slightly included" in clarity, meaning they should have no visible internal flaws or "inclusions" without magnification. 

After they were re-graded by GIA, the rings were taken to Knight to consider the value difference between the two reports. 

Knight did two appraisals for each ring, first considering the grades on the reports sold with the rings and then with the re-grades from GIA. Even though the specs were relatively close, key inconsistencies led to some significant value differences. 

Michael Hill's grades went slightly up in colour and down in cut, but the clarity was consistent so the ring was ultimately appraised with little difference in value — $130 more. 

But variations between the grading reports for the Peoples ring meant it dropped $915 in value, or 23 per cent. The Ben Moss ring also dropped by $860, or 19 per cent.

The biggest factor in the drop in value was the difference in clarity grades for both rings. Those rings went from having minor inclusions to having ones that could be visible, which may affect the diamond's transparency and brilliance.