Diamond Appraisal vs. Diamond Resale: Understanding the Real Value

Understanding the different diamond valuations will help you make the right decisions when selling your diamond. We’re breaking down the difference between your diamond’s appraised value vs. resale value so you can sell with confidence.

When it comes time to sell your diamond jewelry, you’re going to have a lot of questions: how do I start the process? Where do I look for expert information? Perhaps the most important question is also the most misunderstood: how do I find out what is my diamond worth?

Let us guide you through the often-confusing world of diamond jewelry appraisals, helping you understand the different valuations and what they might mean for you when selling your diamond.

Ring Appraisal

What is a Diamond Ring Appraisal?

When a diamond ring is purchased from a retail store, usually it’s accompanied by a lovely box, sometimes a cleaning cloth, and often an envelope containing paperwork printed on heavy letterhead paper. It looks very official, is signed and dated, and typically describes the ring in detail (maybe with a photograph or two). It also states a value, which is either the same as the purchase price or often more.

This piece of paper is a retail insurance appraisal. It is intended to be a document that you provide to your insurance company to begin a policy for your ring and allow it to be covered in the event the ring is lost, stolen or significantly damaged. Getting a diamond appraisal will provide a description of the ring and a valuation based on the quality of its various elements, such as diamonds, side stones, and branding.

Many engagement ring appraisals or other types of diamond appraisals, however, reflect a value that is inflated – sometimes as much as double the retail purchase price. The price inflation is intentional as it allows insurance companies to increase the premium you pay while making the retailer look like they sold the ring at a good price to the customer. Therefore, it’s important to keep in mind that a diamond ring appraisal should only be used for insurance purposes and does not reflect the value of the item at retail, let alone for resale valuation.

How to Interpret a Diamond Appraisal

Many people believe the value stated on a jewelry appraisal is the same as its resale value, but that’s not the case. Diamonds retain a portion of their value because they have an intrinsic value, and demand based on the quality of the diamonds will determine how high the value will go. Therefore, getting a ring appraised by a certified appraiser does not reflect the true resale value of the item.

The Jewelry Appraisal vs the Selling Price

So, what does the value stated on the diamond jewelry appraised report mean for you? When you want to sell a diamond ring on the secondary market, the only true value that still exists lies in the diamonds and the physical metal. Any additional factors such as labor and the original jeweler’s profit are no longer relevant because they cannot be recuperated. The largest factor of value depreciation relates to where the diamond jewelry was purchased. Larger brick and mortar retail stores have much higher fixed costs than pure online players, and as such need to command higher margins. Branded stores or designer jewelry will also command premiums on retail prices, all of which are typically not captured once selling the item.

To summarize, all of the factors listed above, i.e. retail margin, retail type, labor costs and branding, would be lost when reselling your diamond jewelry leaving only the intrinsic value of the diamond jewelry item. Thus, when comparing jewelry appraisal value vs. actual selling value you can expect the resale value to be around 1/3 the appraised value.

Ring Loop

Why Diamond Value Changes

This perceived loss of value is most apparent with diamonds, which are still sometimes marketed as being a “good investment.” This is a misleading sales tactic: a diamond sold to its first buyer can only be resold for much less than its original purchase price, in the same way as a new vehicle depreciates so that buying a used car is much less expensive, even if it has hardly been used or in great condition. The profit was already made by the retailer in the original sale, which means the owner will inevitably sell it to someone else at a loss.

The only exceptions to this rule are either very rare diamonds, such as fancy colored diamonds or unique signed pieces by brands such as Cartier or Tiffany & Co. These are more likely to hold their value or in some cases appreciate with time.

Knowing the Difference Between a Jewelry Appraisal and Selling Price, How Do I Sell My Diamond Jewelry?

Since many factors determine the resale market value of a diamond, including quality and current demand for that size and shape, it’s important to find experts who know and understand the market and can pinpoint the best way to maximize the value of your diamond. A certified appraiser cannot provide as accurate a resale value estimate as a certified diamond grader. At Mondiamo, our team of graduate gemologists and expert diamond buyers determine the true resale value with a diamond grading report and with a visual assessment of your diamond at our evaluation center in New York. Our experienced team will be able to educate you about the current, most up-to-date value of your diamond in the global market and, in some cases, even suggest ways to improve your diamond’s value by re-cutting or re-polishing the stone, improving its appeal thereby creating a higher value for you.