Diamond Shopping During a Pandemic
From groceries, to everyday supplies, there is no denying that online purchases have saved the day amid this pandemic, and rightfully so. This uptick in online purchasing has recently brought to light the question of whether buying a diamond online is a smart move, and if not, why? We’re here to answer that question and explain why you may want to think twice before adding that diamond to your online cart and book your in person appointment with a trusted retailer instead.
Did you know that diamonds with the same GIA grade can greatly differ in quality and in price? To understand how this is possible, it’s important to first remember that a GIA certificate is still an educated option. Basically these reports have a list of caveats protecting the grading authority from legal action resulting from inaccuracy.
But why the inaccuracy? Well, we’re glad you asked. The general rule applied to grade intolerance in diamond reports, ie) GIA, is one grade for both color and clarity. This means that a 1 carat diamond graded as a G SI1, may vary in color from F, (the top end of the grading scale), to an H, the bottom end.
Similarly, the SI1 clarity rating may vary from VS2 at the top end, to SI2 at the bottom. As you might imagine, this range in a G SI1 diamond can create quite the quality and pricing difference, a 56% price difference to be exact.
This example demonstrates that two different diamonds, with the same grading, can reflect two very different prices while still being graded with accepted international standards. Without the help of a professional diamond retailer, it’s almost impossible to determine accurate quality and cost.
Color and clarity tolerance can account for very different levels in price when comparing diamonds in stores or on a website. Color and clarity grading is not exact science, the grading is subjective. The only part of diamond grading that is absolutely objective is diamond weight.
Now, GIA cut grading is considering the industry standard, with the highest being a triple Excellent cut. This takes into consideration cut or proportion, polish, symmetry and fluorescence.
Likewise, there is no universal sliding scale that can calculate a diamond's diminished value due to cut and polish differences.
What about fancy cut diamonds?
Clarity and color grading are treated the same with fancy shaped diamonds such as pear and heart shaped, as they are with brilliant. The difference is the cut of a fancy shape diamond is more subjective. GIA does not assign cut grades to fancy shaped diamonds because they’re are too many variables to consider. Instead they are inspected to see how pleasing they are to the naked eye. They lose value if they are misshapen, too long, too short, too deep or too shallow. All of which will result in a lack of brilliance.
Diamonds have value in terms of cash money, and obviously a strictly graded diamond is more valuable than a poorly rated diamond. There is always a reason why one diamond is less expensive than another. More often than not, potential buyers believe the difference in price is due to retail margins, however the most common reason for price inequality is diamond inequality. Be sure you’re asking these important questions to any diamond retailer you work with.
The most important thing to consider is to buy the diamond and the dealer, not just the diamond report. Diamond reports do not assign dollar amounts, they only describe diamond characteristics. Remember, no two diamonds are alike, and strictly graded diamonds provide more value and are worth every extra penny.
At La Bijouterie, we take a personalized 1:1 in-person appointment approach. We adopted this way of conducting business over 6 years ago because it allows us to educate the potential buyer and it has proven to be most successful. Now more than ever, customers are seeing the value of dedicated and uninterrupted appointments. It’s a time to ask questions and express any concerns you may have.
Interested in setting up a Phase I appointment? You can do so here. To learn more about the “Reasons To Think Twice Before Purchasing a Diamond Online,” click here. Want to learn about the 4 C’s of Diamond purchasing, click here. As always, reach out to us with any questions you may have. We love hearing from you!
How A New Tax Law is Impacting Online Diamonds Retailers
Thinking about purchasing a diamond through an online retailer? Well you might want check out the new tax law that just passed before doing so. As of December 1, 2018, online retailers will need to begin collecting and remitting sales tax for online orders placed by consumers.
This new mandate comes from the U.S. Supreme Court’s decision this past June 2018, in the legal battle betweenSouth Dakota v. Wayfair. The outcome will have a major impact on many online retailers. Money-starved states are gearing up to require online retailers to collect and remit sales taxes on purchases made by residents—a skill only about one-third of the largest online retailers have in place for all 45 states where there is a sales tax, according to exclusiveInternet Retailer research.
According toJason Brewer, Executive Vice President, Communications and State Affairs at the Retail Industry Leaders Association, “In putting new online sales tax laws into effect, the states are reclaiming their authority over sales tax collection. States, in their own way, are implementing either via regulation or statute what they need to promote or compel sellers to comply.”
But not to worry- you didn’t lose your opportunity to purchase a reasonably priced diamond. As a matter of fact, it’s an all too common misconception that purchasing a diamond online is cheaper than ordering one through a brick and mortar retailer. This misconception stemmed mostly from the lack of sales tax for online purchases. The truth is, there’s a lot more to consider than just the listed price on the website. Check out our recently blog post titled:5 Reasons to Think Twice Before Purchasing a Diamond Online to understand why.
At La Bijouterie, our goal is to find a diamond that makes sense for you. There is no hard upsell, and we often shy customers away from buying more expensive diamonds if they’re not the best value.Curious to learn more?Book an appointment today and check out our reviews onYelp. We’re here to help!
The True Value of a Man-Made “Diamond”
History has a funny way of repeating itself, and the man-made diamond industry is no exception. If you’re familiar with the simple rules of supply and demand, then you understand that as supply goes up, demand goes down. Applying this same rule to man-made diamonds, you can quickly understand why it will be hard for them to maintain their long term value.
From the Experts
But don’t just take our word for it, on Dec. 21, 2018, a Reutersreport quoted analyst Paul Zimnisky as saying lab diamond prices had softened considerably. Another report fromBain & Co. stated the “Production of lab-grown diamonds has risen dramatically and will continue to do so, though their prices will likely continue to fall.”
This report mentions that “It costs $300–$500 per ct. to produce a CVD lab-grown diamond, compared with $4,000 per ct. in 2008, and calculates that the retail price of gem-quality lab-grown diamonds has fallen by about half in the past two years, while wholesale prices have fallen threefold. It forecasts that trend will continue as efficiencies increase, new competitors enter the market, and the product gets “commoditized.”
As the manufacturing technology for these lab-made diamonds improves, the stones’ prices will decrease. One jeweler remembers when cubic zirconia was $800 per ct. Created gems are, like created diamonds, chemically the same as their mined counterparts. But their values are very different. Unlike the earth, which has a limited supply of diamonds, factories can mass-produce these stones, and that will drive prices down in the long run. (JCK)
Held to the Same Standards
If these man-man diamond resellers are selling their goods as diamonds, or, put another way, if man-made diamonds we’re true diamonds, then they should: (JCK)
- Be under the Patriot Act: Under the Patriot Act, dealers who sell more than $50,000 in precious stones, gems, and jewelry are required to maintain an anti–money laundering (AML) program and conduct appropriate due diligence, including fully identifying business partners and monitoring transactions.
- Disclose information about the specific location: where the diamonds are produced
- Disclose the treatment that was required:It’s no secret that an overwhelming majority of lab-grown diamonds are treated by either electron irradiation or high-pressure, high-temperature (HPHT). (UPDATE: Some commenters disagree with the phrase “overwhelming majority.”)
- Disclose whether some stones in a piece are natural: Some consumers clearly prefer man-made gems. They shouldn’t buy mined diamonds believing they are lab-grown, and vice versa.
But What About the Environment?
There is a common misconception that lab made diamonds are more eco-friendly. You see in order for a lab made diamonds to be created, it actually involves more chemicals and electricity consumption and is worse for the environment than those that are naturally occurring. Not to mention unregulated laborers. This topic rarely touches on the other side- the communities in Africa that heavily rely on the diamond business for their wellbeing - it is often their family business. “Tens of millions of people rely on the diamond industry for income, among them the poorest people on earth trying to make an honest living. There are an estimated 1.5 million artisanal miners digging for diamonds in Africa, and they support another 7 million people with their earnings. Advocating synthetics as an ethical substitute for natural diamonds threatens the livelihood of those diggers.” (Rapaport)
Ethically Sourced Only
At La Bijouterie, we never work with conflict diamonds. We strictly work with ethically sourced GIA certified diamonds, and you will receive a GIA certificate and appraisal with your jewel. We’ve worked in the diamond wholesale business for generations and only work with trusted and ethical sources.
If you are against buying diamonds, or perhaps a diamond is simply not in your repertoire of jewelry taste, then you may enjoy looking at a sapphire, emerald, ruby, or other colored diamond gems. We are happy to walk you through our selection of precious stones to help you find the one that speaks to you.
At La Bijouterie, it has always been our primary goal to help customers start their journey to marriage with a wise diamond purchase- creating a tangible symbol of their love, and a ring that makes sense financially. After generations in the diamond business, one thing is certain. If we cared more about our profit margins than our customers and our integrity, we would sell man-made diamonds, as the sell price to actual cost ratio is much greater than the profit made on the sale of a diamond. But this is not what our company values or what we’ve based our business model on, especially since we know a man-made diamond does not hold its value. As your personal jeweler, this is not a financial decision we would advise upon. Let it be known that we are not against man-made diamonds, but instead, are against their value, (or lack thereof). Read more about this topic.
Only a natural diamond has the rarity that supports its economic and emotional value. Consumers use diamonds as a symbol of love for that very reason. We all want to feel special, unique and rare, especially in our relationships, and a diamond communicates that message. (Rapaport)