Nine Year Old Finds Diamond in Arkansas
$5 Million Victoria’s Secret Diamond Bra

Learn to Play the Certification Game

GIA New Cert-sm It is hard to play the game if you do not know the rules and that is what most jewelry stores are counting on when they sell diamonds with EGL, IGI, HRD, or other “off brand” grading reports.  What is this game being played every day in jewelry stores across the country?

Within the industry, it is common knowledge that EGL, IGI, HRD and other laboratories are more generous in their grading than the GIA.  Unless a diamond shopper does extensive research, they probably have no clue that there are significant differences in grading accuracy between the diamond grading laboratories and you can be sure that the local jeweler is not telling them.  The shopper thinks that just because the official looking document says a diamond is H color, it must really be H color.  Wrong!

It is our experience that EGL-USA graded diamonds tend to be off one color grade compared to GIA grading and EGL-Israel grading is often off two color grades compared to GIA grading.  Other grading aspects like clarity, polish, symmetry and fluorescence can vary too but it is the color that impacts the value of the diamond and it is a factor that is hard for the consumer to see.

The basic fact is that the type of grading report should not affect the price of the diamond.  After all, the fees charged for grading only differ a few dollars between the laboratories.  Why then do wholesale prices vary greatly for diamonds with the same grading but different laboratories?  It is because the grading is not the same. 

How different can the grading be?  Look at the real life example we discovered recently.  Compare the two diamonds with the same weight below and tell me, which one do you think is more valuable?

Pear, 2.73 carat, EGL cert, D color, VS1 clarity, depth 66.1%, table 59%, measurements 11.92 x 7.38 x 4.88 mm, VG polish, VG symmetry, No fluorescence

Pear, 2.73 carat, GIA cert, F color, VS2 clarity, depth 66.0%, table 59%, measurements 11.92 x 7.41 x 4.89 mm, VG polish, G symmetry, No fluorescence

At first glance, it is obvious that the top diamond with two color grades higher and one clarity grade higher must be the more valuable diamond.  This is part right and part wrong.  The top diamond was priced more than $4000 higher on the wholesale market.  However, closer examination of the specifications plus the fact that both diamonds are owned by the same wholesaler, reveals that these are the same diamond.  As is often the case with larger diamonds, the diamond is sent to the GIA first to see what grading it will get.  Then it is sent to the EGL in the hopes of getting a higher call on the grading.  How can the same diamond have different values?  The answer is that prices are based on “perceived” value and the higher grades on the report imply greater value. 

Sometimes the shopper has to share some of the blame.  Some shoppers want a “deal” so bad, they throw logic out the door.  For example, may shoppers know an EGL graded diamond will be less expensive than a GIA graded diamond and suspect they are not the same quality, but want the “deal” and will overpay to get the higher letters on the grading report even though they suspect the diamond is not that quality.  For example, if the same diamond is color graded G by the EGL and color graded I by the GIA, the consumer can probably purchase the GIA I color for less than the EGL G color price.  However, jewelers are counting on shoppers wanting the “deal” and paying more for the EGL G because they want to believe they are getting more for less.

A local client recently purchase her 1.5 carat round I color, SI1 clarity diamond at a local jewelry store because their price was about the same as our price and they had been buying from that store for many years.  However, she purchased an EGL graded diamond instead of the GIA graded recommendations we provided.  While the price might have been about the same, the value was certainly different.

Here is a diamond we recommended:
RD, 1.53 carat, GIA cert, I color, SI1 clarity, price $9323, depth 61.5%, table 58%, measurements 7.35 x 7.42 x 4.54 mm, VG VG N
[Excellent GIA cut grade, Excellent HCA rating (1.2)]

Here is an EGL diamond with almost the same specifications and our price:
RD, 1.53 carat, EGL cert, I color, SI1 clarity, price $7763, depth 62.5%, table 59%, measurements 7.31 x 7.35 x 4.60 mm, EX EX N

This $1560 price difference means that the shopper actually paid much more than they needed to.  Since the EGL diamond is priced less than a GIA J color, you can expect it to be less than a J color.

Are all EGL graded diamonds off compared to GIA grading?  Not all of them but the ones your jeweler is showing you probably are.  If the prices are different than the GIA graded diamonds, you can expect the color grading is different. 

What about AGS graded diamonds?  We had an AGS I color diamond that was damaged so had it recut and sent it to the GIA for grading, where it came back with a J color grade.  Then consider that many AGS graded diamonds are priced on the wholesale market at about one color grade lower than similar GIA graded diamonds.  If the AGS graded diamonds are priced less than similar GIA diamonds, you should assume they are lower in color than their grading report indicates.

If diamonds with certifications are off this much in grading, you can only imagine what the uncertified diamonds are like that are being sold every day, especially when they are already set in a mounting.

Okay, now that you know more about the game that is being played, what are you and other shoppers going to do?  I would suggest you take the same strategy that we recommend to our clients.  Since the GIA is the most accurate in grading, stick with GIA graded diamonds when you are purchasing.  The price of the GIA graded diamond is going to reflect the quality you are buying, why take a chance with the other grading laboratories that can be off 1 to 3 color grades and maybe a clarity grade or two.  Consumers just do not have the tools or the training to accurately grade the stones themselves so it makes the most sense to rely on the most accurate grading laboratory for important diamond decision making.


RELATED ARTICLES

http://grading.pricescope.com/

http://www.diamondsourceva.com/Education/Certification/egl-certification.asp

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Mithun

Great article! Its so sad that 99% of the consumers just blindly believe the cert their jeweller shows and make the purchases. Its all a cert game! good info.

diamonds

Great info, so only go GIA for Diamond certification

Thanks, nice article

Loose Diamonds

I agree that GIA is the best way to go. After much debate, we elected to offer only GIA diamonds, thereby relieving us of the obligation(and the consumer of the confusion) of explaining the differences between laboratories. Instead we simply explain why GIA is trustworthy and reliable.

Sarah Edenly

This is a very informative aeticle and im really very glad i read it! Made me feel quite worried that I havent know this until now! Thanks so much.

LoganOne

Thank you so much for this article. The more I read the more it seems that GIA is the only way to go when it comes to diamond grading. I knew that they developed the current grading system and the 4 C's, but the more research I do, the more it seems that their grading is the most reliable of all labs. Glad I know now because I wouldn't want to buy a diamond that was graded "loosely."

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name is required. Email address will not be displayed with the comment.)