A diamond purchase isn’t a small expense. There are many ways that you can get ripped off, whether buying from a local jeweler, online, or private party. This post will try to help you avoid common tricks, traps, and deceptions.
How can you avoid getting ripped off when you buy a diamond? There are many specific ways to protect yourself, but above all, don’t be overly trusting. You deserve to have evidence regarding the quality claims that are made about a ring that you’re prepared to spend thousands of dollars on. Any reputable seller will understand and cooperate with your request.
So, what exactly do you look for as warning signs, and ask for as meaningful substantiation of quality? We’ll dive into those specifics below—so keep reading!
What You Don’t Know Can Hurt You
I was 23 when I walked into my first jewelry store. I had no idea what I should expect to pay for a diamond engagement ring. I had no experience with gems or precious metals. I knew that cost would increase based on diamond size, but that was literally ALL I knew.
The salesman that saw me walk through the doors of store probably sized me up in seconds and thought ‘fresh meat’! I tried to play it cool…like I’d looked at hundreds of rings and knew EXACTLY what I was doing, but that was a facade that was easy to see through.
You know when someone that knows nothing about cars goes in to have their car fixed by a new mechanic and doesn’t want to seem like a sucker, so they try to fire of the little bit of car vocabulary that they know, and make it crystal clear that they have NO IDEA what they’re talking about. That was me. I had ‘sucker’ drawn on my forehead.
Because I knew nothing, and the salesman could sense it, he started pulling out rings and telling me about them. His choice of words made each ring seem like such a rare and valuable find. I was mostly worried about the overall look of the ring and the ultimate price tag (after all, I was shopping with borrowed money that day—which is a topic for another time).
I had every intention of trying to stay in a section of rings that was less expensive, but ring by ring, we moved down the display case. Each ring seemed more valuable and wiser than the last, but the cost difference wasn’t huge. He told me about inclusions and had me look through his loupe. I actually paid MORE for a diamond that had fewer/smaller inclusions—inclusions that you only see with a Loupe. In the 20 years since I bought that ring, do you know how many people have looked at my wife’s ring through a Loupe? Take a wild guess. Yep, zero!
“There’s a sucker born every minute” – PT Barnum
I bought a ring that day—at my very first store! Did I pay too much? Probably, on several levels. The really scary thing is how clueless and susceptible I was. That experience is one of the major reasons that I started this blog. I want to help you feel less like a fish out of water. I’d love for you to be someone that can confidently shop for your engagement or wedding ring, knowing that you’re going to be able to find the ring you love, get a great value, and protect yourself from dishonest players. Don’t get ripped off when you buy a diamond. Some common tactics, used by the shifty, are outlined below.
Common Diamond Scams:
There are 4 main categories that drive, or determine, diamond value. They’re commonly referred to as the 4 C’s. The categories include cut, color, clarity, and carat weight. Since each of those four areas is a driver of value, they’re also areas where dishonest sellers often try to deceive unprepared buyers.
Despite the efforts of law enforcement agencies and government watch groups like the FTC (Federal Trade Commission), we can’t be completely sheltered and protected from dishonest sellers. While agencies do their best to set and enforce guidelines that certainly help, we still live in a ‘buyer beware’ environment. The following scams are common ways that dishonest sellers often try to deceive and take advantage of unsuspecting buyers who are looking for a bargain.
Multiple color grades
Naturally colorless diamonds (those that don’t have any degree of a yellow or brown hue) are a rare find. Because they’re rare, they’re also valuable. In fact, the more colorless a diamond is, the more valuable it is. The colorlessness of diamonds is graded on an alphabetical scale that runs from ‘D’ through ‘Z’. A diamond that’s graded with a ‘D’ is perfectly colorless. An ‘E’ is slightly (almost imperceptibly) tinted. An ‘F’ is a little more tinted. As the scale continues to progress, diamonds display a progressively darker hue.
One little trick that sellers sometimes use to deceive buyers on the value of a particular diamond, is to list multiple color grades for it. For example, a ‘J’ diamond might be promoted as an ‘H, I, J’—meaning that it falls someone in the ‘H’, ‘I’, or ‘J’ portion of the color scale. No one would want to say that an H grade diamond is an ‘H, I, J’, because ‘I’ and ‘J’ are less valuable grades. Potential buyers often assume that an ‘H, I, J’ diamond is possibly an ‘H’, and therefore justify spending a premium for an inferior diamond. A diamond should really only have one letter representing its color. If you find a seller listing a range I’d suggest that you buy elsewhere. If you decide to continue looking at a diamond that has a color range listed, always base the price you’ll pay on the highest (most tinted) grade that’s listed. For instance, In our previous example, you would base what you’re willing to pay on the assumption that the diamond is a ‘J’ for color (not an ‘H’).
Lighting can make things look a lot better or worse than they might otherwise naturally appear. Any photographer can attest to that. Jewelers know it too! Light can influence your perception of color and brilliance. Because of that, you might LOVE diamond that you found in the display case of your local jeweler—it was PERFECT—until you pulled it out again to look at it when you got home. It looked like an entirely different ring! It has a yellow hue that you swear wasn’t there before.
Because lighting can distort your perception of color, you should look at diamonds in various types of lighting. It’s perfectly fine to walk over to a different corner of the store to get to a different kind of light if needed. Stand by a window if you can to get some natural light, or walk outside (with the jeweler’s permission—and company probably) if needed too. It’s a big investment, so you’re completely justified in double checking the color and brilliance of the ring in various types of light.
Selling a Diamond Simulant as a Natural Diamond
Diamond simulants are diamond impersonators. They’re look-alikes. They could be made of glass, plastic, stone, or any other non-diamond material. They may look like diamond to an untrained eye, but they don’t have the same hardness, durability, or other characteristics. Most importantly, they don’t have the same value.
Don’t get me wrong, there’s nothing wrong with buying a simulated diamond, as long as you know that’s what you’re buying and it’s priced accordingly. The problem is the deception that leaves you paying WAY more than you should for the item you’re buying.
Selling a Synthetic Diamond as a Mined Diamond
This situation is similar, but still, a bit different than what we just discussed with Simulated Diamonds. Remember simulants are look-alike diamonds. Synthetics, however, are REAL diamonds—they’re just made in a laboratory instead of excavated from the earth. What do I mean by ‘real’ diamond? I mean that synthetic (or lab created) diamonds are made entirely of carbon. They’re also visibly identical, equally hard and just as durable. Even though they are real diamonds, and look identical, no one would want to purchase a synthetic diamond at mined diamond prices, because synthetic diamonds are usually 30% to 50% less expensive.
Even though lab created diamonds look identical to mined diamonds, there are still some pretty simple ways to try and confirm the nature of what you’re thinking of buying. Here are a couple of initial options
Under 10X to 30X magnification, carefully examine the rim that runs around the girdle of the ring. That’s where labs, like GIA, will typically make an inscription on man-made stones, to make them easier to identify as such. Only stones that have been graded by them will have an inscription. If the seller has a grading report that they can make available to you, it will clearly indicate if the ring was lab grown. There are also machines that can identify whether a gem is earth-grown or lab-grown. It may be worth paying for such a test if a grading report isn’t available to confirm that info for you.
I’m hearing more common stories now about jewelers unknowingly selling lab-grown diamonds as earth-grown diamonds. Again, they’re visually indistinguishable, so it would be easy for a jeweler not to know if the wrong product is sent to him. It’s a case, where the scam is apparently happening further up the supply chain. A grading report from a reputable lab can help mitigate that risk for you. Ask to see if they have a report for the diamond.
Selling a Simulant as a Lab-Grown Diamond
Simulant stones can be represented as a lab-grown diamond too. Again, simulants aren’t diamonds in any way, shape, or form, but they do look similar (not the same—but similar). Even though lab created diamonds are substantially less expensive than mined diamonds, they’re still far more expensive than most simulated diamonds (like Cubic Zirconia). While there’s nothing wrong with CZ, for those that understand what they’re buying and pay an appropriate price, no one would want to pay lab diamond prices for a simulant type product. For example, simulants may have a value of $10 per carat, while a lab diamond, might be closer to $1800 per carat.
Weight deception comes in two main forms. The first, is approximating (or rounding up). Someone might say that a diamond is approximately 1 carat, but the cost difference between a .9 and 1-carat ring can be significant, so you’ll want to know the exact weight.
As we discussed with color, sellers would likely never approximate when the approximation doesn’t work in their favor. For instance, someone with a 1.09-carat diamond would never say that the diamond is approximately 1 carat. That would short-change them on weight, which is an important driver of value. Because of this, if a diamond is advertised as an approximate weight, please seek one specific weight measurement, and if possible, have it weighed again, in front of you—or check the grading report, from a reputable lab, for confirmation.
Sellers also use terms related to weight measurements that can sometimes be deceptive to unaware buyers. Carat Weight (CW) is a representation of how heavy (how large) a particular diamond is. Carat Total Weight (CTW) is a representation of how heavy all the combined diamonds on a given ring are. The distinction between the two numbers is important because very small diamonds are much less rare and valuable.
Very small diamonds can also look good even if their color and clarity aren’t great. They’re used for additional decoration around the larger center stone. When there are a lot of them, it can increase the CTW quite a bit. The unsavvy buyer (like I was), assumes that the CTW number represents the weight of the center stone, and could easily end up paying far more than they should for the ring. Some sellers will display both a CW and CTW, which is fine. When the CW is missing though, buyers are more prone to confusion. They often overestimate the value of a given ring with multiple tiny diamonds surrounding a larger diamond.
Not Disclosing Treatments
Using machinery, technology, substances, or processes to artificially improve the appearance of an earth mined, or a lab-created, diamond, is referred to as a ‘Treatment’ or ‘Enhancement.’ The HPHT (High-Pressure High-Temperature) process, for example, can be used to make a naturally tinted diamond more colorless. That process can be used to improve the color qualities of both earth-mined and lab-grown diamonds.
It’s important to be aware of this, because naturally colorless diamonds are far more rare, and valuable, than treated diamonds are. Because of that, enhanced diamonds will sell for less than natural stones with the same color qualities. Heat treatment can also be used to intensify the color in diamonds, making them more vibrant, and therefore, more attractive and valuable. Some of these treatments are literally impossible to detect, so manufacturers and jewelers are ethically bound to disclose them. In reality, many certainly don’t. I was visiting a big box retailer yesterday and stopped by their jewelry counter. They had signs throughout their jewelry counter stating that buyers should assume that all stones have been enhanced, unless otherwise stated, for individual rings. That was good to see, but many sellers can, and do, conceal that information in order to deceive buyers and improve profits. Awareness is helpful. You can directly ask your jeweler if individual diamonds have been ‘treated’ in any way.
For the record, there’s nothing wrong with treated, or enhanced, diamonds, as long as you’re paying a price that’s appropriate for what you’re getting. Treated diamonds are wonderful because they allow you to get a stunning ring for FAR less than a natural stone with the same qualities would cost.
Deceptive Grading Reports
I’ve referenced certificates, or grading reports, several times. Certificates from well known and established (reputable) laboratories can substantiate claims about a particular diamond and provide peace of mind, but you still have to be cautious with grading reports. There are two common ways that grading reports can be used in scams.
- Fake grading reports are sometimes provided. These bogus reports might have the appearance of being from GIA or another quality lab. If you base your buying decision on a fake report, you’re sure to lose significant money on the transaction.
- Real reports are produced, but they’re from garbage laboratories that can’t be trusted. There are unscrupulous labs that are almost like mail-order degree mills for college students that want to buy a degree without cracking a book. These dishonest laboratories provide a very nice looking certificate that can report exaggerated or completely false quality data on the diamonds they issue reports for.
When it comes to grading reports, you have to consider the source. These reports can be incredibly helpful, or garbage, depending on where they come from. We’ll share a list of the most trustworthy labs below. Avoid putting much weight in reports from other organizations.
We’ve all been drawn into stores because they advertise liquidations or huge sales. They may say they’re having the sale because they’re going out of business, moving, over-stocked, because there’s a holiday, or any other reason. They list a really high retail price and then a huge limited time discount.
Our defenses are weakened by the fear of missing out. You may buy a ring because sales psychology predictably worked as the jeweler thought it would, and a sense of scarcity drove you to act ‘before it’s too late.’
As the saying goes…
‘if something ‘looks too good to be true, it probably is.’ -Unknown
In reality, retailers often mark their inventory up, so they can mark it down. In other words, they list an unreasonable retail price (something no one would ever really think of paying as the everyday price, and then claim to discount to a lower price that’s typically pretty close to normal retail (sometimes the sale price is still quite a bit more than the object is actually worth).
Rather than shopping with the sellers that have sensational sales, you’ll probably be far better off, dealing with reputable retailers (online or offline) that post fair prices all the time. There’s nothing wrong with a sale, but when you see extremes or sales look a little gimmicky, proceed with extreme caution.
Diamond Switch Outs
Most jewelers are certainly honest, but ‘an ounce of prevention is worth a pound of cure.’ Having said that, it’s very possible for jewelers to swap out your diamond for another stone, and in most cases, you probably wouldn’t notice. There are two ways that this scam can take place. The first, happens when you drop your ring off for repair work, or to be cleaned, they simply remove your diamond and replace it with a less valuable man-made diamond of similar size, or a high-quality diamond simulant.
CBS News reported on an allegation made by MANY customers of one large jewelry chain that claim to have had their diamond switched out for a different stone (like Moissanite) when they take it in for cleaning or repair work.
The other way that swap-outs can occur, is that jewelers show you loose diamonds. Once you select the one that you want, the jeweler quickly swaps it with a similar looking diamond of lesser quality before mounting the diamond to increase their profit margin on the ring. They know that making slight adjustments to color quality, inclusions, or size, are unlikely to be noticed or challenged.
So what’s the solution to switch outs (stealing your diamond)? It’s to have the jeweler map out your diamond on a piece of paper, showing the location, and type, of each one. Inclusions are fairly unique. If a swap out happens, the map they drew is your proof that you dropped off a different ring than they returned to you. An honest jeweler will understand, and won’t mind giving you this additional confidence that you’ll get your original diamond back. A dishonest jeweler will be put on notice that you’re not an easy target, and won’t be worth the risk.
We’ve discussed ways that unethical jewelers can deceive customers and take advantage, but please understand that most of the tactics addressed above can be used by businesses or individuals. Buying a used diamond ring from a local seller can potentially save you a lot of money if you’re very careful with what you buy. Just realize that there are two very real dangers with placing too much trust in what the seller tells you.
- They could be dishonest and trying to take advantage—so be careful. We’ll talk about specific ways that you can protect yourself below.
- They may be honest but misinformed—which could still be bad news for you if you place too much trust in what you’re told about the ‘diamond.’ If someone was given a Moissanite engagement ring, but they were lead to believe that it’s a diamond engagement ring, they may honestly believe that’s true. They aren’t trying to take advantage, and wouldn’t want to lie about the stone if they knew differently. This is an example of where honest people can unintentionally mislead us on the value of a ‘diamond’ they’re selling. The good news, is that there are ways that you can protect yourself from these situations, and any of the others outlined above.
How to protect yourself
Hopefully, the common scams outlined above only have you worried enough to exercise caution and take steps to protect yourself. You can navigate these waters safely if you’re cautious. What specific steps can you take though, to protect yourself from falling victim to these common scams and countless variations? Here are some initial options:
Become a Skeptic
Above all else, you need to make sure that you’re not too trusting. When you accept what others say without questioning it, you become an easy target. When you have a healthy level of skepticism, you ask tough questions in order to verify the information that’s been shared with you. Questioning helps you avoid time wasters, so you can find the right ring faster and avoid many pitfalls along the way.
Check the Grading Report
Whether you’re buying from a jeweler or through a private party, you should probably insist on grading report from a well established, known, and trustworthy laboratory. Here’s a list of the labs that could fit into that category:
- GIA (Gemological Institute of America)
- IGI (International Gemological Institute)
- AGS (American Gem Society)
- GSI (Gemological Science International)
- HRD (Hoge Raad voor Diamant)
- EGL (European Gemological Laboratory)
Of all the labs listed above, GIA is the one that’s the most known and trusted, they’re the gold standard in the industry.
As I mentioned above, SEEING a report is only the first step. Validation of the report is a critical second step. The certificates that most labs issue have security features in the paper like holograms and micro-print lines that can help you determine authenticity. You also have the ability to look up certificates through the websites of these labs to verify the information contained on the report that was shown to you. If you can’t find the report through their search feature, you could call the lab for further assistance. If they still aren’t able to find evidence of the report on their end, you should walk away from the transaction—the provided report is probably counterfeit.
Look for signs of reliability
You’re always going to be safest buying from well-established companies that have forged a solid reputation for honesty and quality over many years. Especially when you’re dealing with a company that’s new to you (one that you don’t know much about), it’s a good idea to check their reputation online.
This is a fairly easy process that shouldn’t take a great deal of time, but can provide you with a lot of comfort and reassurance both before and after your transaction. The BBB (Better Business Bureau) and the FTC are two great places to start your research. Searching company reviews through Google, Yelp, and Facebook can also be incredibly insightful. Not all complaints should cause major concern, but complaints that illustrate a pattern of dishonesty should be taken incredibly seriously.
Look for a Money-back Guarantee
Nothing instills more confidence that a retailer is selling a quality product, than when they stand behind it with a money-back guarantee. Not all companies offer one, but I’d certainly favor those that do. In other words, not offering a money-back guarantee isn’t an indication that a company is crooked, but offering one can be an additional positive signal that a retailer is operating honestly—as long as the retailer is established and has a reputation that you can rely on.
Pay with a Credit Card
Pay with a major credit card, even if you have all the money you need to buy the ring with cash. It’s not about reserving your cash, and certainly isn’t about getting a bigger ring than you could afford to purchase outright—it’s fraud insurance. If you purchase the ‘diamond’ with a major credit card, and then soon after discover that it isn’t really a diamond, for example, you might be able to dispute the charge with your credit card provider to get your money back. The same is true if you order online and your package never arrives.
If you paid cash for the same ring, you’re probably going get stuck with an expensive lesson. It’s probably going to be tough to get your cash back. You only real course of action would be a lawsuit, but that takes time, money, and a solid case. You may, or may not, have a solid case in the eyes of the judge, but it’s a huge hassle and it’s going to take a long time to see through. Even if you win the lawsuit, you aren’t home free, you just move into another painful phase of the process—collecting on a judgment. The kind of deadbeat that would lie to you in order to sell some cheap simulant as a diamond, is probably going to be shifty and difficult to collect from. Even if you win a judgment, you may never see money from the award. I’ve been down that road before myself. Won a judgment, but even professional collectors, I was unable to collect on it. For all those reasons, I strongly advise that you pay with plastic!
Why Do Diamonds Cost So Much?
Diamonds remain expensive because of market manipulation, not natural scarcity. High prices mean healthier profit margins for suppliers, but they also help diamonds maintain links to social status that drives additional demand. That status based demand would dissipate if everyone could easily afford them.
Do Diamonds Appreciate in Value?
The diamonds used in engagement rings, and wedding rings, typically don’t appreciate enough to provide a return, especially after inflation. They’re too small. Diamonds bought for these applications shouldn’t be thought of as ‘investments’. When this type of diamond is resold, it’s typically done at a loss.
Are Diamonds Unethical?
Diamonds aren’t inherently unethical. If you’re concerned about unknowingly buying a Blood Diamond, the environmental impact of mining, or involvement of child labor, a lab-grown diamond could be a solution. They provide all the beauty and durability with a lower financial, environmental, and social cost.