Fools' gems form where there once were (or may still exist) elemental/magical energies of high purity. Completely colourless in its natural form, these gems will ‘acquire’ colour according to the nature of the energies within a radius of 50 ft from them. Hence, depending on the locale at which they are discovered, they may be mistaken for a range of gems including ruby, turquoise, malachite etc. In particular, they may appear to be so like a real gem that even an experienced jeweler cannot tell these apart from real gems. Magical spells also do not help in detecting fools' gems since they do not store any of the energeis that cause the colour change.
The colour of fools’ gems hinge on the continued presence of energies of high purity. It often takes between 50 to 100 years for these to take on any colour at all. Moreover, gems which have been exposed to such energies for longer are always of a relatively darker shade.
Once removed from the site of discovery, fools' gems gradually revert back to its natural colour. Depending on the shade of the gem, it takes about 6 months to 1 year before the gem completely "loses" its colour.
PCs might find some of these 'gems' while exploring ruins and other such locales. It may be that when they arrive at the jeweler or not long after they sell these to the jeweler, these 'gems' revert back to their natural colour. Either mistrust between party members, a chase for the 'culprit who switched the gems' (may be a too friendly innkeeper, a sneaky looking individual met along the way etc.) goes on or a looming trial over fraud occurs.