Gem scams Part 1 - India A comparison of techniques

Last Updated: 25th Jan 2019

Gem scams Part 1 - India
A comparison of techniques

In India and Thailand the hottest months of the year are approaching. The main travelling season is about to end and before long the victims of gem scams will appear on our doorsteps to sell their alleged treasures.

Interestingly enough and contrary to common belief, the greatest danger that gem buying tourists face, is not synthetics being foisted upon them. Mostly the credulous, as well as blissfully ignorant laypersons are boondoggled in respect of price and quality.

It is our thankless task to elucidate the sanguine would-be gemtraders of the fact, that they could have bought the gems for half the price at the jeweller´s around the corner. Or, equally common, that the price they paid is quite ok, but the quality so direful, that there is not a single customer to be found in the whole western hemisphere.

The selling techniques applied in India and Thailand differ substantially and are worth a closer inspection.

Let´s start in India, Rajasthan, to be exact. Jaipur, the federal states´ picturesque capital is not only a tourist magnet but also a center of India´s gem industry. Virtually every tourist boarding a taxi, autoscooter (the equivalent to Thailand´s infamous tuk-tuks) or rikshaw gets invited to the driver´s uncle´s house for tea. The supposed family home invariably turns out to be a carpet shop, jeweller or, in our case, a gemtrader´s office.

The routine is well-established since decades: the driver drags his passengers into the shop and gets a small commission for doing so. Now everything depends on the shopkeeper´s sales skills. If he succeeds in talking the tourists into buying gems, the driver gets a second, much higher commission.

The arguments brought forth are always the same. Whether the victims are luxury tourists or backpackers on a tight budget, they are promised fantastic profits of several hundred percents. The deal is presented as being completely risk-free. To drive the point home names and adresses of dealers in the respective home country are named, that will immediately scoop the gems up for at least double the price.

Sometimes the seller pretends that he and his overseas customer only need a courier who, for a hefty commission, will tax-sparingly transport the goods through customs. So the victim does not even have to buy the gems himself, he only has to deposit a substantial percentage of the grossly inflated price as security, credit cards gladly accepted…

As a matter of fact, we had people walking into our office waving our business card and declaring "I bring you your gemstones".
It seemingly does not cross the victim´s minds that gemstones can be imported duty-free, that the import turnover tax collected upon entry is a deductible input VAT for any licensed business and that transport is much cheaper done by the worlds postal services.




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