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Apr 29

The Diamond Certification Dilemma

AGS, EGL, GIA, or IGI? Does it impact price?

The debate over diamond certification and grading is not new, but the increasing growth of Internet diamond jewelry sales has fired up this debate and brought it to the consumer’s doorstep. Diamond jewelry shoppers are overwhelmed by information, some accurate, some not, but mostly confusing.

The purpose of this article is not to settle the debate, but merely to provide a real world perspective for what I’ve seen evolve over the last decade from within the industry of diamond dealers, to the street for the diamond shopper.

Ten years ago buying a diamond or diamond jewelry was a magical experience requiring the consultation of an expert. Diamonds were bought and cherished. Today it is a dog-eat-dog Internet world, where diamond dealers are “perceived” not to be trusted and consumers are educated to the point of commoditizing something that was once precious and rare.

The allure is gone, trusted expertise dwindling, and the debate over diamond value rages on. In my opinion, this is not a good thing or a bad thing; it is just the result of an evolving industry. Just as in any industry there is a continuum of change and control, with the sellers at one end and the buyers at the other. Sometimes the change goes too far in one direction or the other, but over time control comes back to balance because of basic economics. The diamond industry is in the middle of this change.

The diamond certification is one way diamond dealers are differentiating their product. With so much information available on diamond education, the consumer has become a self-proclaimed expert and is in search of the perfect diamond at the cheapest price. When making an investment in a fine quality diamond it should be certified by an accredited independent gemological laboratory and of course purchased from a reputable dealer. The most popular certifications being discussed today are:

– GIA – Gemological Institute Of America (founded 1931)

– AGS – American Gem Society (founded in 1934)

– EGL – European Gemological Laboratory (founded 1974)

– EGL USA (EGL USA is not affiliated with any other EGL labs outside North America. Founded 1977)

– IGI – International Gemological Institute (founded 1975)

Let me address the most common consumer questions about certification:

1. Are all certifications created equal?

Based solely on reputation, not all certifications are created equal. This is fact in the diamond industry, there are biases in the marketplace and this also varies by what country you are in.

In the United States, GIA and AGS, are the market leaders, the most trusted sources. For that reason a diamond graded by either one of these institutions will be more expensive than like diamonds graded by their competitors, period. Conversely, expect a discount for EGL and IGI graded diamonds.

The debate is not purely about reputation, but about standards of quality. No matter how you look at it a diamond is still graded by a human and open to subjectivity. Therefore, the more standardized the tools and strict the process the more consistent the results. GIA and AGS founded the standards and have refined them over the last 75 years. This is why comparing two like diamonds with the same grade for color, clarity and cut, the EGL and/or IGI diamonds will be cheaper. It is assumed it’s off by at least one grade, e.g., graded F color by EGL may be grade G or H by GIA. It’s a common assumption in the industry that IGI and EGL diamond grades are softer than GIA and AGS.

For now the consumer just needs to understand that these biases exist in the marketplace and drive pricing. An important factor driving the increase of EGL and IGI certified diamonds into the market is the commoditization I mentioned earlier, when diamond grades are easier to get it increases the margin for the dealer.

2. Will my diamond be more valuable with a certification?

A diamond is not more valuable with a certification per se. A diamond can be sent to any grading lab and receive a certification at any time (note it should be un-mounted). The initial value of the certification is two fold, first it gives the credibility at time of purchase that it has been independently graded. Secondly, if you ever want to sell or trade your diamond, the certification will make this process easier.

3. How do I know the certification is for the same diamond?

This is a trickier question, and why a diamond shopper still needs trusted sources and experts. A diamond certification provides detailed criteria about the diamond, including specific measurement data. One way to know for a fact the certification goes with the diamond is the measurements, this requires specialized diamond measuring tools. If you need to verify a certification/diamond combination I suggest taking it to an independent jeweler who can provide you with a Sarin Report, a high-tech automated cut grade and diamond measuring device.

Another way a professional can verify your diamond and certification is by clarity grading. A diamond’s clarity is akin to fingerprints, no two diamonds are alike. A professional jeweler can tell you the exact location of the clarity birthmarks, feathers, inclusions, etc. and verify the certification.

4. Should all diamonds be certified regardless of size?

I frequently get questions about whether or not all the diamonds in the ring are certified. It is not necessary or recommended to certify multiple small diamonds in a ring. Certification is reserved for larger center stone diamonds, .75ct and greater. While you can get all the diamonds certified, it doesn’t add any value and it’s expensive.

As a diamond shopper your choices are endless, what’s important to take away from this article is the understanding that certification is not a guarantee of value, but merely one more decision that impacts price. A diamond shopper will need to make this decision along with color, clarity, cut, and carat, in your search for the perfect diamond at the best price.

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