Engagement Ring Budget

How much should you spend on your diamond ring?

How to sell a diamond ring

Selling a diamond or engagement ring

How to get the most money when selling your ring

 

how to sell engagemenet ring heroDiamonds may be forever, but they don’t necessarily need to be forever with the same person.

There are many reasons to sell a diamond ring – a change in life circumstances, an upgrade of an original engagement ring, passing on a family heirloom, or something else entirely..

But whatever the reason is, it’s a certainty that you want to know how to sell your diamond ring for the most money.

We’re going to talk you through each of the different options available to make sure that you have a clear understanding of where the best place to sell your engagement ring is and how to get the most for it.

Five things to know when selling your engagement ring:

  1. Selling a diamond is like selling a second-hand car – you won’t get the ‘list price’ ie. the appraisal value
  2. The center stone size and quality is the main determinant of the value, the setting is less important
  3. Cutting out middle-men wherever is key to making sure you get the most money for your diamond ring
  4. A little patience will mean that you will make significantly more money
  5. A specialist diamond buyer will give you the best price

Jewelry appraisal prices vs. the price you can expect to receive

Most people who own a significant piece of jewelry will have received an appraisal certificate with the purchase. And when it comes to selling a diamond, people often base their expectations on what they will be able to sell it for on the appraisal price.

In reality though, the price that a diamond can be sold for will be significantly lower than an appraisal value.

Firstly, one thing to know is that appraisals are almost always higher than the actual value of the ring. There are two reasons for this – one which is valid, and one which is less so.

Jewelry appraisal: replacement value

When a jeweler appraises a diamond ring, they will give a quote for the ‘replacement value’.

This replacement value is the estimated amount of money that it would take to have the item replaced with an identically specced piece of jewelry. That value can be based on the amount it would cost to buy the precious stones, the precious metals and create the ring, including any custom design or craftsmanship.

diamond ring appraisal certificate

Replacement values generally try to take into consideration market shifts in the diamond prices over time – it’s basically an estimation of how much the jewelry could cost in the future. As a result, they are usually higher than the actual purchase price.

However, even allowing for this, the replacement values that are included on an appraisal are often over-stated. Jewelers know that engagement rings are significant expense, so want to make sure that there is no feeling of ‘buyer’s remorse’. They don’t want people to feel like they got ripped off.

The diamond in the appraisal certificate above is 1 carat ’round brilliant’, with SI1 clarity, H color and very good cut, polish and symmetry.

An identically specced ring can be bought today for around $4,500 – a full 25% less than the $6,000 appraisal value:

carat diamond real price

By providing an appraisal that is higher than the purchase price, jewelers make people feel that they got a great deal and hugely reduce the likelihood that people will have second thoughts and ask for a refund.

This is morally dubious, especially as it means that the buyer then needs to pay more than the ring is really worth for insurance.

What it also means is that if you are basing the amount that you hope to receive for your diamond ring off the replacement value on the appraisal certificate, you may be disappointed as it’s unlikely that the ring was ever actually worth the stated ‘replacement value’ amount.

Jewelry appraisal: resale value

Resale value is the real number that you need to know for selling a piece of jewelry, but this won’t be included on an appraisal certificate.

Instead, the resale value is the amount that someone will pay for the goods in their current state. This value is generally a “used” price and it’s based on what someone wants to pay for item.

Often the biggest hurdle for a person trying to sell an engagement ring is accepting a resale value that they can live with. In the perfect situation, there’s normally a balance, slightly less money than the seller really wanted and slightly more than the buyer wanted to spend.

Selling a diamond vs. selling a car

This isn’t a perfect metaphor, but it’s close enough to explain why resale value is lower than replacement value.

Jessica has had a change in life circumstances and is now looking to sell her sell her 6 month old VW Golf, which originally had a standard price of $25,000, with an extra $2,000 for maroon metallic paint that she added as it’s her favourite color.

Rather than trying to sell it privately, Jessica decides to sell to a car dealer. On the way in she spots a similar used VW Golf priced at $20,000.

$20,000 would therefore be the ‘replacement value’ for her car.

The dealer offers Jessica $15,000 for her car. This is less than she originally anticipated, and the fact that she added metallic paint as an option doesn’t increase the amount it is worth to the dealer. In fact, personalising it with maroon paint actually makes the car less valuable to the dealer as it’s likely that fewer used car buyers are looking a maroon car compared to a more common car colors.

The dealer knows that he has to clean the car, fixes minor issues, take pictures, advertise the car, store the car, pay staff salaries and then a bonus to the salesman who sells the car. All of this takes time and money, so $15,000 is what he can offer to ensure that he can make a profit and stay in business.

$15,000 is therefore the resale value.

Selling a diamond is similar to this. When you resell a stone, it will then be re-used (either in a new piece of jewelry or sold on) in order for the jeweler to recoup his purchase cost.

  • The jeweler also needs to cover his costs to get the diamond ready for resale – this might include getting it reappraised, repolished or resetting it into a new ring style.
  • A personal or less common choice in your ring design may mean that while it cost more to buy originally, it willy likely be worth less than a simpler design when it comes to selling.
  • Jewelry sold using ‘recycled’ diamonds is usually priced lower than jewelry with new diamonds, just like a used car
  • The jeweler needs to include a profit margin in the transaction in order to stay in business.

If you bought from a bricks and mortar or designer jeweler

If you bought from a bricks and mortar then the difference between the ‘replacement value’ listed on the appraisal and the ‘resale’ value that you are offered may be significant, and more than you expect.

This is because diamonds and jewelry at bricks and mortar retailers are generally overpriced.

Compared to online retailers, bricks and mortar jewelers have far larger overheads – staff, rent, stock etc. This means that they need to charge more for their products to cover these. With diamonds, this difference can be significant and the price of a diamond at a chain jeweler can be twice that of an online retailer.

For example, this 1.01 carat, G color, VS2 clarity diamond costs $11,185 at Zales.

carat g color diamond zales

An equivalent diamond (also 1.01 carat, G color, VS2, excellent cut) is priced at $5,084 at one of my recommended retailers:

carat g color diamond with clarity price

Despite this big difference in original price, these two diamonds would still be worth the same when it comes to selling them.

What this means if you paid a higher original price at a bricks and mortar or designer brand retailer, then the difference between the price you are able to realise when selling and the price you paid will be greater.

That can be difficult to come to terms with, but unfortunately it’s the reality when some retailers charge significantly more for similar merchandise.

How much is your engagement ring worth?

engagement ring budget setting

Like anything, a diamond ring is worth what someone is willing to pay for it.

Prices for new diamonds have been fairly steady over the past 5 years – contrary to what many people expect, diamonds are not an investment that increase in value over time.

Jewelry retailing is extremely competitive and most jewelers operate on very thin profit margins. Online jeweler Ritani has recently started adding information about the amount of money they make on each and every diamond on their website:

diamond pricing

On a 1 carat diamond that is being sold for $5,520, they make just $187.29 profit – just 3.4%.

When reselling your diamond, you are selling it back to an industry that doesn’t make big mark-ups on new diamonds, let alone resold diamonds.

Factors that affect how much your engagement ring is worth

Bottom line: the most important thing in determining the price you will receive is the size and quality of the center stone, not the ring setting.

While you may think of your ring as a single object, to a jeweler it is two separate things:

  1. The ring setting
  2. The center stone

When you are buying a ring new, the price of the setting can vary tremendously.

A simple solitaire in 14k white gold may be just a couple of hundred bucks:

simple solitaire engagement ring setting

While an ornate platinum setting with significant amounts of melee diamonds set into it can be several thousand dollars:

halo diamond engagement ring

This difference can make a big difference to how much the ring is worth now, and maybe not in the way you might expect.

Two rings may have cost the same, but may now have very different values

If a theoretical engagement ring buyer had originally had a $10,000 budget, they could have bought either of the two settings above, and used the remainder of their budget for the center diamond.

Choosing the halo setting would obviously have left a significantly smaller proportion of the budget to go towards the diamond:

halo vs solitaire engagement ring budget

But when it comes to selling the rings, the ring with the solitaire setting and the larger diamond will be worth considerably more as it is the diamond, rather than the setting that is valued by jewelry buyers.

In fact, the ring with the simple setting and larger diamond would likely be worth more than twice as much, even though the two rings originally cost the same amount to buy.

Why expensive settings aren’t valuable

When buying an engagement ring, the cost of production makes up a significant proportion of the cost. If a ring is custom designed, or if it has many small ‘melee’ diamonds set into it, it takes time, effort and money to create.

These certainly makes it more special to the wearer, but unfortunately when most jewelry purchasers place a value on a ring, they disregard the production value and base the their offer on the center diamond as they will usually remove the diamonds from the setting and melt it down to reuse in other jewelry.

This process of removing the diamonds is time-consuming and can mean that the time taken to disassemble the ring can be more valuable than the small diamonds are actually worth.

To a diamond buyer, therefore, the $10,000 ring with a setting that cost $4,840 doesn’t have the same value as a simpler solitaire setting with an inexpensive $245 setting but a much larger diamond. It doesn’t mean that the expensive setting wasn’t valuable originally, just that unfortunately it isn’t valued by jewelry buyers to the same extent now.

Selling a designer ring

The exception to this are designer rings, which do have a secondary market and which can be sold as complete rings.

Jewelry from these brands is known as ‘signed’ in the jewelry trade as they include an engraving of the maker’s name on the inside of the ring.

designer rings resale

So if you want to sell a Tiffany&Co, Bvlgari, Van Cleef, Cartier, Harry Winston or similarly branded ‘signed’ diamond ring then there’s a good chance that you will be able to recoup significantly more than a ‘generic’ ring with a diamond of similar quality.

Diamond certification and selling your diamond

As well as the 4 Cs of your diamond, another factor that will affect how much it is worth is its diamond certificate, or as it’s more properly known: ‘grading report’:

Sample DGR x

Grading reports are different from appraisals as they are prepared by an independent lab rather than a jeweler. They also don’t assign a value to a diamond but they are a key factor in deciding how much a diamond is worth.

There are several different grading labs that assess diamonds, with some having a reputation for strictness and consistency while others are more generous with their gradings – known as ‘overgrading’.

As a result, the same diamond can be graded very differently from different labs. In a test by a diamond industry publication, one diamond was graded as G color by GIA and D by EGL Israel:

Grading Test

The GIA has graded this diamond much more strictly and it is likely that this is a more accurate grade. As a result of this strictness, the diamond trade trusts that certificates from GIA are accurate and trustworthy.

If your diamond has a certificate from a lab other than GIA or AGS, or if your diamond only has an appraisal and no grading report, the diamond seller may offer you less than a diamond that has been graded by one of those two organisations, as there is a chance that it has been overgraded and is actually lower in quality than the report indicates.

How much will you get when selling your diamond

engagement ring budget cosiderations

The amount that you will receive when selling your diamond or engagement ring depends hugely on where you decide to sell it.

We conducted a test where we offered the same type of diamond to six different types of jewelry buyer to find the best place to sell a diamond ring:

– A pawnbroker
– A ‘we buy gold’ jewelry buyer
– A local jeweler
– eBay
– Worthy.com
– A specialist diamond buyer

The prices that we were offered for the diamond and ring ranged from XX,XXX to XXXXX.

Finding the best place to sell your engagement ring

To test which jewelry buyer was the best, we offered each of the six types of jeweler exactly the same ring, and provided exactly the same information.

The ring we offered was an emerald cut diamond ring with a platinum solitaire setting:

carat emerald diamond ring for resale

The diamond had the following specifications:

  • Shape: Emerald cut
  • Carat: 1.21
  • Color: I
  • Clarity: VS2
  • Polish: Excellent
  • Symmetry: VG
  • Fluorescence: None
  • Grading report: GIA

If this ring was being bought new from one of my recommended retailers, it would cost around $4,700:

carat emerald cut diamond retail price

If it was being bought new from a chain jeweler, it would cost considerably more.

Zales charges $7,556 for just the diamond on its own:

emerald cut diamond zales

 

$7,556 is nearly twice as much as my recommended retailer is selling a similarly specced stone.

So how much could we get for our ring at each of the different types of jewelry buyer, and where is the best place to sell it for you?

Selling a diamond ring through a pawnbroker

Pawnbrokers’ business model is to offer people who need money fast lower than market value for whatever goods they have available. They are taking advantage of people’s need for.

When we asked for a price for our 1.21 carat emerald cut diamond from a NY-based pawnbroker, the price we were offered was the lowest out of any of the buyers: $$1,200 – $1,400.

Even if you feel that you need to sell your engagement ring quickly, if you can wait just a few days then there is a much better way to make sure you get real value.

Selling your engagement ring to a ‘we buy gold’ store

‘We buy gold’ shines the neon sign and yes, these businesses do indeed buy gold, as well as platinum, diamonds and many other precious metals.

They are essentially a middleman who take the items that they buy and resell them on. Like a pawnbroker, they will give you an assessment of the value straight away and will offer cash.

We contacted two NY-based ‘We buy gold’ organisations and the offers that we received back were: $1,300 and $1,500.

Selling your diamond to a local jeweler

Many local jewelers don’t buy second hand jewelry because they would rather focus on selling new jewelry – the profit margins are better and it is less work for them.

If you can find a local jeweler who will buy your ring, they will normally sell it to a dealer who then will sell it to a wholesaler. Each of these people will be looking to make some profit on their sale, which means that the initial offer that the jeweler will make you is likely to be low.

We offered our ring to 10 local jewelers across the US, and two were interested. The highest price we were offered was: $1500 – $2000

selling diamond local jeweller

Selling a diamond ring on eBay

Ebay can be a great place to sell many things. But it’s not a good place to sell a diamond or engagement ring, especially if you have a diamond with a good certificate ie. GIA or AGS.

While I didn’t want to actually list the ring on eBay, by searching ‘completed auctions’, I found a ring that wasn’t a million miles away – an emerald cut diamond three stone ring, with VS2 clarity and H color for the centre stone, and a total carat weight (including the side stones) of 2 carats.

The asking price was $2,499:

dont buy engagement ring ebay

However, it didn’t sell, indicating that this price was too high for eBay’s buyers.

In fact, not many second hand rings sell on eBay, because it is cluttered with diamond and engagement ring listings from actual stores, rather than individuals looking to sell their diamonds.

And many of these diamonds have low quality certificates which means they are listed at extremely low prices. A brand new 1.5 ctw emerald cut ring with D color and VS2 clarity is listed at under $3,000:

ebay brand new emerald cut diamond

It’s difficult to compete with these prices, even if your engagement ring has a better certificate and is better quality.

If you would like to try listing your ring on eBay then the initial listing fees are minimal, but you will need to pay a final value fee of between 6 – 9.5% and a PayPal transaction fee of 2.6% after the auction has finished.

Selling a diamond ring through worthy.com

Worthy.com is an online ‘consumer to business’ marketplace, where people can list an item of jewelry and professional jewelers and diamond buyers will bid and compete against each other to buy it.

At first glance, worthy.com can seem like a great option. They have a great looking website and it can connect someone who wants to sell a diamond with far more potential buyers than they would be able to reach normally.

In fact, the ring that we were using in this sale was actually sold on Worthy:

Worthy diamond ringprice

108 bidders were interested in it and it sold for $2,202.

But this isn’t the amount that the seller would have actually received.

The reason here is because worthy.com is a middle-man for diamond-buyers and they charge a fee on every successful transaction.

What are Worthy’s commissions?

Worthy calls its commissions ‘success fees’ and these are payable only when a successful transaction is completed:

  • Up to $5,000 = 22%
  • 5,001 – 15,000 = 15%
  • 15,001 – 30,000 = 15%
  • 30,000 and above = 10%

In this case, the commission would be $440, leaving just $1,540 for the person selling the diamond or engagement ring.

Why worthy isn’t worth it

If a diamond buyer would usually pay $2,200 for a diamond of a particular size and quality, this won’t change whether the diamond is being purchased directly from a customer or through worthy.com.

By cutting out the middleman and going straight to a trusted diamond dealer, you can get 100% of the sale price, rather than giving up a significant proportion of the profits.

Lastly, if your diamond hasn’t been graded, or hasn’t been graded by GIA, then they may take the diamond out of the setting and have it graded. They do always obtain written permisson before they do so. But they don’t always put the diamond back into the setting. This means that if the diamond doesn’t sell, they may return it to you with the diamond not set.

Sell your diamond ring to a diamond specialist

A diamond specialist is a person with the diamond trade that buys diamonds to reuse in jewelry, often melting the setting down to be reused also.

They’re often called ‘diamond dealers’ and are actually exactly the people that buy jewelry through Worthy.

The difference here is that by going direct, there is no middleman to take a commission, so the seller (you!) gets to keep the entirety of the selling price.

The process usually works like this:

      • You send a description of the item you are looking to sell, including details like the carat weight and quality of the diamond, whether it is accompanied by a certificate etc
      • The buyer will assess it from the information you provide and make an offer. This will likely be a range until they see the actual stone
      • If you like the offer, you agree to send the stone to the diamond buyer to assess in person
      • The seller emails you a pre-paid shipping label and instructions to ship the item
      • You send the item, covered by the seller’s insurance
      • The seller will give you a final price after inspecting the ring, which will be within the original range quoted
      • You receive an overnighted check or bank transfer

As well as a higher price paid, the other big advantage that working directly with is that you get the money for the ring straight away – no waiting around for an auction to run its course.

Our recommended diamond specialist is Alon Mor at ‘The Diamond Oak‘ – a third generation New York based diamond dealer who has an impeccable reputation for service and fairness.

Alon quoted $2300 – $2500 for the stone on its own – significantly higher than the other options. The reason he is able to offer more is because he knows the true value of the stone and what it will be worth in its next life when it is used in another piece of jewelry. Plus, as he isn’t acting as a middle-man, he doesn’t need to bid low in order to ensure it make business sense for him.

The best place to sell your engagement ring

When we tally up the different offers, it’s clear that one type of diamond buyer will offer the most value for you:

RankNameOffer
1Diamond specialist$2,300 – $2,500
2Local jeweler$1,500 – $2,000
3‘Worthy.com$1,540
4‘We buy gold’ store$1,300 – $1,500
5Pawnbroker$1,200 – 1,400
6eBayUnsold

Parting with an engagement ring can be an emotional, but if you feel that the time is right then Alon at The Diamond Oak will guide you through the process and ensure that you receive the very best price possible – just click through and fill out the form and he’ll get straight back to you with your offer to begin the process.