Most consumers are stunned upon learning their diamond’s resale value. Our perception is often misled by inflated retail prices and other assumptions. Many of us expect diamonds to be worth exactly what we paid for them! But that is never the case. It’s typically worth only a fraction of the retail price as you can see in the chart below.
Retail prices and insurance appraisals have absolutely no bearing on the market value of a diamond. With a deeper understanding of the market and factors that go into pricing, you can have more practical expectations. This way you won’t feel blindsided by your offer.
Understanding the chart above
First of all, these numbers are estimates. There are many factors that affect the value of your stone.
Retail Price: This represents the figure you’ll encounter when stepping into a traditional brick-and-mortar jewelry store. If you’re strolling through your local mall or visiting a nearby jeweler, this is the rate that will typically greet your eye.
Craigslist / E-Bay: When navigating the terrain of peer-to-peer selling platforms like Craigslist, this is the ballpark you’ll find for diamond transactions. While there are online options, they often deduct an extra 20% commission for diamond sales. It’s important to exercise caution, especially when dealing with high-value diamonds, to ensure both physical safety and protection against potential deception when engaging in direct transactions with individuals.
Diamond Buyer no certificate: If you decide to part ways with your diamond and opt to sell it to an online diamond buyer, this is the valuation you can anticipate if your stone is not certified. Certified stones will always fetch more than non-certified diamonds.
Diamond Buyer GIA certificate: This is the price range that diamond buyers would typically pay for diamonds that are GIA certified. If your stone is not certified by GIA, but has a different Lab certification, the average price it will fetch will be a little lower than listed above. GIA is the standard lab, and other grading labs tend to be more lenient in their appraisals, leading to inflated color or clarity. This is why sellers typically use other labs, because they know they will get a higher grading report, even though it is not accurate.
How is diamond value determined?
The value of a diamond is based solely on its quality in various categories. In their assessment, the appraiser will consider what are commonly called the “4 C’s” of diamonds listed below.
However, these are not the only factors as symmetry, fluorescence, shape and market trends also play a role.
- Carat: The weight of the diamond, measured in carats.
- Cut: The shape and faceting of the diamond. The uniqueness, trendiness, and sparkle of the diamond play a role in how desirable (and therefore valuable) it will be on the diamond market.
- Color: The hue and richness of the stonee (white, yellow, pink, etc.). As with cut, consumer trends in colored diamonds affect value.
- Clarity: How many flaws are in the stone, measured by how clear or cloudy it is. A clearer stone means fewer flaws and a higher price.
Why is there a discrepancy between retail and resale?
- Brand names retailers have a cost of their own
Household diamond companies like Kay Jewelers, Jarred’s, Zales, and even Blue Nile have established names that people associate with quality (regardless of whether that association is accurate). They aren’t afraid to capitalize on their prestige to cover huge overheard storefront and marketing costs and make a profit. Often retailers mark up the cost of a stone by as much as 10X the value. Meaning a stone that they paid $400.00 is being sold to you for $3,200.00. If you purchased your stone at a mall retail outlet, you may be surprised upon learning the true value.1 - The market fluctuates over time.
Again, it’s hard to say how much your diamond will be worth at the moment of sale until you have a buyer’s offer. Fortune just released an article outlining how the natural diamond market is being undercut by the lab grown diamond business. Since lab grown diamonds are much cheaper to buy, it’s driving the demand for natural stones down, which in turn is diminishing the value.
Professional appraisal from an experienced buyer is the best way to get an accurate market value.
Insurance appraisals vs. Resale value
The value determined by an insurer does not represent the value of your stone. It is a replacement value. During an insurance appraisal, the appraiser is evaluating how much costs to replace the item. Because you are paying the insurance company for that protection, the more inflated the dollar amount, the larger the premium they can charge (which also makes you feel safer). For this reason, it is standard for insurance companies to exaggerate an item’s value. They only have to replace it, if it’s lost or stolen.
A resale appraisal, on the other hand, is based on the current market value of the diamond and factors in depreciation. The market prices are set by the Rapaport Report — this is the industry standard.
Good News
Although it’s important to manage expectations with regard to diamond resale values, you’re still recouping money on something you no longer want. Even chipped or fractured diamonds retain value.
Diamonds USA will work hard to get you the fairest, most accurate offer for your stones. And if for any reason you’re not satisfied, or you don’t understand how the offer amount came about — we’re available to walk you through the appraisal. And we can always send your diamonds back to you free of charge.
If you have further questions about our assessments or the value of your diamonds, email us or call us at 1-866-300-5181.
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