Jewelry & Art

Published on February 15th, 2013

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Tiffany Accuses Costco of Selling Knockoff Rings

UPDATE 1/18/18: A federal judge has ordered Costco to pay Tiffany $19 million for promoting and selling about 2,500 “Tiffany” rings that weren’t actually Tiffany rings, the Washington Post reports. Costco made $3.7 million selling what Tiffany described in a 2013 lawsuit as knockoffs. Costco had argued that signs in stores used Tiffany as a generic term to describe a particular type of ring setting and that most consumers understood that they weren’t actually buying a Tiffany branded engagement ring.

A Costco store in Huntington Beach, Calif. sold diamond rings promoted as Tiffany rings for a steep discount, making them seem like a real steal (or a slightly-less-heart-stopping expense, depending on your perspective). But they weren’t Tiffany rings at all, according to a federal lawsuit filed in New York by Tiffany & Co.

A Tiffany spokeswoman said that Costco was selling a ring promoted as a Tiffany for $6,400, but the cheapest diamond Tiffany sells is $11,000.

A suspicious customer alerted Tiffany to the promotions in November 2012. The consumer complained to Tiffany that she was disappointed to observe that Costco was offering for sale what was promoted in signs as Tiffany engagement rings at the Huntington Beach store, according to the suit. Tiffany, which only sells jewelry through its own stores, launched an investigation, which found that the Costco diamonds did not have the laser inscription that Tiffany always uses, thus confirming that the rings were not authentic.

Costco removed the signs from the store in December, according to the suit.

In a statement, Jeffrey Mitchell, Tiffany’s counsel in the case, said:

We now know that there are at least hundreds if not thousands of Costco members who think they bought a Tiffany engagement ring at Costco, which they didn’t. Costco knew what it was doing when it used the Tiffany trademark to sell rings that had nothing to do with Tiffany.

Costco CEO Craig Jelinek reportedly said in an internal company e-mail that the “Tiffany” description was intended to indicate a setting style, not a particular brand of ring. Jelinek said,

In retrospect, it would have been better had we not used that description the way we did. Still, we do not believe that any of our members believed they were buying a Tiffany-brand ring. If any of our members were confused, under our company protocol and our long-standing Membership Satisfaction Policy, they can obtain a full refund at any time.

As romantic as an engagement ring from the largest warehouse club in the U.S. sounds, maybe it’s best to stick to industrial-sized containers of cheese puffs.  Now those are a symbol of everlasting love.

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