A real gem

What to know when, buying diamond jewelry

Your Money Staff

February 08, 2004|By Lorene Yue | Lorene Yue,YOUR MONEY STAFF

Buying the perfect diamond can be a daunting experience, but experts say there are ways to ensure that you end up with a dazzler instead of a dud.

"Do your research and get some background," said Renee Newman, a gemologist who has written guides to jewelry buying.

Smart diamond shoppers learn all they can about what the industry calls the 4Cs -- cut, clarity, color and carat weight. But really smart shoppers are up on these nuances:

A facet-lift

Aging celebrities aren't the only ones going in for cosmetic enhancement. Tiny surface fissures in a diamond can be covered through a process called fracture filling, and the stone's color intensity can be increased through heat treatment. A laser drill may be used to bleach out microscopic black spots in diamonds. You'll think you're getting a better stone and pay too much.

Jewelers are supposed to disclose whether a stone has been touched up, but some sellers are dishonest, Newman said.

Learn how to decode the disclosures on lab certification reports to determine whether the stone has been treated. The Gemological Institute of America has a tutorial on its Web site at www.gia.edu. For a free brochure, send an e-mail to prgia.edu or call 800-421-7250, Ext. 4192.

Pricing

Don't be fooled by so-called sales. Retailers base their pricing on what they paid for the stone and then add expenses and margins, depending on shape, size, color and clarity. "The larger the stone, the rarer it becomes and the more expensive it is," said Guy Richman, vice president of diamond operations for Diamond.com. A 2-carat diamond can cost up to three times more than its 1-carat equivalent.

Round, brilliant stones account for roughly 60 percent of diamond sales, and they cost as much as 10 percent more than emerald, princess, marquise and pear cut diamonds. There's more waste when cutting a round brilliant, which bumps up the price.

Long-term value

Don't count on your diamond increasing in value over the years. It's only those rare, large and nearly flawless rocks that are considered investment-quality stones.

"Diamonds and diamond jewelry should not be purchased for investment purposes, because you don't have a ready market to turn around and sell it on," said Bill Boyajian, president of the Gemological Institute of America. "If you do sell it, you'll likely sell it for something below wholesale," which can be half the original purchase price.

Getting what you pay for

Diamond-buying advisers recommend that consumers buy stones certified by an independent grading agency such as the Gemological Institute of America or the International Gemological Institute.

However, there are unscrupulous sellers who might switch a certification to go with a lesser-quality stone. Even if you think your jeweler is honest, accidental mix-ups can happen. That's why Newman suggests taking the piece to an independent appraiser for additional verification. Appraisers charge an average of $100 an hour.

Whether it's worth getting a second opinion is a personal preference, appraisers say. Some people bring in stones worth more than $4,000 and others bring in stones as small as one-third of a carat.

The 4 Cs of diamonds

Diamond buyers should at the very least arm themselves with knowledge of the four basic characteristics of stones. The higher the ratings in each category, the more valuable the stone. It's very rare to find a stone that is perfect in every category.

Carat weight

The standard measurement for diamonds is a metric carat, or 200 milligrams -- roughly the weight of a small paper clip. There are almost 142 carats in 1 ounce.

Clarity

How clear the diamond appears is based on internal flaws such as carbon spots or bubbles, and whether it has surface blemishes. The highest rating is F1 for flawless. The lowest is I3, which means it has imperfections visible to the naked eye.

Color

Diamonds are graded on a scale in which no color, a D grade, is optimal. As you move down the alphabet, a stone has more color. The exception to this scale is the untreated diamond with a natural color such as pink, blue or red.

Cut

This can refer to either the shape of the stone -- round, emerald, pear or marquise -- or its polish and facet proportions. There is no grading scale for cut, but take a good look at the stone and make sure the surface looks brilliant and doesn't have any dark shadows.

Lorene Yue is a Your Money staff writer.

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