Are you sitting down? If not, pull up a chair. I’m about to tell you something that will startle you. Are you ready?
The average resale value of an engagement ring in the United States is 19.7% of the original purchase price. Yes. The typical diamond bought today will lose over 80% of its value the second you walk out of that store.
For those of you who may have had the unfortunate experience of trying to resell an engagement ring, or tried pawning a diamond ring – only to be shocked at the amount you were able to get for that jewelry even though your appraisal said it was worth 5x more – you likely knew about this already. But for those of you who have never bought an engagement ring, or a diamond before, this might come as a bit of a shocker.
Why are most engagement rings only worth a fraction of what you paid
Well, there are many reasons. Here’s a short list – most of which I see with diamonds bought from retail stores:
- The diamond is lab grown
- The diamond has poor clarity
- The diamond is laser drilled
- The diamond is treated
- The diamond is irradiated
- The diamond has poor color
- The diamond is a TLB (top light brown)
- The diamond is bleached
- The diamond is HPHT (treated with high pressure and high temperature)
- The diamond is fluorescent
- The diamond is soft graded
- The diamond isn’t correspondingly graded
- The diamond doesn’t have universal crown and pavilion angles
- The diamond is an off-make
- The diamond is warped
- The diamond is cut into an unpopular shape
- The diamond is either a heart or cushion cut
- The diamond was torqued during setting
- The diamond is a doublet
- The diamond is a hybrid
Heck, those are just 20 off the top of my head. In fact, I could probably itemize over 100 factors that can lower an engagement ring’s value, but let me make it simple to understand.
Fact: Good diamonds hold their value or appreciate in value over time.
If a diamond depreciates after purchase (about 49 out of 50 do), then it is because you bought a crummy diamond. Pure and simple.
Though numerous things can diminish the value of your diamond, you don’t have to earn a PhD in diamonds to ensure you don’t get ripped off. That’s impractical.
Pay attention to a store’s return policy. If there is only a narrow window (typically 30-90 days after purchase) to return the diamond, then know that you’re about to purchase a crummy diamond.
I’ll give you one simple rule to follow to avoid a lot of pain and regret.
Here it is.
RULE: Always make sure your diamond is 100% FULLY BONDED. Period. No exceptions.
What does that mean?
It means the jeweler 100% guarantees that, if for any reason you don’t want or need your diamond for the rest of your life, they will give you 100% of your money back. Don’t confuse a diamond that looks good to you with a diamond that looks good to an expert. Essentially, if a diamond is fully bonded, it must be good, because the jeweler is more than willing to take it back. What jeweler would buy back a diamond that lost 80% of its value for 100% of the price originally paid? It just doesn’t make sense.
Remember: good diamonds don’t have an expiration date. Good diamonds hold their value and/or appreciate in value over time.
Look – we get these sorts of questions all of the time, and I totally understand why it’s a huge challenge to figure out where to begin on picking the perfect engagement ring for your future wife. We’ve helped thousands of men just like you over the past 30 years navigate the confusing road to purchasing their engagement ring, and we’d like to do the same for you!
Click on the link below to schedule a complimentary 1 on 1 call with one of our expert gemologists to see if we can be of service to you. We look forward to helping you “wow” her soon!
This is Fred Cuellar, the Diamond Guy®. Talk to you next time.