The Resale Value of Lab-Grown Diamonds

Article by Linley
Linley Shepard

We love speaking with current and potential MiaDonna customers to hear their thoughts, get their opinions, and answer their questions. Recently, we’ve been getting a lot of questions asking about the resale value of lab-grown diamonds. Keeping those who are interested in and those who own lab-grown diamonds in mind, the we put together a comprehensive resource covering all you need to know about reselling lab-grown diamonds.

Lab Grown Diamonds

As lab-grown diamonds have grown in popularity, one of the main questions we receive is whether or not a lab-grown diamond can be resold at a later date. Please let us be clear - buying an engagement ring or diamond, regardless of origin, with the intent to sell it in the future is not a good investment, but it’s not a worthless purchase. Many traditional jewelers tell customers that lab-created diamonds have absolutely no value, but this could not be further from the truth. Most earth-mined diamonds have resale value, and most lab-created diamonds will have a similar resale value as well.

Heroine Engagement Ring

The most important element of this question is related to the lack of understanding with regards to the resale value of earth-mined diamonds. Unless the diamond in question is extremely rare, it’s virtually impossible to sell an earth-mined diamond purchased in the last decade for more money than what you paid for it. There’s simply no reason why a jeweler would be compelled to buy your diamond at the market price when they could buy an identical diamond at the same price from any one of hundreds of wholesalers, who might offer better payment terms.

Lab Grown Diamonds

Unfortunately, this misunderstanding has been used as one of the biggest selling points by earth-mined diamond jewelers over the last 50 years. Customers are told their diamonds are not just a personal treasure, but also a valuable treasure, planting the idea that their purchase can be resold for an amount equal to or greater than what was originally paid. What these jewelers don't tell customers is that the second a person walks out of the store, the diamond's resale value drops to 30% of the purchase price - a 70% loss from the original cost.

Idyllic Engagement Ring

Regardless of origin, either man-made or mined, all diamonds are priced using an internationally accepted pricing system. This system is known as the Rapaport pricing method and it determines wholesale and retail pricing. Prices are generated first based on the “Four C's” of diamonds: carat, cut, clarity, and color. Then, whether they are lab-grown or mined is taken into consideration.

Traditional Engagement Ring

We’re seeing a very similar system for the resale of lab-grown diamonds emerging today, particularly within the online market. We encourage consumers to keep in mind that just because your local jeweler is not currently buying lab-grown diamonds does not mean that there is no resale value for them. Rather, these lab-grown alternatives are a relatively new product on the market and we need more time to see how this develops, just as we once did with earth-mined diamonds.