Spinel is an attractive and historically important gemstone which most typically occurs in red or pink but can also be found in blue to mauve, dark green, brown and black. Many Rubies including some which belonged to crown jewel collections were later found to actually be Spinels the most well known of which was the Black Prince's Ruby in the British Imperial State Crown.
For many years all red gemstones were referred to as Spinels and it was only quite recently that the rarer Ruby has been differentiated from the more common Spinel. The two can be distinguished on the basis of hardness and density namely that a Ruby is slightly harder and denser. Spinel is 7.5 to 8 on Mohs scale of mineral hardness whilst the Ruby is 9.
The misidentification is meaningless in terms of the value as both carry a considerable amount of value and are priceless based on their history, carat weight and pedigree.
In situations where there is a concern over security, Rubies are known to be substituted for Spinels in much the same way that Diamonds are substituted by Cubic Zirconia. Although still valuable, Spinel is unlikely to be quite as valuable as a Ruby.
Further reading:
Spinel
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