Diamond and Gold Warehouse
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Dallas, TX 75240
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10 Things Jewelry Stores Won't Tell You

1. Most Jewelry is Marked Up 100 Percent
Jewelry is a product that people don’t buy everyday and jewelry stores only turn their pricey inventory about once a year, so the markup is generally 100 percent. (Unless you buy from a wholesaler like us.) The 50% Off Sale & Huge Sales at Jewelry Stores are not really sales.

If you see a sale price in the newspaper, don't fall for it. You will probably pay much more than the regular price. Some major retail jewelry stores, prior to a sale, will mark up diamond rings double or triple the normal selling price, then marked them half-price during a sale.

2. The 'Wholesale' Diamond Price List
The trade isn't happy that there is a price list for diamonds. The Rapaport Diamond Report is a necessary evil though, and all diamond dealers reference it when they sell. However, Rap sheet isn't necessarily a wholesale diamond price list. There is a cushion built in so that jewelers have some room for profit now that jewelry customers have become savvier with their purchasing.

3. It is Hard To Grade a Diamond if it is Already Set
How good of a diamond do you need to buy? We will teach you everything you need to know about the Four Cs of Diamonds, but remember this: diamonds are graded UPSIDE DOWN. Even people who grade diamonds for a living can't tell the color or clarity grade when the stone is right side up, which is the only way that you will ever see it once it is set in a ring.

4. Cut Is the Most Important 'C'
The diamond quality factor that makes the most difference in the beauty of the stone is also the factor that makes the least amount of difference in its price: CUT

The cut of a diamond isn't just its shape but the angles, proportion, and finish of its profile. The cut of a diamond determines how well the diamond handles light. When a stone is well cut, almost all of the light that goes in bounces around and comes back out, showing up as all those sparkles of brilliance. It is the same principle as a prism; the angles have to be exactly right to reflect the light back out at your eye.

5. Fluorescence Costs Less (And Looks Better)
The Gemological Institute of America did a study to test expert and non-expert opinions on diamond appearance and fluorescence (science). They showed diamonds with identical grades except fluorescence to a large group of dealers and asked them which was better. They couldn't tell the difference, except when the color of the original diamond was in the yellowish range (K and down.) In those cases the diamond dealers thought that the fluorescent diamonds had better color than they really did. You can make up for color with fluorescence, which is a positive factor, especially on your wallet. Furthermore the Gemological Institute of America checked their database of diamonds and calculated what percentage had fluorescence, and found diamonds with fluorescence were more rare!

6. Size Matters, But It Goes Up In Steps
Diamond pricing is based on rarity, so the bigger the diamond the more it costs per carat. But diamond prices don't increase in a smooth rational curve. They go up on steps because people think in round numbers. The biggest step, not surprisingly, happens at 1.00-carat. People want a 1.00 carat diamond. They don't want a 0.96-carat diamond. Therefore a 1.00 carat diamond costs a lot more per carat. And because cutters are trying very hard to hit that magic number, a lot of 1.00-carat diamonds aren't very well cut. The cutters are trying to hold onto a few more points.

7. Some Certificates are Just Worth The Paper They are Written On…
Diamond comparison shopping seems pretty straightforward. You get a grading report with the color, clarity, carat weight, and a little bit of cut information and you just take the best deal. There's just one problem. There are a lot of companies that issue diamond grading reports. And they don't all grade to the same standards. The most recognized standard for grading is the GIA and EGL USA.

8. Be Careful of Jewelry Appraisals and Insurance
There are many fine reputable skilled people who are jewelry appraisers, but appraisals are one of the jewelry industry's many dirty secrets. Many of the appraisers are gemologists, not jewelers. They usually have a diamond master set and are fair at grading diamonds, but will often look up the price of the diamond on the Rapaport Sheet.

The problem is that they need to be able to grade fine colored gemstones and know the market, and many of them lack the market expertise. And if the jewelry being appraised is Estate jewelry, the ability to appraise the price is less. The reason is that they're not taught appraisal skills at gemology school. They're taught gem identification, which doesn't include researching markets, how to find comparisons, what the differences are between retail replacement, liquidation, and estate values are.   Their lack of knowledge in the jewelry market will hurt your appraisal.

However, this does not mean you want to stick with jewelry stores either.  The reason being is their conflict of interest. Most appraisals are done by retail jewelers, which usually means they are either selling the piece to you, judging a piece that their competition sold you, or evaluating a piece that you want to sell to them. The ability to be fully objective is nearly impossible.  On a side note always be careful of any appraisal from a retailer that gives a value for the item that is more than you are paying.

Why is the appraisal so important? When you are having your jewelry appraised for insurance purposes.  Undervalued jewelry or overpriced jewelry will cost you if something happens to the piece. Insurance companies could solve this issue by only accepting appraisals from really qualified people, but they don't. And because many appraisers don't understand the law or how insurance works, the appraisals are incomplete, which can cost you in the end.
The insurance company, in most cases, only has to replace your item, and the replacement it based on the pathetically inadequate description on the appraisal, using their own wholesale sources. You pay insurance based on the retail value of the piece; the insurance company buys it at wholesale (half) and gives it to you. To truly avoid any loss of value you need an insurance policy that specifies retail replacement at the place you bought the item. There is only one company that does that nationwide (although a few states require it of all insurance companies). That company is Jewelers Mutual of Neenah, Wisconsin, a non-profit mutual association.

It is in your best interest to trust a GIA or EGL USA grading report, and to be careful of other appraisers and the insurance you buy for that piece of jewelry.

9. There is a New Diamond Treatment
There are diamonds made in a laboratory, but they are used mostly for industrial purposes. Space shuttle windows, grinding powder, super fast chips, stuff like that. Gem-quality synthetics aren’t cheap enough to be a threat. (The only ones we see are fancy yellows.) The main impact of synthetics on the gem diamond market is that the technology used to make diamonds can also be used to improve diamonds.

10. Almost All Colored Gemstones are Treated
Unlike the diamond industry, which is full of big, well-capitalized multinational mining companies, most colored gemstone miners are about one step up from a guy with a shovel and panning basket. (And in many cases that's exactly who mines gems.) Therefore, production is pretty small and inconsistent and dealers have put a lot of effort into maximizing what they have. What that means for you is that whatever a colored gemstone looks like when it comes out of the ground, someone will try to make it look better.

The most ingenious example of this is high-temperature heating of ruby and sapphire. Both of these gemstones are the mineral corundum, which is aluminum oxide. The color is created by trace elements, chromium in the case of ruby and titanium and iron in the case of sapphire. When treaters take ruby or sapphire up close to melting point, more of these trace elements are dissolved, basically (OK, there is some stuff about valence states, and oxygen does go in or out, but you get the general idea.) Heat maximizes the potential of what is already there, which is why the trade decided that it was an acceptable enhancement and could be sold as a normal product. Today, a lot of gems are heated, most at temperatures much lower than that required for ruby and sapphire, including tanzanite, citrine, aquamarine, tourmaline, and amethyst.