EGL- price matches less strict grading??

[havernell]

I am not in the market for a diamond, so this post is mostly a think piece/ conversation starter.

A lot of posters on here warn shoppers against buying an EGL stone because "EGL is known to be less strict in their grading". This means that, in theory, if EGL would grade a stone G VS2, then GIA/AGS would grade the same stone as H SI1. For sake of conversation, we'll set that as a given.

However, the flip side to this is that EGL stones also cost less. A quick search on the Whiteflash website reveals that a 1 ct G VS2 EGL diamond costs about $5,000. Meanwhile, a 1 ct H SI1 GIA diamond is also about $5,000.

So, if that EGL diamond is "really" an H SI1 instead of a G VS2, you are still getting the same grade of diamond for the same price (assuming you can get similar cut proportions, which I don't think there is any reason to believe you could not as long as you were willing to put in the time to do a good search- there are certainly EGL stones that score well on the HCA).

So, if you are essentially getting the same stone for the same price, why is EGL so "bad"?

The only real difference I can see is that EGL stones don't qualify for upgrades under some vendors policies and also don't have as good a resale value. However, lots of people neither want to upgrade or sell, so for them, is a nice EGL stone really as horrible as some posters here make them out to be?

As Linda Richmond from SNL would say- "discuss!"

 

[pricescope]

We've done this small grading survey three years(!) ago. We don't know whether quality/consistency of EGL-USA improved/changed since then...

It is OK to buy an EGL graded diamond and you might find a good deal as long as you know what you are doing and what you are getting.

People who do not know about difference in the grading can get very upset to learn later that the diamond has can be graded differently by another lab or appraiser. In this case you can forget that you paid less and become angry at your vendor.

 

[oldminer]

"It is OK to buy an EGL graded diamond and you might find a good deal as long as you know what you are doing and what you are getting. "


Leonid is telling you the truth. We don''t like to see consumers get upset for any reason. I''d suggest another version:
It is OK to buy any diamond you like, but you are very unlikley to find a good deal if you don''t know what you are doing."

Nearly all EGL graded diamonds have a somewhat larger discount generally applied to them versus GIA or AGS graded diamonds. Every so often, an EGL diamond is graded just like it might have been graded by GIA and that particular diamond may be a very good deal. Knowing enough to catch one of those elusive bargains is not the easiest thing for a dealer to do, let alone a beginner. You might just happen to have it occur by accident if you are just plain lucky. We''ve seen it happen more often than people winning the million dollar lottery, so don''t give up hope.

 

[strmrdr]

Date: 5/21/2007 1:50:29 PM
Author:havernell
I am not in the market for a diamond, so this post is mostly a think piece/ conversation starter.

A lot of posters on here warn shoppers against buying an EGL stone because ''EGL is known to be less strict in their grading''. This means that, in theory, if EGL would grade a stone G VS2, then GIA/AGS would grade the same stone as H SI1. For sake of conversation, we''ll set that as a given.

However, the flip side to this is that EGL stones also cost less. A quick search on the Whiteflash website reveals that a 1 ct G VS2 EGL diamond costs about $5,000. Meanwhile, a 1 ct H SI1 GIA diamond is also about $5,000.

So, if that EGL diamond is ''really'' an H SI1 instead of a G VS2, you are still getting the same grade of diamond for the same price (assuming you can get similar cut proportions, which I don''t think there is any reason to believe you could not as long as you were willing to put in the time to do a good search- there are certainly EGL stones that score well on the HCA).

So, if you are essentially getting the same stone for the same price, why is EGL so ''bad''?

The only real difference I can see is that EGL stones don''t qualify for upgrades under some vendors policies and also don''t have as good a resale value. However, lots of people neither want to upgrade or sell, so for them, is a nice EGL stone really as horrible as some posters here make them out to be?

As Linda Richmond from SNL would say- ''discuss!''

mainly because you don''t know what grade it would get from GIA or AGS to compare.
If its egl USA it will likely be close if its egl-Israel it may be 2 grades off on both.

 

[Regular Guy]

Date: 5/21/2007 3:29:18 PM
Author: strmrdr

Date: 5/21/2007 1:50:29 PM
Author:havernell
I am not in the market for a diamond, so this post is mostly a think piece/ conversation starter.

A lot of posters on here warn shoppers against buying an EGL stone because ''EGL is known to be less strict in their grading''. This means that, in theory, if EGL would grade a stone G VS2, then GIA/AGS would grade the same stone as H SI1. For sake of conversation, we''ll set that as a given.

However, the flip side to this is that EGL stones also cost less. A quick search on the Whiteflash website reveals that a 1 ct G VS2 EGL diamond costs about $5,000. Meanwhile, a 1 ct H SI1 GIA diamond is also about $5,000.

So, if that EGL diamond is ''really'' an H SI1 instead of a G VS2, you are still getting the same grade of diamond for the same price (assuming you can get similar cut proportions, which I don''t think there is any reason to believe you could not as long as you were willing to put in the time to do a good search- there are certainly EGL stones that score well on the HCA).

So, if you are essentially getting the same stone for the same price, why is EGL so ''bad''?

The only real difference I can see is that EGL stones don''t qualify for upgrades under some vendors policies and also don''t have as good a resale value. However, lots of people neither want to upgrade or sell, so for them, is a nice EGL stone really as horrible as some posters here make them out to be?

As Linda Richmond from SNL would say- ''discuss!''

mainly because you don''t know what grade it would get from GIA or AGS to compare.
If its egl USA it will likely be close if its egl-Israel it may be 2 grades off on both.

Storm,

NGI (not good enough),

The poster stipulates what you do, and says you mostly win...if not come out ahead (if, as Oldminer says, you win the lottery, and get it as a match). We can do the "Pricescope your diamond" and see this...picking conservative to get what you want, and still saving money...

 

[JohnQuixote]

For the well-educated shopper in a live market, buy away. Train your eye and "buy the diamond, not the paper."

It's never a bad idea to verify you're getting what you think you are. I'm sure appraisers are pleasantly surprised when a consumer comes in with a 'soft' report and states, up front, he's aware it might not be up to the strictest trade standards.

Some companies - us included - don't extend future trade-up options to non AGS/GIA graded stones. This has nothing to do with the diamonds themselves; it has to do with the need for strictness and consistency in our sight-unseen offerings.

 

[havernell]

Date: 5/21/2007 3:29:18 PM
Author: strmrdr
mainly because you don''t know what grade it would get from GIA or AGS to compare.
If its egl USA it will likely be close if its egl-Israel it may be 2 grades off on both.

Okay, I see your point. But then the example can be adjusted as such:

If you can find an F VS1 EGL-Israel stone and an H SI1 GIA/AGS stone with the same specs for and equal price, is there any reason not to get the EGL?

I guess I just posted this because so many posters seem to have a knee-jerk reaction to scream "NO!" whenever someone asks about an EGL stone due to the more lenient grading. However, those posters seem to not be aware of/ take into account the price differential between EGL and GIA/AGS that actually seems to make similar stones from each lab comparable in price (if the EGL stone grades are lowered accordingly using GIA/AGS standards).

It seems that the experts here are saying that if a consumer is educated about cut and understands how to compare the grading methods used by each lab that, in the end, there isn''t a strong reason to go with one particular lab over another (unless the buyer seeks to upgrade later, which I know for some is a valid consideration).

Any other comments/things to consider? For those of you non-expert posters who have warned others against EGL in the past, are there other factors that have not been mentioned thus far that make you offer such advice?

 

[neatfreak]

I think the reason I warn people from buying them is they are usually complete newbie diamond buyers, without the knowledge to successfully navigate the world of uncertified diamonds and diamonds from EGL, etc.

Since as you say, it would be the same thing pricewise, why gamble that it is ONLY 1 color/clarity grade off when you can buy GIA/AGS and be pretty sure that it''s accurate?

Also, the EGL stones don''t apply to upgrade policies...which are important to many people.

 

[Regular Guy]

Date: 5/21/2007 10:08:27 PM
Author: havernell
Any other comments/things to consider? For those of you non-expert posters who have warned others against EGL in the past, are there other factors that have not been mentioned thus far that make you offer such advice?

Odd that for a website dedicated primarily to cut, we seem to entirely not talk about that issue whenever this topic comes around.

I'd like to hear from experts about this.

Since for years, AGS has represented ideal with respect to look & proportions, and only later has refined it...I have felt pretty sure that any diamond cut to those specs would no way be sent to EGL, when it could make AGS0.

How about middling options? For years, GIA had no cut grade. Why would people send to EGL before, when they could have sent to GIA. Good question. But now, especially, that GIA DOES have a cut grade...should I think EGL options will rise. Of course, they post proportions, too, but I've never once heard anyone repeat twice the parameters required to make EGL's top cut grade.

I'm just guessing that, on top of the lack of assuredness users will have with EGL, you have possible to probable irregularities with respect to cut.

And...I can't say that I've heard an expert report this...so it is completely unverified. I'd like to hear more about this. Meanwhile, it is just my guess.

 

[havernell]

Date: 5/21/2007 10:13:13 PM
Author: neatfreak

Since as you say, it would be the same thing pricewise, why gamble that it is ONLY 1 color/clarity grade off when you can buy GIA/AGS and be pretty sure that it''s accurate?

I hear you on what you said, especially for people who don''t want to take the time to learn about diamonds and just need to buy one fast on the internet. But, for every one of these people there are other people who want to buy from a local jeweler who does not have a GIA/AGS stone with the specs they want in stock. Or someone who wants a fancy cut stone with certain specs and there just aren''t a lot available, etc...

Also, your statement above is something else I wonder about when people say to avoid EGL. From what I know, it is not true to state that GIA/AGS grading is "accurate" or "right" and EGL is "inaccurate" or "wrong" in their grading. As gemologists have posted here in the past, grading is subjective no matter what lab is doing the grading. Two GIA graders can grade the same stone differently (and as the study that Leonid posted said, GIA and AGS have also graded the same stones differently at times). So, someone who buys an EGL stone is not getting an "inaccurately" graded diamond because their stone was graded using legit and standardized methods. They are just different from other labs methods, and none of them are inherently "better" than another.

I don''t mean to sound like I am picking on anyone and certainly do not want to instigate any arguments! And, trust me when I say I dont'' have any reason to defend EGL. But I''m an analytical person by nature and just have the urge to question all logics that seem to be partially unexamined. I apologize if I''m reaching the level of annoying now!

 

[neatfreak]

Date: 5/21/2007 10:42:22 PM
Author: havernell

Date: 5/21/2007 10:13:13 PM

Author: neatfreak


Since as you say, it would be the same thing pricewise, why gamble that it is ONLY 1 color/clarity grade off when you can buy GIA/AGS and be pretty sure that it''s accurate?

I hear you on what you said, especially for people who don''t want to take the time to learn about diamonds and just need to buy one fast on the internet. But, for every one of these people there are other people who want to buy from a local jeweler who does not have a GIA/AGS stone with the specs they want in stock. Or someone who wants a fancy cut stone with certain specs and there just aren''t a lot available, etc...


Also, your statement above is something else I wonder about when people say to avoid EGL. From what I know, it is not true to state that GIA/AGS grading is ''accurate'' or ''right'' and EGL is ''inaccurate'' or ''wrong'' in their grading. As gemologists have posted here in the past, grading is subjective no matter what lab is doing the grading. Two GIA graders can grade the same stone differently (and as the study that Leonid posted said, GIA and AGS have also graded the same stones differently at times). So, someone who buys an EGL stone is not getting an ''inaccurately'' graded diamond because their stone was graded using legit and standardized methods. They are just different from other labs methods, and none of them are inherently ''better'' than another.


I don''t mean to sound like I am picking on anyone and certainly do not want to instigate any arguments! And, trust me when I say I dont'' have any reason to defend EGL. But I''m an analytical person by nature and just have the urge to question all logics that seem to be partially unexamined. I apologize if I''m reaching the level of annoying now!

I do think one can be better than the other, and I think that more often than not, a GIA or AGS stone will be graded accurately. Accurately to me is if an independent appraiser would come to the same conclusion as the grading company.

I def. think that there is a major difference in the consistency of the grading done by GIA/AGS and EGL labs. If I want a G color diamond, and I pay for a G color diamond, I don''t want to get an I! So that''s why I tell newbie diamond buyers in general, to stick with GIA or AGS, because yes I believe in general, they they are a safer bet.

If you understand stats at all you''ll understand where I''m going here. If you randomly select a number of stones from AGS, GIA, and EGL and then have a number of random ind. appraisers grade each stone without the cert in front of them, I bet the number of times that the certs "match" the opinions will be much greater for the AGS/GIA stones.

There is a reason for the reputation of these labs, and that is because they are MUCH more consistent and ACCURATE with their grading. Just my opinion though!

 

[havernell]

Date: 5/21/2007 11:00:38 PM
Author: neatfreak

If I want a G color diamond, and I pay for a G color diamond, I don''t want to get an I!

Hehehe. This gets back to my original point. To be technical, you can''t just say you want a "G" color, rather you have to specify which lab''s definition of a G you want. If you want a GIA "G", an educated consumer can pay the same price for an EGL E or F and get their GIA "G". If you buy an EGL "G" you really will not have "paid for a G color diamond" (as defined by GIA) since you will have paid a lot less than for it than for a GIA "G".

So yes, an uneducated person could be upset thinking they got a "deal" on an EGL G and mistakenly think it will equal a GIA G. But those who come to PS usually get educated pretty fast (myself included), and could hopefully soon make an educated decision.

Author: neatfreak

If you randomly select a number of stones from AGS, GIA, and EGL and then have a number of random ind. appraisers grade each stone without the cert in front of them, I bet the number of times that the certs ''match'' the opinions will be much greater for the AGS/GIA stones.

As an unrelated point, if the above is true (which I would agree with you that is probably is, although we have no statisical proof), I wonder if that is because the appraisers we hear about on PS are usually GIA graduates? Meaning that they grade closer to the GIA standards because that''s what they were trained in. Kind of an endogenous bias. Do any experts know if most EGL graders graduate from GIA or from somewhere else? This would be interesting to know...

Anyhow Neatfreak, thanks for making this an interesting discussion!!

 

[JohnQuixote]

 

[neatfreak]

Date: 5/22/2007 2:23:22 AM
Author: havernell

Date: 5/21/2007 11:00:38 PM

Author: neatfreak


If I want a G color diamond, and I pay for a G color diamond, I don''t want to get an I!

Hehehe. This gets back to my original point. To be technical, you can''t just say you want a ''G'' color, rather you have to specify which lab''s definition of a G you want. If you want a GIA ''G'', an educated consumer can pay the same price for an EGL E or F and get their GIA ''G''. If you buy an EGL ''G'' you really will not have ''paid for a G color diamond'' (as defined by GIA) since you will have paid a lot less than for it than for a GIA ''G''.


So yes, an uneducated person could be upset thinking they got a ''deal'' on an EGL G and mistakenly think it will equal a GIA G. But those who come to PS usually get educated pretty fast (myself included), and could hopefully soon make an educated decision.

Author: neatfreak


If you randomly select a number of stones from AGS, GIA, and EGL and then have a number of random ind. appraisers grade each stone without the cert in front of them, I bet the number of times that the certs ''match'' the opinions will be much greater for the AGS/GIA stones.

As an unrelated point, if the above is true (which I would agree with you that is probably is, although we have no statisical proof), I wonder if that is because the appraisers we hear about on PS are usually GIA graduates? Meaning that they grade closer to the GIA standards because that''s what they were trained in. Kind of an endogenous bias. Do any experts know if most EGL graders graduate from GIA or from somewhere else? This would be interesting to know...


Anyhow Neatfreak, thanks for making this an interesting discussion!!

I don''t think it has to do with bias from GIA or AGS. I think the definition of what a G should be should (and does generally) come from a set of master color stones, OR from machines specifically designed to test color (colorometer I think it''s called?). So it becomes less subjective that you are making it because ALL of these companies should be using the same metrics in determining what color is what. But some companies are more lax in their definition of whether their "G" stone is really a "G" or not, in stats you could call this having a significantly larger margin of error, making EGL estimates much less likely to be "right". And I DO think we have at least qualitative evidence here, as most, if not all, the appraisers that frequent these boards would agree that more often than not, EGL is off. And more often than not, AGS and GIA are on target.

And I think the key here about your assumption that there are just different grading systems, is that if you go and try to sell your EGL "G VS2" stone on the open market you are going to get a MUCH lower price than you would for the same stone (i.e., labelled G VS2) with an AGS certificate. This signifies to ME that indeed EGL being softer in their grading, is grading INCORRECTLY. There is only ONE color scale for diamonds and everyone should be using the same scale according to the market, otherwise if EGL was really "separate but equal" there would be no price difference between EGL and AGS/GIA. So that''s why EGL diamond are often much lower in price because there is much more uncertaintly with what you''re getting.

Since most consumers are risk averse, especially when it comes to purchasing something they really have little education about, why take the risk??? They would rather pay a "risk premium" (aka the price difference for a GIA) to have their risk of overpaying (possibly significantly) drastically dropped. Same reason why most of us buy insurance. We want the security and are willing to pay for it.

(Sorry for all the stats and econ talk, I do stats/econ research for a living!

)

 

[Regular Guy]

 

[oldminer]

I have had a diamond at GIA for a month now getting some ID work done. One thing which influences dealers to submit diamonds to labs other than GIA is the speed at which the work gets back to them. It costs a significant amount of money to be delayed in turning over a relatively low margin product. The number of "turns" per year plays a major role in financial success at the dealer level.

Another thing touched upon is that different diamonds are going to different markets. Many or most markets don't care so much about a cut grade as we do on Pricescope. Our part of the diamond trade is minute compared to the commercial portion which looks at color/clarity/shape/weight and the overall important bottom line cost. EGL reports come faster and cost less. Those are real benefits for a majority of diamond dealers in the overall real world. The "cert" is not the major thing for dealers. The "cert" plays more to the public demand. Many retailers will say every lab and every cert is "the same". We know better, but again, we are very much in the minority.

 

[havernell]

Date: 5/22/2007 10:13:59 AM
Author: neatfreak

I think the definition of what a G should be should (and does generally) come from a set of master color stones

There is only ONE color scale for diamonds and everyone should be using the same scale

This all is making me more interested in learning how color is graded in diamonds!

I''m not sure its correct to say that there is only ONE true color scale for diamonds (industry people, correct me if I''m wrong). What independent body sets this one color scale? Who was it that got to decide how much color change to allow between each color grade? Who enforces this scale across labs? I''m curious.

Independent appraisers- whey you tell a client a stone is a "G" color, whose G color is it? Is it technically a G color as defined by whoever certified your master stone set? Or is it based on your training- would an appraiser whose degree is from GIA consistently grade differently than an appraiser who graduated from another program? What is to stop an independent appraiser from making up their own color scale all together?

Correspondingly (a quesiton for the experts), from reading other posts it seems like there is more than one "producer" of master stone sets/ more than one place to get them "certified" as master stones (either diamond or CZ). If this is the case, I would think that there could be some small difference between the sets. Are there industry regulations on master stone sets (if so, who sets these)? How do companies/labs determine the color of their master stones and how does using different sets affect color grading?

Finally, Johns analogy of golf courses makes perfect sense on strictness. But I guess what I"m trying to say is that if you realize PGA courses are more strict than your average-run-of-the-mill course, then you can figure out that John would have to shoot a 20 under par on the regular course to "equal" Tiger Wood''s par score on a PGA course. It''s all about understanding how to correct for differences in order to get the same effect in the end - understanding that comparing par to par won''t work and that a correction is needed.

I''ll concede that its less work/effort to not have to make that correction when purchasing diamonds, but it still can be done (and may make sense for some people who want a particular stone/ want to work with a particular local vendor/etc..) I guess I would just be inclined to explain the necessary corrections needed when looking at EGL stones to posters and then let them make their own decision rather than just giving them a blanket "avoid EGL stones at all costs" line.

Sorry I''m so wordy! Thanks everyone for the education.

 

[oldminer]

There is no regulatory agency or even a meaningful agreement about what the color is of any color of diamond. We mostly use the GIA system, but even the GIA trade lab does not use exactly the same system taught to students when they attend the GIA educational arm. If there were regulations, you'd see some lab owners brought up on charges somewhere and convicted, but we are not there today.

From research we know where the mid point of G color is based on what GIA does and not what they teach. Where the edge is which becomes F or H is more a gray area, but there is a point which is known to us where statistics can show F or H defintely begins even when the lab does not always grade it that way.

Human grading is less than 70% in agreement from grader to system regardless of the number of expert graders who grade color by eye. They may agree more often than 7 out of ten times, but they are not always correct 7 out of ten times even when they agree. Agreement on a single ciolor when a diamond is shown to several experts is rarely a unanimous consensus and it is not objective fact. We can do better, but the trade sort of likes a little wiggle room..... Can't say I blame anyone for prefering the status quo for as long as possible or until profits are negatively impacted.