If there’s one thing you can find at warehouse clubs like Costco, it’s good deals. But, as it turns out, some of those deals might be too good.
After selling nearly 2,500 diamond engagement rings using the Tiffany name, Costco has been ordered by a federal judge to pay $19.4 million. Costco had already been ordered to pay $8.25 million in punitive damages, but U.S. District Judge Laura Taylor Swain says that wasn’t enough.
The store now owes Tiffany’s an additional $11.1 million, plus interest, which is three times Tiffany’s lost profit from the sale of falsely identified rings at Costco.
Management for Costco “displayed at best a cavalier attitude toward Costco’s use of the Tiffany name in conjunction with ring sales and marketing,” Swain wrote in her opinion.
A jury verdict in 2015 awarded Tiffany’s $5.5 in Costco profits, but Swain reduced that amount. Instead, they were ordered to pay $3.7 million from the rings after unsuccessfully trying to dismiss the case, saying the word “Tiffany” was in reference to the ring’s setting and was now a generic term. (Think: Popsicle or Kleenex.)
Costco is also barred from marketing or labeling rings as “Tiffany” products unless it also includes the words “set,” “style” or “setting”.
With the amount of profits made from these rings, it’s pretty safe to say a lot of people thought they were indeed getting a Tiffany ring. So, how can you spot a fake?
First off, it should be known that the diamonds in this case were real, they just weren’t Tiffany rings. Nevertheless, if you’re shopping for a ring, it’s important to know what to look for. This guide from Diamonds.com offers a few tips on how to spot a faker.
When looking for a ring, be sure to check the setting and mount. A real diamond will only be set in high quality jewelry (like white gold or platinum). You can look inside the ring’s center for markings to see what type of gold was used. (FYI: “C.Z” means the gemstone is cubic zirconia – not diamond.)
If you’ve already purchased the ring, try the water or fog test to see what you’ve got. You can also check it for sparkle by holding it under a lamp and seeing how the light reflects off the stone.
By the way, the lowest priced ‘Tiffany style’ engagement ring on Tiffany’s website right now is about $12,000. A search for “Tiffany” on Costco’s website shows no results.