Peter Yantzer helped change the diamond business by making it focus on the role cut played in a diamond’s beauty. Yantzer, a Robert M. Shipley Award winner, retired last week after two decades as executive director of the American Gem Society Laboratories. In this frank interview, he talks about how the industry should respond to synthetics, the problem of different lab standards, and whether consumers can really tell the difference between the D and E grades.
JCK: Anything you are really proud of over your tenure?
Peter Yantzer: Two things. I’m really proud of being part of the team that turned AGS lab into a top-tier diamond-grading laboratory. It really helped that we had the AGS name behind us, of course.
The thing I’m proudest of is developing the cut grade system. I said you can’t grade a princess cut the way you grade a round. You can’t use Tolkowsky proportions on a princess cut. Why don’t we do a system that can do a cut grade for any kind of diamond? Ten, 11 years later, our system is still leading edge. I remember after we introduced it, at the Vancouver Conclave, everyone was calling me a scientist. I am not a scientist. I’m just a guy.
JCK: Do you think that the AGS cut grade improved the quality of make in the industry?
Yantzer: What we did absolutely improved the quality of cutting in the diamond industry. We kept the zero cut grade at a really high standard. We introduced some factors into our system like weight ratio that plugged the hole of cutters killing fine makes by dinging the upper half so they could save on weight. At first it was hard for a lot of the cutters. We had to hold their hands for a long time.
I had worked at GIA [in the 1980s] when a 1 ct. D flawless was selling for $60,000 a carat. But no one knew anything about makes. You saw some horrible makes, but the report said D flawless, so it sold for a lot of money.
A better-cut diamond is a better-looking diamond. That is my professional and personal opinion.
JCK: Over your tenure, we have seen a lot of issues come up in synthetics and treatments. How do you see that playing out?
Yantzer: The colored gemstone industry has had to worry about treatments for a long time. It wasn’t until the Pegasus HPHT treatment was introduced, which was the start of people doing all these weird things to diamonds. That has made us all more reactive.
GIA had that issue with diamonds being coated. But you don’t hear a word about that now. It just kind of died. I see a lot of people with their heads in the sand. The whole synthetic world is going to change the diamond world tremendously. I think the millennials are more in tune with it. They are more inclined to accept it. At the last JCK show we had people looking for synthetics mainly from the [ethical standpoint], not necessarily for the price. There is something going on out there.
Ten years ago, everyone was petrified about the Internet and worried that people would be out of business. But they just wanted to deny that it existed and hoped it would go away. I would not like to see the industry get into that mind-set with synthetic diamonds. We have to start thinking about how we integrate them into the industry. I see that the Mumbai bourse banned trading in synthetics. What’s that about?
JCK: Another issue that has come up is different lab standards.
Yantzer: For a while to see what was going on I would go to Polygon, RapNet, and I would look at the stones that were listed. The market is really smart. The market knows how to price the goods. I would look at stones with the same grade and with one report they would be priced at Rap minus 14 percent, and another report would be priced at Rap minus 70 percent. What that says, just based on the asking prices, is that certain labs were not grading straight. These labs were either incompetent or sweet grading. So that is when I came up with the idea of an index. Rapaport now uses it in his JCK show forums on lab issues. The unfortunate thing is the consumer doesn’t have access to this information.
For a long time, this issue was like the skeleton in the industry’s closet. People just hoped it would go away. Now it has kind of come to a head, and the industry is trying to address it. But it’s a complex issue, and there is no easy fix.
Consumers are becoming better educated. That is only going to increase. They are writing software, they are writing apps. They will write apps that will compare diamond qualities and spit it out on their phones. I can see that coming. I also believe that AGS will prosper because of it. We have always held to our standards, and people can count on our grading.
JCK: A while ago I wrote about the need for a new diamond grading system. Do you agree with that?
Yantzer: It’s something we have talked about. Six of the top 10 clarity grades are not eye visible, so why would anybody care? You look at D versus E color, there is not anybody on the planet who they can tell the difference by just looking at it, particularly if it’s in a mounting. I understand that people are willing to pay more for the absolute best. But should that range of value be so significant?
The lower clarity grades in the existing system are weak. You can have SI2s that look better than SI1s. Do those grades really communicate the desirability of the stone? I think not.
You could probably break the color grades into four instead of 10. You could have DEF, GHI, JKLs, and then after that it would be yellow. You could knock the clarity grading system down to about five grades, too. You could say this is an “eye-clean” stone and then very slightly included, very included. That is where the bulk of the market is anyway.
I have been playing around for that idea for a long time. Nobody will bite, but maybe someday they will.
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