Excerpt from Millennial Money man. June 14, 2017

I run marketing operations for jewelers and have direct access to diamond pricing information and standards for the jewelry industry. You will absolutely save money on diamonds and engagement rings if you follow the guidelines in this article.

That’s right – my largest digital marketing client over the past two years has been a jeweler that specializes in loose diamond sales and custom engagement rings. I’ve held numerous loose diamonds in my hands, inspected them with jewelers’ tools, seen the custom ring building process first hand (it’s pretty cool), and even sat in on client interactions and sales.

All of that was to learn more about the products (diamonds and engagement rings) so I could write about and market them more effectively, but in the process I’ve basically received an informal diamond education. There’s no doubt in my mind that I’m one of the only personal finance bloggers that could sit in and at least attempt to sell a diamond to a customer.

How to save money on diamonds and engagement rings:

Most people don’t buy diamonds for a good price, even though they think they do. The unfortunate reality of the jewelry industry is that the product is completely foreign to the customer, so it’s not too hard to sell diamonds with crazy markups or poor quality without anyone knowing differently.

A lot of jewelers are great, honest people. There are ones that aren’t though, and they mess it up for everyone else.

You can look up all of the diamond “4 C’s” articles you want on Google, but diamonds are actually much more complex than the average person takes the time to learn. It takes gemologists years to get their educations, and it’s a rigorous process that involves a lot of schooling.

But, if you use the following rules, I guarantee that you will get a better price on a diamond or engagement ring than anyone you know.

1. Avoid mall chains at all costs

Every single mall jewelry store that you’ve heard of (with the exception of Tiffany, and I’ll get to that shortly) sells diamonds that are poor quality for a highly marked up price.

You might be wondering how they get away with it, but it’s pretty simple. Those stores spend tons of money on advertising, and try to get customers to attach emotion to the purchase instead of reason and information.

Mark ups on diamonds in stores like Zales, Kay, and Jared are often 100% or more. If you pair that with the use of poor quality diamonds, you’re probably going to get hosed.

Tiffany is the one exception from a quality standpoint. Their diamonds are really, really awesome. But, you’re going to pay a heavy premium for the pretty blue box. You can get the same quality of diamond elsewhere for a much better price.

Tiffany has a markup of 324% above their acquisition cost (I got that information from a very reliable source). In comparison, low overhead jewelers that I’ll outline later typically have 5-20% markups.

The other huge issue with mall stores is lack of negotiating room. Not only are you fighting with one hand tied behind your back because of the already high markup and low quality diamond, but there’s often no room for driving the price down. They just don’t have to negotiate with you.

If you don’t do anything else on this list – you’ll at least save money by avoiding mall chains.

2. Always look for smaller family-owned jewelry stores in your area

Hands down, the best deal you will find on a diamond is through a jeweler that has extremely low overhead. Their prices will be better than most large local jewelers, mall stores, and even internet retailers.

Specifically, look for family owned jewelers You’ll want to find a store that has been around for 10-20 years and has a great reputation and reviews online.

Google is the best place to find these types of jewelers because it’s very common for smaller jewelers to rely on SEO (Search Engine Optimization) to reach new customers in lieu of TV or radio commercials and billboards. It’s much cheaper and fits their business model better.

Markups by these smaller jewelers are MUCH less than mall stores, and there is usually a decent amount of room for negotiation on each diamond. Also, the diamond quality on average is much higher.

If you’re wondering about the actual ring part of the equation, most of the time small family-owned jewelers have a good relationship with a custom engagement ring designer. If you find a really good one – they’ll have that service in house.

One last note – the ultimate deals can be found at wholesale jewelers that also sell direct to regular people. Because they source diamonds for other jewelers, they have lower markups and have large inventories to choose from. They literally can source diamonds from all over the world in an extremely short period of time.

3. Internet stores aren’t right for everyone (but they are much cheaper than mall stores)

Here are some things you need to be aware of when shopping at online retailers:

1. You need to understand how carat weight works

While internet stores can have some really good prices on their diamonds, there can actually be a little bit of a catch on some of their “best deals” if you don’t know enough about the specs. This is where complexity of diamond grading can come in.

All one carat (or any carat weight) stones aren’t created equal. The carat weight can actually be distributed in different places of the diamond. Sometimes, internet stores sell diamonds that have a higher distribution of the carat weight to the “depth” of the diamond (basically the bottom part), rather than the top or “table.”

While all jewelers sell these types of stones, you aren’t going to have someone to sit down with that explain this concept to you.

They might be selling a one carat diamond at a great price, but if the carat weight is distributed in the depth of the diamond, that one carat stone may actually look like a .90 carat stone to the naked eye.

In that scenario, your significant other gets a smaller-looking stone. You might as well actually buy a .90 carat stone with a larger table percentage and save some money.

2. You need to understand that color and clarity aren’t strict guidelines

Most people have heard of the four C’s (cut, color, clarity, and carat weight), but many people don’t understand that there are ranges within clarity and color!

How to buy diamonds and engagement rings for less

Many times, retailers will sell a SI1 diamond that is on the lower end of the SI1 range. It’s not an awesome SI1, but you can’t really compare that diamond to another one in person.

Depending on the inclusions (read flaws) of the diamond, there may be a SI2 diamond for cheaper at the top of the SI2 range that actually looks better than the SI1.

In my opinion, the only way to know for sure is to go to a jeweler and literally hold the diamonds and compare them. You’re rolling the dice a little bit with online retailers because your ability to compare is limited.

It’s not that online diamond retailers are trying to trick you, but you’re just more likely to purchase a diamond that’s not as good as one you could have bought in person (unless you really know what you are looking for).

Great deals can be had online, but you need to really carefully consider each diamond and determine why it’s priced the way that it is.

3. 10x magnification on videos and pictures of the diamonds

This isn’t really a trick, but it is a reality of the online business model. People want to see diamonds up close and in detail because they want to know what they are buying! Online retailers meet this need and try to create trust by showing the diamonds in 10x magnification in their pictures and videos.

It sounds nice, but it can backfire and make you spend more than you need to.

It’s important to evaluate diamonds at 10x magnification for verification that the diamond is what the jeweler tells you, but nobody will EVER look at the diamond that way again (unless your significant other is…particular). The best way to buy a diamond is to hold it in your hand and look at it without magnification the way everyone else will see it.

Sometimes a diamond with a lower clarity (and cheaper) will look better than one with a higher clarity. The color of the diamond may look different under normal light than it looks in a picture online.

I’m not saying 10x magnification is bad at all, and online retailers are just doing their best to provide transparency to the customer. But, you might accidentally spend more trying to avoid a flaw that can’t be seen in real life anyways.

My wife’s diamond is an SI1 because it has a feather inclusion (basically a small crack) that I have looked for over and over again and can’t find without magnification. She can’t either. I even know exactly where it is and still can’t see it!

If I had looked for that diamond online, I probably wouldn’t have bought it and paid more for something else without that flaw.

4. Don’t fall in love with specific carat weights

I’m going to use one carat again, because it’s a very popular carat weight. A one carat weight diamond, even if it looks the same size or smaller than a .99 carat diamond, will cost more. There is a premium put on the whole number carat weights because the demand is so high.

You can buy a slightly smaller diamond for a better price than a whole number carat weight,

One of two things will happen when you compare the two diamonds:

You’ll have no idea which diamond is which
The smaller carat weight diamond will actually look as big or bigger
The smartest and easiest move you can make is to buy a diamond with a slightly smaller carat weight than what you were originally looking for. One tenth less carat weight can save you hundreds depending on the stone.

5. Take inclusions and clarity grades with a grain of salt

Like I mentioned earlier about my wife’s diamond, inclusions and clarity grades vary greatly. Don’t get stuck with the mentality of “I HAVE to have a VVS1 diamond”, because a VVS2 or SI1 may actually look better.

There are just so many factors that go into how a stone looks. I don’t want to bog down readers with the specifics, but it’s important that you understand that the grades don’t matter nearly as much as how the diamond fits in your budget and looks in real life.

Jewelers buy stones for their significant others that have significant inclusions in them. Think about that.


Above all else, avoid mall stores, find a reputable jeweler with low overhead, and don’t get too wrapped up in diamond specs and grades. Go with something that comfortably fits in your budget and looks good to you in real life. As much as it’s a symbol of love, it’s also a fancy rock.

One last note – if you are stuck between two diamonds and price is the only significant difference, go with the cheaper diamond. Your significant other will never see the other diamond and be able to compare in real life. They’ll love whatever you buy for them.
Source: Millennial Money man

The Diamond Broker, Family owned, reputable and in Dallas for 30 years. DFW’s Original Diamond broker