Diamond InvestmentIn my last article I wrote about how important a GIA grading report was in pricing a diamond and how it could mean the difference between getting the right price or getting the wrong price for your diamond investment.  I told you a true story of how I deal with diamonds that don’t have reports and can be graded up or down, and I told you how it turned out for the woman involved.

Of course, it doesn’t always turn out in the best interest of the customer.  It’s a fact that there are many diamond buyers out there that are not honest and I understand the fear and trepidation the customer faces when they are talking about their diamond investment, which can turn out to be a lot of money.

At the same time, as the diamond buyer, we also have to protect ourselves from scams.  I’m not saying that all customers are scammers, but it does happen that a customer will try to sell stolen goods and sometimes diamonds that are too good to be true are fake.  So, how do the buyer and the seller both stay protected when they are dealing with the diamond investment?

How to Protect the Diamond Investment

I have been thinking about this a lot lately because I have had several deals that I have passed on recently.  Two of these seemed too good to be true.  These were large diamonds that were flawless.  Do you know how rare it is to see a flawless diamond?  It doesn’t happen often.  Especially one that is colorless.  And, when you are in the diamond trade, buying diamonds, it can make you suspicious of whether or not what you are looking at is real.

What you learn is that there is only one way to tell if a diamond is not a synthetic, and that is through a lab.  But, it’s a sticky situation to ask someone to send their diamond off, especially when you don’t know how they will react.  Also, these are customers that don’t have grading reports to begin with.

So, how do you protect your diamond investment and yourself from being scammed? How does everyone remain protected?

  1. If your diamond does not have a grading report and your buyer is asking you to get one before they want to pay you, ask for an escrow account to be set up at a bank.  The account will hold the funds until the grading report comes back while the stone is being graded and this will protect your diamond investment.
  2. Ask for a down payment and a written and notarized statement of payment upon receipt of a GIA report that states a certain grade for a certain dollar amount.  Be sure you get all the necessary information, including the login information or report information so you can check with the GIA as to the status of your diamond investment.
  3. Send your diamond investment to the GIA yourself with the written promise that upon it’s return and a certain grade, the diamond buyer will recoup your cost that you incurred to get the report, but that you guarantee to sell it to that diamond buyer for a specified amount.  And, yes, it does cost money to get a GIA report.
  4. In order to prove that the diamond is yours, allow the diamond buyer sufficient time to do his due diligence on the diamond before you agree to cash the check.

It’s all about trust and it has to work both ways.  I’ve learned this the hard way and the easy way, but when it comes to a diamond investment this lesson is priceless.



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