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Costco vs. Tiffany, Who Has the Bargain on Diamonds?

This article was written by in Consumer, Shopping. 23 comments.


DiamondAt 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:

* Look for a certified stone. Buy a diamond that comes with a certificate from the Gemological Institute of America or the American Gem Society. That way, you know exactly what you’re getting.

* 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.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 23 comments… read them below or add one }

avatar Phil

Blue Nile does a good job. I was pleased with my purchase last year from them. Very nice!

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avatar Binary Dollar

Yeah give me Blue Nile any day. Buying a Tiffany diamond would just be buying the name.

Here’s the deal: Buy from Blue Nile. Say it’s from Tiffany’s. Best of both worlds.

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avatar SCapitalist

Buying a name brand diamond is pointless in my opinion. NOBODY can tell the brand of a ring from a glance. There are so many nice options when considering a diamond ring, it pays to do your research.

I recently got engaged, and buying an engagement ring was a very stressful experince. It was a major purchase that had alot of emotional value wrapped into it. Do not take a salesman’s word for face value. Have some idea of what you are looking for before you get sucked into a salesman’s game.

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avatar FMF

So, why are you interested in diamonds? ;-)

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avatar Luke Landes ♦127,480 (Platinum)

FMF: I’m not shopping right now, if that’s what you’re asking. :-)

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avatar Lazy Man and Money

I recommend look at PriceScope.com. You can read more about my experience here.

I would estimate that you save quite a bit over the Costco price. The appraiser said he would have a problem finding a deal as good. I didn’t find Blue Nile to be as competitively priced as Abazias who I went with. I know that Abazias had great service.

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avatar mapgirl

Try Carat.cc for laboratory diamonds. Much cheaper than the natural diamonds, but still carbon compressed at high pressure, or whatever it is that makes a diamond. (I keep thinking Ferris Bueller’s Day Off. You know what I’m talking about.) My friends are getting their engagement ring from Carat when it’s time to buy. They don’t go for the conflict diamonds and they are high-technology types, so they’re going with lab diamonds instead.

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avatar Steve Mertz

Flexo-Great article, but you missed the most important thing-Big diamonds support terrorists so the next time I get married, I’m giving my wife to be a stone no larger than 1/4 Carat ;-)

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avatar Binary Dollar

Mapgirl: The problem with lab created diamonds is that they don’t turn out very colorless. It’s common to find yellowish (or other colored) diamonds.

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avatar saving advice

Diamonds are the biggest rip off in the world since they are basically a semi precious stone that are only made to appear valuable. They are a perfect example of how good marketing has conned most of us into believing that they are worth something.

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avatar mbhunter

I’d make sure the intended recipient goes for diamonds. My wife doesn’t really like diamonds. Saved thousands right there. ;)

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avatar atong

who needs diamond? they’re practically useless…therefore, worthless…

who the fuk owns de beers?

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avatar Julie

Carat.cc sells CZs not lab made diamonds I heard.

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avatar STANDUP

It’s important to note the difference between “synthetic diamond” which is lab-grown diamond – and “diamond simulant” which can be anything that looks like or sort of looks like a diamond.

CARAT.CC does indeed sell cubic zirconia (diamond simulant) which wholesales from less than a dollar to a few dollars per carat, depending primarily on quality of cut.The idea that diamonds are as plentiful as semi-precious stones is ludicrous. High quality diamonds are genuinely rare. DeBeers no longer has a monopoly; there are now several major players in mining and distribution. Diamond rough is very costly simply because it is extremely difficult to find and then extract. A good diamond well-bought (at a wholesale or near-wholesale price) has nearly always maintained its value or better. Bought at retail, however, you can wait a very long time for the market to catch up.

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avatar tycobb9999

Thank you for setting the record straight, standup. There are a lot of ignorant posts here. Just because someone is too cheap to spend a little money for an heirloom, doesn’t mean they aren’t valuable and rare.

Conflict? LMAO if you want to use conflict as an excuse for not buying, then fine. Why not just tell the truth and say you’re cheap? Many things we buy directly or indirectly may support some sort of illegal or immoral activity; sorry kids, that’s just the way the world works. Get over it.

“My friends are into high tech, so they’re buying lab diamonds”. Great. You and your friends are cheap, that’s what you mean.

You know, you can find a million excuses for not doing the right thing, but in the end all you’re doing is making yourself look like white-trash. Buy that big screen tv and the top of the line satellite package instead. It’ll go great with your trailer house…

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avatar Moonshine

Geez, Some people would just like to be able to buy a house or a car or soemthing more vaulable than a rock on a finger. You can buy one that looks just like it and lasts as long and noone would ever know. Then you will be mowing your lawn and driving yourself around in that car y ou always wanted.

It is logic! It is technology, ITS THE 21st CENTURY!

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avatar Rhonda

This is a really bad story GMA did. Now they bought an F color at Tiff and a H at Cosco?? Why not buy an H at Tiff (they do carry that color) and do a direct comparison? Why? Becasue it makes for a better story to try and exaggerate the difference.

They whole thing is very misleading since at any store the difference between and F and H color means THOUSANDS of $$! And they bought the Costco stone loose. Also, take into account that Tiff does interest free financing and the difference between the two isn’t quite so drastic. (Oh, and Tiffany is conflict free, don’t know about costco).

I think it’s smart to shop around, but GMA is just trying to get a good story here!

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avatar MC

I agree with Rhonda–it is a bad story. The story also doesn’t emphasize the cut of the diamond which greatly affects the value of the diamond. Color, clarity, and carat are important, but it’s the cut that will make or break a diamond. Any one other factor such as the difference in color will kill the price of that diamond. Having said that if you’re a person who is looking for a particular diamond within a very specific range in terms of depth, table, symmetry, fluorescence, girdle, cutlet, polish, etc. . .as well as the color and clarity, I think Blue Nile is a great option.

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avatar Tripping68

It would seem that an investment grade, high quality GIA certified diamond could be a reasonable choice that would maintain or even increase its value with time. Moreover, one would be able to wear and enjoy this investment, unlike stocks, or a commodity such as soybeans.

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avatar AJSG

Love the judgmental spew. If it is your money, spend how you like. If I want to work my butt off and purchase a diamond, however expensive (or cheap), with that money – well that is my business. It is all personal taste, preference and what you can afford to do with your funds. Now, if you’re purchasing jewels instead of paying rent or car payments, you’ve got all sorts of other issues no one here can help you with. But some people are not broke ass, we did crazy things like went to college, got professional jobs and can afford a few thousand dollars for an engagement ring. And I also agree with Rhonda, the article is so skewed as not even to be worth reading.

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avatar Luke Landes ♦127,480 (Platinum)

Which part of the article on this site was judgmental? Did you read it? The article didn’t say anything about how people choose to spend their money.

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avatar Raj

If you want to pay for a name, then go ahead and spend up to 50% more for a Tiffany’s diamond. My fiance and I were more interested in overall value and top quality than a brand. When it comes down to it you really have make sure that what you are buying is actually worth the price. We ended up getting a gorgeous 2.0ct H VS2 round brilliant that came with an AGS Diamond Platinum Report from Blue Nile and we couldn’t be happier. I know I can’t list any websites for fear of spam, but trust me, there are good sources out there to help you find select a good diamond. Online Diamond Buying Advice is one of them.

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avatar Mark Lavender

Some brand names do use better quality diamonds, settings hand-crafted (not mass produced) and warranty/details are in the price. You can surely find nicely priced diamonds at small mom-pop shops but you still have to be careful as everyone is trying to make a buck these days.
you normally get what you pay for.

In regards to carat.cc (carat london) comment they are very cheap south korea made CZ. They don’t actually make their own setting or stones as they purchase them from a korean company Trion (www.trions.com)

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