Question about second hand diamonds

[Sharon101]

Hi everyone, my question is, what happens to all the trade ins? Are they sold as new diamonds? Im guessing there wouldnt be much difference between a preloved diamond and a brand new diamond. But we are told the second hand market is much cheaper, and that demand is low for a used diamond. So, are retailers and on line vendors selling second hand diamonds, and does it make a difference?

 

[marcy]

I don''t know this first hand but a nephew of mine worked for a decent to high end jewelry store and he said they pull out the stones, melt down the gold and re-cut the larger stones. He didn''t say what they did with smaller stones. One of our mall jewelry stores has an estate sale every 6 months where they sell used jewelry at 40% on the dollar.

 

[iheartscience]

I think of the second hand market more as an individual selling their ring, or a jewelry store selling an individual''s jewelry on consignment, buying it back from them, etc. I''ve never really thought of it as the actual diamond being second hand, but thinking about the number of upgrades I see on Pricescope, there are probably more than a few diamonds on PS vendor''s websites that are second hand! I don''t know how much it matters...I don''t think I would want a pre-owned diamond for the same price as a new one, but I also think ignorance is bliss. Hmm...interesting!

 

[oldminer]

A diamond in perfect condition is not considered "used" when it is being sold. ALL diamonds are very old material and the date of cutting has little to do with value so long as the cutting is modern and the polish of the stone''s surface is like a freshly cut stone.

You can''t usually sell a diamond for "retail" unless you are in the business, so a consumer generally finds that they can only sell for a portion of retail value to a dealer who has cash and says "We buy diamonds." There is a good sized profit is this element of the business. It isn''t a gold mine, but it beats a lot of other jobs. The downside is the time it takes to resell what has been bought. Money costs interest so turnover speed is an essential. A buyer has to know how to sell for a profit and it takes time and patience to hone the necessary skills.

Diamonds are very liquid if a person is willing to take a large loss. The same could be said for selling a house and expecting to call someone in later today who will write you a check. Don''t expect to get the full price for a rushed sale. Homes are liquid, but the loss is inherent if the time is not spent marketing them. All markets suffer fluctuations and the analogy to a home is not a perfect one, but it functions. You can use a car or a fine piece of furniture to make similar analogies. Any rushed sale means the value is less important then the liquidity.

Whe I buy a diamond the point of it is to make money. I don''t buy to lose any more than the next buyer. However, I have had losses and unexpected things which cost long extra time in making a sale. One learns from this and perfects the buying over a long time. One sale or one purchase doesn''t come close to being an education in this field.

 

[denverappraiser]

Demand is low for used wedding rings. Diamonds recycle just fine.

When you trade in a diamond ring, or sell it to a secondhand dealer, what normally happens is that they take the stone out and recycle the metal at a refinery. This gets them on the order of 95% of the gold price listed in the newspaper but it produces nothing for the craftsmanship and design, things that consumers often pay quite a bit for with new purchases. The diamond is then inspected for damage and anything present is repaired. If it’s an older sort of cut, they might do a full recut or they might just leave it alone. It will be decided on a case by case basis. If the stone doesn’t have a lab report or if the one it has isn’t saleable, it’s then shipped off to a lab to be regraded and get new paperwork. When it comes back it gets resold as a ‘new’ stone.

There are often several different people involved in the above chain and all are in it to make a profit. Few people are getting rich off of this but there is money to be made here. The buyer sells it to a wholesaler who does the repairs and such, they sell it to a retailer who sells it to a new owner who then sets it into a new ring.

The diamond itself is just a rock. 'New' and 'Used' don't have the same sorts of meaning that they do with manufactured products (like jewelry).

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Sharon101]

First I would like to thank all the experts who explained the system with so much clarity and truthfulness. I understand everything that has been explained, and thought as much anyway.


But it sure is more pleasant to think of your new diamond as if it were just cut yesterday, with all the advantages of todays newest technology and advancements. Its almost too much to strip this illusion away. Yes....ignorance is bliss!!!!

 

[denverappraiser]

If you’re shopping for the premium cut type stones that are popular here you are almost certain to get a newly cut stone. The technology involved in cutting has changed considerably in the last few years and although approximately every stone ever mined is still out there somewhere, the new ones tend to be distinctive. If it’s an important issue, your jeweler can probably arrange to get you stones where they know the history of the particular stone you’re considering.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[Nicrez]

Hmmmm, I think an antique or estate ring is often FAR more desirable to me than a new ring, since the workmanship and craftsmen of days gone by are so impossible to find lately. I personally, would only get a ring like that because I love the history that sort of goes along with an old diamond millions of years old and the setting made in an era far behind me. But that''s just me.

To date, I can''t find one modern setting I don''t pick apart for quality, and somehow the shiny white of the gold is just not my cup of tea anymore. I like heirlooms, so for me, something that WAS once an heirloom has the most appeal...

Diamonds are often unmounted, repolished, and the chips and old girdles are cleaned up to more sellable standards. The settings are often scrapped if they are too cheap or typical of a period that is not sellable (see the 80''s...

) and sometimes if it is more precious in it''s setting it will remain set as it is and the diamond in tact. It all depends on if the setting is of a marketable quality. Profit here can be good if you go from direct seller to retail on a bigger ticket item. But that is rare, and in fine collectable, there are dealers between each stage and an item may change hands several times before it hits retail. Usually though, the prices are higher on these because they also warrant a collectables price. Things that are unique or one of a kind, things with provenance, or signed pieces generally remain intact, although I have heard of people swapping out expensive stones from luxury brand settings and replacing cheaper stones, selling the expensive stone thus getting higher profit. That''s been known to happen as well. Shame though how often old rare pieces are destroyed by people who don''t know any better...

I guess I''m minority in that thought though!

 

[surfgirl]

Nicrez, you may be in the minority, but could you scootch over a bit so I can sit down next to you? I couldn''t agree more!

 

[say]

This brought up a similar question. There are many vendors that offer "trade up" policy. Basically, you can trade back your diamond for a more expensive diamond. I would guess these traded-in diamonds can be re-sold? Does these diamonds get back into the "system" such as the wholesale database. I cannot imagine these diamonds being labeled as "used". I guess we will never know?

Say

 

[strmrdr]

Date: 11/2/2007 6:41:15 PM
Author: say
This brought up a similar question. There are many vendors that offer 'trade up' policy. Basically, you can trade back your diamond for a more expensive diamond. I would guess these traded-in diamonds can be re-sold? Does these diamonds get back into the 'system' such as the wholesale database. I cannot imagine these diamonds being labeled as 'used'. I guess we will never know?

Say

no they aren't labeled.
There is actually a PSer who has another PSer's trade in and loves it! (the more I think about it there is more than one)
Its a branded super-ideal that was traded in then regraded by AGS and resold.
If that couldn't happen there would be no trade in policies.
But consumers getting peanuts for old diamonds is totally wrong.
DeBeers did its best to keep re-sale prices as low as possible and it hasn't recovered from the interference yet.
Mainly because the trade makes a ton of money doing so.

Wifey2b's diamond was a recut to Jon's specs of a stone he took in on trade re-cut by his premium goods cutter and it doesnt bug me a bit.

 

[IHeartOldCuts]

I am happy to be in the minority with you, Nicrez and Surfgirl. Please dont get me wrong, I have nothing against modern cut stones, I think they are beautiful in their own right, just not my cup of tea. I prefer stones and jewelry that have this altogether different personality and almost a "soul" to them, ykwim?

I''ve gone over to the old side, and I cant go back

 

[iheartscience]

Date: 11/2/2007 6:03:05 PM
Author: surfgirl
Nicrez, you may be in the minority, but could you scootch over a bit so I can sit down next to you? I couldn''t agree more!

I agree with you and Nicrez completely regarding heirloom rings. I was thinking more along the lines of a round brilliant or another modern cut in a typical modern setting. That, I''d want to be fresh and new, particularly if I was paying full price. (Why, I''m not sure...I just would!)

An antique/heirloom piece would obviously be perfect in its "used" condition.

 

[Sharon101]

Date: 11/2/2007 9:18:56 PM
Author: thing2of2

Date: 11/2/2007 6:03:05 PM
Author: surfgirl
Nicrez, you may be in the minority, but could you scootch over a bit so I can sit down next to you? I couldn''t agree more!

I agree with you and Nicrez completely regarding heirloom rings. I was thinking more along the lines of a round brilliant or another modern cut in a typical modern setting. That, I''d want to be fresh and new, particularly if I was paying full price. (Why, I''m not sure...I just would!)

An antique/heirloom piece would obviously be perfect in its ''used'' condition.

Good and interesting points!

A used diamond looses its stigma when it is suitably aged to be considered antique or vintage.

Meanwhile, the majority of laymen buying or selling in the second hand diamond market are made to feel that it is an `inferior` product compared to the `new` market. It is percieved to be something to be ashamed of almost, ie to buy a pre owned diamond knowingly. Many people would be surprised to know that the new market also stocks these diamonds!!! It is something I had never thought about too much.

 

[surfgirl]

I''m not sure where you''re getting this "stigma" from Sharon? Maybe it''s different where you are? But the estate shop where I got my antique ering from, regularly takes in trade in''s as well, not only antiques. I was in there during the process of buying my ring and a couple came in and traded their 3 stone EC (a modern ring, not antique) for an even bigger monster EC. That 3 stone is a gorgeous ring and I dont think any of the rings in this shop are looked upon as being inferior because they''ve been previously owned (I''m talking of the more contemporary rings they have). I certainly wouldn''t think twice about owning one. Now, if we''re talking about some crappity thing in a pawn shop then yeah, I''ll pass, but a gorgeous stone is a gorgeous stone, no matter if it''s pre owned estate piece, or an antique, or never owned. At least to me it is..I''m an equal opportunity diamond owner, as long as they live up to my expectations!

 

[Sharon101]

Maybe stigma is not the correct word. And I fully understand about exceptional diamonds that are sold second hand and even at auctions as estate pieces. I am not myself dissing a diamond because it has been pre owned, especially as they are millions of years old anyway!!!!! And I am definately not saying that older cut diamonds are less desirable than new cut ones. So out of all the things I am not saying.....I am saying that the average person would be mildly to very surprised to know that the diamond they have bought, was a trade in a few weeks ago etc.

I believe that in most peoples minds the second hand market is clearly defined and seperated from the new diamond market. Most people enjoy holding on to that distinction even if it is false.

On another board Im on, there is a thread where a layperson is advising about how she saved a lot of money buying on the second hand market. She was trying to educate about how its not as bad as it sounds. The fact is that it does `sound` bad to the average person. And imo, the average person should know that the diamonds can in fact be the same!!!!

I am not putting any value judgements on any diamonds here myself. I am with you.....no predudice for a beautiful diamond. I have enough love for all of them!!!!

 

[stebbo]

Date: 11/2/2007 9:09:27 AM
The diamond itself is just a rock. ''New'' and ''Used'' don''t have the same sorts of meaning that they do with manufactured products (like jewelry).

Even a recut or repolish to better than original doesn''t alter the possibility that the diamond came from a divorce or broken-off engagement, bad omens for some. Conflict diamonds and those with culets are just rocks too but are punished for reasons of spirit, not physical condition.

I guess it''s lucky for vendors there''s little chance a consumer who cares will ever find out. But is it right?

There was a recent case in Australia where an Asian family brought a real estate broker to court for not disclosing the recent death in the house they just bought. They won.

 

[strmrdr]

Wanted too add that Wifey2b''s first engagement diamond came from a pawshop also and daily she wears a ring and on some days a pendant from a second hand shop all selected and bought by me :}
I refuse to buy chains new the markup on them is way too high so anyone that I get a pendant for either gets a second hand chain or I make my own.

 

[stebbo]

Todd apparently advertises his trade-ins as 'used'. I'd love to hear what sort of discount used stones must carry in order to sell.

 

[marcy]

A friend and I were at the mall today and she has a bracelet 4 months old with diamond accents which she just had checked. 20 out of 24 of diamond chips have fallen out. Her then FI bought the warranty policy on it so the store is going to fix it for her free. She wants to trade it in then for a nicer bracelet. I pointed out to her that since it was costing the store money to fix it; why are the going to do that if she is trading it in? So we asked the guy she''s been working with today and he said they would put it back in the case to sell it again. I don''t mind buying used jewelry as long as I know it''s used jewelry. If I bought something out of the case in a jewelry store I would expect it was "new".

 

[Rhea]

Eh, I just don''t care if I know if was someone else''s before or not. Part of that may be my love of vintage/antique jewellery, but I think it''s also who the stone is coming from. If the stone is coming from a dealer (such as WF or Wink - to pick on them) I know that it''s gone through all the checks and is what they say it is. If "used" stones were cheaper I''d doubt that a dealer would spend as much time on them, checking them, getting them re-certed, etc., and may not even take those stones back because they weren''t worth their time for the money they made.

A diamond is a diamond is a diamond (or sapphire or ruby - your choice of stones here).

 

[diagem]

Please understand that a Diamond (once cut and polished) is already considered a second hand (third, fourth, fifth, etc., etc....)

A Diamond is first hand only when the miner finds it in /on the ground

The majority of the Diamonds that reach jewelers/retail have traveled through an unknown number of hands...

Some with history and some without!!!

 

[Lynn B]

I for one LOVE LOVE LOVE the trade-up policy that some vendors offer, and if that means that I may be wearing a stone (or stones) that someone else once wore and traded up... hey, that's OK by me! It was already millions of years old when (he or) she had it... so what's a few more?!

I think I have read that most vendors do generally send returned stones back to a grading lab to be recerted... but that wouldn't even be a necessity for me. And honestly, I think if I had the choice, I'd say, "Skip the recerting (unless there was some real reason to indicate that it was necessary) and just pass along the savings, please!"

 

[jewelerman]

I have to agree with those on this thread that appreciate previously enjoyed jewelry and gemstones.The pieces of jewelry that i own and enjoy most in my collection are pre-owned. I know many piece''s history because i bought them from the original owner or family members who inherited the piece.I have no problem wearing pieces that I "rescued"from a pawnshop or thrift store. One trift shop in Idaho produced two great treasures...a late victorian rose gold and carved onxy watch fob for $15.00 and a 22 kt. yellow gold link bracelet weighting over a troy ounce for a staggering...79cents.I think jewelry with a past has a mistique that new pieces lack.I especially like old gold that has been hand engraved and that has a warm mellow patina from years of wear.