January 28th 2022

How to Save Money on Your Diamond Engagement Ring

By Devin Jones

Purchasing a diamond engagement ring is an expensive proposition. In this post we explore the best ways to save money and maintain high quality.

Buy Your Diamond Out of State (Savings: 0% - 10.25% vs. Buying in State)

Buying a diamond in Chicago, IL? If you live in Chicago, you’re going to spend a full 10.25% in sales tax on your engagement ring. On a $5,000 engagement ring that’s the equivalent of a 50” flat screen TV, and on a $20,000 purchase that’s enough to buy a MacBook Pro (with Touch Bar!). More importantly, you don’t have to pay the jeweler this tax if you buy the diamond from out of state. According to Quickbooks.com, states cannot require out-of-state sellers to collect taxes unless they have a physical connection to that state.

Avoid Overly High Diamond Color Grades (Savings: 15% - 30% for I vs. G color)

One of the most commonly searched diamond color grades is the G color, which is the highest of the "near colorless" clarity grades that include H, I, and J as well. However, most jewelers will tell you that the difference between a G and I colored diamond is indistinguishable to the naked eye. In fact, without seeing the two diamonds side by side a trained jeweler may not be able to distinguish them. While they may look the same, the price tags for these two colors is anything but comparable. At the time of this writing, StoneAlgo found that an I colored diamond that was otherwise identical to a G colored version cost between 17% and 30% less. The higher the carat size, the larger this percentage difference can become as seen using the StoneAlgo Search Tool. Please note that all diamond grading discussed in this blog refers exclusively to GIA grading.

Avoid Overly High Diamond Clarity Grades (Savings: 10% - 25% for VS2 vs. VVS2 clarities)

There is a certain line in the clarity scale after which differences in quality may become visible to the naked eye. That line is typically the SI1 clarity grade. Anything above SI1 (VS2 – FL) are considered to be very slightly included or better, meaning any imperfections inside the diamond should only be visible under 10x magnification. SI1 refers to a diamond that is slightly included and indicates that any inclusions are more easily visible under magnification. Sometimes these imperfections are large enough or located in such a way that they are visible to the naked eye or affect the light performance of the diamond by interfering with the path of light bouncing around within the diamond. However, anything from VS2 to Flawless is likely going to look identical to the naked eye since the imperfections are so small.

Anything beyond VS1 clarity is typically viewed as being “investment grade”, meaning there is no reason to purchase it from a practical, visual standpoint. StoneAlgo recommends VS2 clarity diamonds as the best bet for both performance and price, but you may find great deals in other clarity grades of even higher quality as well. While you don’t want to purchase too low of a clarity grade, going down two grades from VVS2 to VS2 can save you up to 25% on the diamond’s overall price.

Get a Semi-custom Engagement Ring Setting (Savings: 25% - 50% on the Setting)

There are some beautiful name brand engagement ring settings on the market these days. From Tacori to A. Jaffe, the high quality designs can be difficult to choose from. But why choose a prepackaged setting with the brand name on the inside when you can get a semi-custom ring for even less? Unlike custom rings which require months to produce, a semi-custom ring can be designed and manufactured quickly if you work with the right local jeweler. These rings can combine the elements or inspiration you find from designs at Tiffany & Co. or other high end brands and can even cost less than most common name brands.

Buy a 14k White Gold Instead of Platinum Setting (Savings: ~$400)

If you are considering a platinum setting make sure you think about white gold as well. While the two metals appear very similar, platinum settings are far more expensive. Platinum is a denser metal so a platinum ring will be heavier than a white gold ring. Since platinum and gold cost about the same per ounce, this means that a heavier platinum ring will naturally cost more than a gold ring. Furthermore, white gold is made from a mix of metals (meaning it’s an alloy) that contains yellow gold, silver, nickel and other less expensive metals, further reducing the price as compared to platinum.

The main difference between a platinum and white gold setting as it pertains to jewelry is the type of maintenance each requires. White gold is coated in a metal called rhodium which gives the jewelry its silvery, white appearance. This coating can wear off overtime and you should consider getting your white gold jewelry “re-dipped” at the jeweler every few years given normal wear and tear. Platinum will also require maintenance over the years, mainly in the form of polishing. All told the maintenance of either option will be about the same in terms of cost and many jewelers will provide this service for little or no cost.

Pay for the Diamond by Cash or Wire Transfer (Savings: ~2%)

Without changing a thing about what you are buying, you can shave a couple points by simply paying cash for your diamond purchase. Credit card companies charge retailers a percentage of every transaction that passes through their systems and online jewelers are more than happy to share the savings with you if you pay cash or wire transfer. To put things in perspective, 2% of $5,000 is a full $100. Not to mention, by paying cash you avoid interest payments you may incur by having the charge sit unpaid for months on end. StoneAlgo always recommends you buy based on what you can afford, and if you can afford to go all cash this can be an easy way to wrap up your savings.

Avoid the Little Blue Box (Savings: 140% - 250% vs. Upscale Jewelers)

Those savings figures are not a typo. High end retailers such as Tiffany & Co. and Harry Winston are renowned the world over for their beautiful jewelry and magnificent showrooms. But when it comes to the actual diamonds they sell, the stones are the same GIA certified diamonds you can find online or at your local jeweler. You wouldn't know it though, based on their sky high prices. In an independent study, Tiffany & Co. and other premium jewelers charged between two and four times the average online price for GIA certified diamonds, statistics confirmed by StoneAlgo using our proprietary Stone Score Algorithm. On the day this article was written, StoneAlgo showed a 3.77 carat E VS1 diamond available for $102,441 while the video in the independent study shows a 2.19 carat, E VS1 diamond from Harry Winston would cost $109,000. Regardless of how “spectacular” that Harry Winston stone may be, it should not be priced anywhere close to a 3.77 carat diamond of the same quality. Whether you’re saving money or maximizing your carat weight, avoiding the high end retailers is the easiest way to save the most money.

Buy Your Diamond Online (Savings: 20% - 50% vs. Typical Brick and Mortar Jewelers)

It goes without saying, but brick and mortar jewelers have more overhead to pay for than online retailers. There’s a reason Amazon continues to eat up nearly every industry in its path – retailers that rely on physical storefronts to sell their goods just can’t compete on price with the online only retailer. The diamond industry is no different. So, how much can you save by buying online? Online jewelers not only offer better pricing in general than you’ll find at the local jeweler, they also offer many of the exact same diamonds. When you walk into a jeweler they will have a limited selection of diamonds available to show you (inventory is expensive to hold and insure) but will often be able to get you specific diamonds with a few days’ notice. How? By searching a global database for diamonds that will include most of the exact same inventory you can find online.

Now, this isn’t to say that local jewelers aren't incredibly valuable assets in your engagement ring buying experience. The right jeweler can educate and inform you throughout your search, and even help you design a custom or semi-custom engagement ring for a good price. Just make sure that, if you are going to buy a diamond at the jeweler, you know if that diamond is available online for less. You can always buy a diamond online and have the engagement ring setting custom designed at your favorite local jeweler instead of paying significantly more to have the jeweler source your diamond as well.