A hot-button topic in today’s diamond industry is the practice of extending credit to customers.
In several impassioned "State of the Diamond Industry" addresses, Rapaport Group Chairman Martin Rapaport said the jewelry industry cannot extend credit to customers anymore, and made clear his feelings on buying diamonds on credit (‘credit memo’).
"I’m going to blast the hell out of credit," Rapaport said before launching into his tirade. "It makes me want to throw up." He said that we simply cannot sell to people on credit anymore, and that diamonds at all levels of the trade must be sold to "real" buyers who actually have the money to pay for them.
"You need real people with real money," he said. "We can’t memo our way out of the recession."
“If you don’t have the money and are not a player we love you, but you’re not a player.”
The diamond market relies too heavily on credit to finance the jewelry sector, and hurts it when stores file for bankruptcy as happens all too frequently in today’s economy.
“Just say no to memo and encourage cash purchases”. The jewelry industry must avoid those who are not financially capable of buying stones and paying their debts.
"You don’t have money, go screw yourself. That’s the bottom line," Rapaport said, a statement that drew a hearty round of applause from the audience.
DCLA would like to help legitimate industry members protect their money and time by limiting bad payments and default debtors. As a central hub in the Australian market, DCLA is happy to verify and give good credit information to industry members.
Diamond dealers and jewellers are also welcome to call and receive information on companies or individuals having defaulted on a payment.
Also, please note that DCLA will be closing all customer credit accounts outstanding for a period greater than 60 days.