At my father’s house for dinner last night, one of the guests brought up a story on Good Morning America in which shoppers and diamond experts compared their findings from Costco with those from Tiffany & Co. The GMA shoppers visited both stores, purchased stones, and reported their findings.
First, at Tiffany, Good Morning America bought a round diamond with very slight flaws, just over a carat, with a color grade of “F” (colorless). For the stone and an in-store setting considered “famous,” they paid $16,600.
Fuller [a master gemologist] consulted a standardized appraisers’ guide and told us the same grade diamond would cost an average of $10,500 at a no-name store, plus additional for the setting.
The expert believes the premium above the average price is fair, given Tiffany’s brand reputation, confidence at time of purchase due to years of quality control, or other “special extras.”
At Costco, we bought a round diamond with almost the same specs as our Tiffany diamond. It is just over a carat with very very slight flaws and a color grade of H, nearly colorless. At $6,600, it cost $10,000 less than the similar diamond we bought at Tiffany.
Fuller said the average price for such a stone would be $8,000, a price that doesn’t include the setting.
Was there any doubt that Costco would offer a better bargain? I believe what surprises many people about this story is that Costco does sell excellent quality diamonds. The GMA shoppers offer these suggestions for shopping:
* Find out the refund policy. Make sure the store has a written cash refund policy. Both Tiffany and Costco do.
* Get the diamond appraised. Immediately after you purchase the diamond, take it to a qualified diamond appraiser.
Marketing campaigns for the dimaond industry elevated the commonplace stone to an object seen as rare and desirable by the highest in society, which as planned, trickled down to the social conscience of just about everyone. Beyond the marketing ploy, diamonds also are associated with massive human rights violations, the details of which I won’t go into here. The “romanticism” of the stone is so deeply rooted into our culture, good luck trying to take a rational approach when planning to propose marriage.
Here are some more resources for shopping or reading:
* Blue Nile
* Have You Ever Tried to Sell a Diamond?, from The Atlantic, a thorough history of diamonds including details about the DeBeers diamond advertising campaign.
* FatWallet thread about diamonds
Updated January 16, 2010 and originally published December 18, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.