Diamonds Are a Girl’s Best…Depreciating Asset?

by Lindy on July 12, 2011

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This is the story of a ring.

The Ring

A ring that wasn’t.

My husband scored it for 90% off when the economy started to tank and jewelry stores were dropping like flies in the dead heat of the summer.

His intention was to purchase any old ring solely for the opal stone, and have it redesigned into something (*cough*) more my taste.  It was to be a surprise wedding ring upgrade.

You see, I’m an opal girl.  My current wedding ring is an opal, and I’ve always loved it. But what girl would turn down an upgrade if it stared her in the face?  That’s what my husband thought too.

He was in the process of trying to get a hold of our friend the jewelry designer when I unknowingly foiled his secret plan…by finding the ring receipt he’d left on the dresser.  Hence, he was forced to fess up to his clandestine mission.

But my catching him was a blessing in disguise. After scrutinizing the receipt a little more, we noticed it said the words “lab opal,” and upon further internet searching we learned that’s just a fancy name for synthetic. The fire-sale jeweler had failed to tell him that part.

In the end, we decided it didn’t make much sense to invest in designing a new ring around a synthetic stone.

But now comes the hard part.  What do we do with the thing?

Alright folks, get out your math brains. If the ring was purchased for $80, which was 90% off retail, that would make the full retail price about $800, right?

So for a ring that originally sold for $800, you’d think we could turn it around get at least our $80 investment back, if not more, maybe. Right?

RIGHT?

Oh so WRONG.

After visiting one pawn shop and two jewelry dealers, the best price I’ve been offered is $40.  That’s about 40% of it’s gold weight value in grams.  If I turn on my best negotiating skills, I might be able to talk them up to 50% or 60% of it’s gold value, but that still wouldn’t get me near the $80 investment.  And unfortunately, the market for selling lab opals on eBay is pretty grim too.

So this whole ring thing has got me thinking:

A. The mark-up in the jewelry business must be insane!

B. For jewelry originally priced at $800 to suddenly drop to near nothing right after we take it home, that has to be the worst sort of depreciation ever.

C. Have we all been duped by the jewelry business into thinking that those shiny rocks are a worthy investment?

D. Does all jewelry depreciate this badly?  Or is it just the vast evil empire of synthetic opals?

In order to answer my questions, I turned to eBay.  Doesn’t eBay hold all the answers to life’s questions anyways?

And while I was there, I became distracted by shiny things.

(these shiny things)

This exercise answered none of my original questions, but helped me decide if I ever got a new wedding ring, I would buy it on eBay! Attach the word “vintage” to “opal” to “ring” and you have my attention.

But to get a more, um, complete answer, I did a little search on the depreciation of diamonds and found The Diamond Myth written at The Atlantic.

Though this article leans towards the theory that De Beers has duped us all with clever marketing, it does poignantly state that “the buyers, not the sellers, control the price” in the diamond resale business.

So it’s not necessarily that diamonds (or synthetic opals, or any jewels) lose their value over time.  It’s just incredibly difficult to find the right buyer.  And if you paid full retail to begin with, well then, getting your investment back on the resale market won’t come without a big hit.

It’s the same reason the blouse I once bought for $60 will only sell for $1 at my yard sale, because that’s what the market is willing to pay for it.

So the moral of the story is this: don’t try to sell your wedding ring.

As long as it has worth and meaning to you, that’s all that matters anyways.

And if you’re buying a new ring, the age-old retail rule applies: sales are your friends.

So, my lovely readers, back to eBay.  Cool place to get some sparkly treats, or way too risky?  Do you have any savvy jewelry buying tips?  Do spill.  And what should I do with this darn ring?

PS: I’d love to hear your wedding ring tales too.

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  • I worked at a high end jewelry store a couple summers while I was in college. The mark-up was insane! When the owner would come back from jewelry shows or would order anything, we automatically marked it up 315%. I was also amazed at the number of people who wouldn’t negotiate the price. That is one thing that I will always negotiate. We negotiated the price for my engagement/wedding ring and were able to get what we wanted at the price that worked with our budget.

    • Lindy

      Wow. 315%, eh?

      I always forget about that whole negotiating thing. It’s good to know that option is on the table in the jewelry market (and good to know you succeeded!)

  • Dy

    What a timely post. I’m in the process of divorcing and now I know what to expect when I go to sell my rings. Although having bought them at a pawn shop, I wasn’t expecting much return. Another site to try for selling jewelry is http://www.exboyfriendjewelry.com. They specialize in post-breakup jewlery sales.

    • Lindy

      What a great idea for a website. I knew I could count on all of you to come up with some great tips.
      If your ring originally came from a pawn shop, you’re already a little ahead of the game. But yeah, the return on jewelry can be pretty crummy.

    • Hah! That is a brilliant idea! Exboyfriendjewellery!

      I am wary of eBay.. I’ve been burned a few times (not for jewelery but for clothes).

      That’s very sweet of your husband to get an upgrade for you :)

    • Haha! ExBoyfriendJewelry — that name ALONE makes me want to visit the website! How clever!

  • I’d have to say that I think mark-up on those things is absolutely insane. Even looking at the cost of those things is enough to make a guy cringe and wonder where he’ll come up with the money if he is dead set on paying cash, and how long it will take.
    Good luck unloading yours.

    • Lindy

      Thanks! Apparently negotiating is a good idea for when you go to buy that ring. ;)

  • Kim

    It depends on the market – certified diamond rings on Craigslist go for half price. And as for DeBeers running up the price – price is whatever we decide as a society, and value is up to the individual. So while DeBeers cornered the market, we decided that his ad campaigns were right and a diamonds have value. Btw, if anyone needs a cheaper ring, look at clear topaz, or any other clear stone – they can be cut just like a diamond.

    • Lindy

      Thanks for the tips! And yes, we as a society have sealed their value…dare I say forever?

  • In high school I did surveys for a non-profit research company. One of them was a jewelry survey that was being used in a court case… basically the question was, “if something is always sale-price, does that mean it is never actually on sale?” (That’s not what they asked, they asked if anyone had bought jewelry, and if so if they’d bought it on sale.) Apparently a jewelry store was being sued for saying things like, “80% off” when the merchandise was never offered at the suggested retail price.

    • Lindy

      It’s kind of like when I worked in a furniture store, and our “two-for” sale was two chairs at one low price (which basically added the original cost of the two single chairs together, so there was no discount at all). Retail smoke and mirrors, I tell you.

      That’s a good point though, that “sale” may not necessarily mean it’s a good value. It all depends on what you determine the value should be.

  • I think the words “curses, foiled again” came about over a similar situation! Don’t have my upgraded ring anymore…gave it to DD when she and her boyfriend moved into the marriage-talk phase. He had the diamond set in a lovely mount that suited DD to a T. I now wear the little diamond engagement ring that my granddad bought at an auction for my grandmother some years after they’d married…when he could finally afford it. if the family story is correct, it’s now 150 years old, and I love it!

    • Lindy

      That sounds like a lovely way to pass the ring love around. Thanks for sharing, Dmarie.

  • Mrs. 101’s wedding ring sports a bright VS1 (I forget the color) diamond just under one carat, in a custom white gold setting. I think we did OK by buying the diamond by itself, and having it set at a different shop. But chances are it will be handed down within the family, so we won’t get to put the retail theory to the test.
    Interesting article from the Atlantic. Blood diamonds indeed.

    • Lindy

      I know, wasn’t it an interesting article? And I agree, rings that get passed down are the best kinds. :)

  • Thanks God my wife doesn’t care about jewelry. :)

  • Chrystal

    I think your husband scored great points for wanting to do something nice for you, worth more than the $80 spent. I love opals too, thanks for the shiny vintage rings you posted…so pretty. Maybe you could sell the gold and find a way to use the opal as a pendant instead of a ring. The only way you could possibly get your money back is to sell it to a person who wants it to own not resell, ask for $150 and let them haggle you down to $80.

    • Lindy

      Yes, though his upgrade mission didn’t work out, he did earn serious sweetness points.

      Selling to an owner is a great idea, and Craigslist would be a good option for that. I hadn’t been thinking that way, but it certainly makes sense.

  • I was just married in May. After doing a great deal of research we decided to buy both my engagement ring and my diamond wedding ring used. I had them both appraised and I got amazing deals on both.
    When I bought the wedding ring I asked where the store buys their jewelry, they said some stuff is sold by people, but most of bought a auctions. So from now on my husband and I will buy our jewelry at auctions.

    We live in London and often see ads for auctions with GIA certified diamonds. It’s the way to go in my opinion.

    • Lindy

      Auctions sound like a great way to score a deal.

      Individual jewelry brokers can also give you what you need for a lot less than the retail jeweler.

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  • I don’t really have anything to add to the diamond portion of this conversation — no jewelry stories for me — but I can tell you an interesting story about opal.

    Cooper Pedy, in Central Australia, is filled with opal mines … it’s one of the biggest sources of opal in the world.

    My boyfriend and I drove there once for the annual Opal Fair. En route, we stopped at a pub, where we asked the bartender, “where should we go to buy opals?”

    “Oh, I have a small opal mine,” he replied (Sounds impressive until you realize everyone in Cooper Pedy has the rights to a small opal mine). “Come visit me and I’ll show you around.”

    So two days later we went to his home for breakfast. Afterwards, he drove us around the mine fields and taught us how to comb through dirt, in search of opals. Then we went back to his home, where he pulled out a huge bag of uncut opals that had been soaking in some water.

    “This stuff is too small to sell,” he said, “take whatever you want.” We walked away with our pockets literally bulging with opal.

    It was a crazy experience … never thought I’d see opal in bulk!

  • Love your tips and hints! One tip I’d mention is to use the internet for promo codes before you decide to click buy. You’ll find some sites that provide online codes an internet-based bargains, in addition to free delivery codes to get shipping totally free!

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  • Susan

    I am leery of eBay. Case in point: it sounds like even your husband didn’t notice the words “lab opal” on the receipt. Setting aside the fact that a small percentage of eBay sellers are outright scam artists, you also gotta figure that people who never really knew what they were buying also *really* have no idea what they’re selling. Probably best to stick with inexpensive items and things that obviously are what they are (books, music, etc.)

    For major purchases, I either buy with confidence or not at all, so I have never made a large jewelry purchase. Seeing 90% price swings on items costing over $1000 is enough to scare me off. Sheesh – I would feel more comfortable buying a used car than a diamond!

  • Ceridwen

    Another good place to look for jewelry and gemstones (including opals) is a gem show. Every year in mid-August there’s a huge gem show held for 3 days in Western Massachusetts–East Coast Gem and Mineral Show. I’ve bought three pairs of opal earrings (one a very dark neon opal, the other two lighter but still intense blue) for less than $20.00 each. And you can buy Australian opals–black, which run around $80,000 each, and everything in between. Some of the vendors will set the stones you buy into rings, earrings, pendants, etc. right there, while others you’ll have to trust to mail your finished jewelry back to you. For loose gemstones, you can find everything from diamonds, emeralds, rubies, and sapphires to tanzanite, opals, peridot, tourmaline, tourquoise, citrine, amethyst, aquamarine, pearls, topaz, and more. And settings in gold (yellow, white, rose) and silver. I haven’t seen any platinum. And I’ve seen vendors selling lab-created gemstones too, but they’re clearly marked as “lab-created, which means synthetic. I’ve found most of my jewelry there, and after my first time there, I vowed that I’d never buy jewelry in a jewelry store or in a dept. store (such as Filene’s or Macy’s) ever again. There’s something for every budget. I had to have a ring I bought several years ago fixed–one of white sapphires had fallen out because the prong became loose, so I took it to a local jeweler. He fixed the ring, and when I picked it up, he asked me where I got it (the gem show) and how much I had paid for it (under $50.00 for a 14k white gold emerald and white sapphire past-present-future ring) and he was shocked. He had a similar ring in his showcase–the emerald was smaller than mine and the white stones were diamond chips and were much smaller, and his price was $700.00. I’ve also found beautiful sterling silver chains–at one vendor they’re on rolls–you can select the length, and he’ll put the clasp on for you for a $1.00, with the chains varying in price per inch depending upon the style of the chain (more for a Byzantine than for a box chain). And there’s lots of yellow gold (all karats) too if you’re not a white metal girl.

    This gem show is well worth a look-see. A friend of mine likes to get her jewelry from Jewelry Television (via the internet) and/or from one of the shopping channels on tv. I’ve never tried it, but she’s had good luck and gotten very nice jewelry, including her diamond engagement stone, for a very good price. She then had a local jeweler set it for her.

    I don’t know if any of those places would buy your fake opal ring from you, and if they would, whether you’d break even or not. You might look into it. And Good Ole Tom’s (located in Hartford and Springfield) also buys gold, but I don’t know if they’re honest or thieves.

    You can also try antique shops and estate sales, but I think you have to either really know your jewelry and metals, go with someone who does, or be very lucky. Sometimes people don’t know the value of what they’re selling, and more likely than not people are getting rid of “junk” that no one in the family wants. I’m not sure if an antique shop would buy your fake opal ring from you, probably not, but antique shops don’t just sell stuff that is 100 years old or older–I’ve seen stuff that dates from the 1950’s–some of it hideous, but if you’re a collector, well, then there’s a market.

  • I think it depends on the place of purchase. Many of the higher end jewelers will show you what they pay for the diamonds. Almost all that information is public anyway as diamonds are similar to oil in that they are somewhat of an oligopoly. And obviously, you can figure out gold, platinum, etc prices for yourself based on the spot or futures price.

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