03/19/2012 12:13 pm ET Updated Dec 06, 2017

Diamonds: Do You Get What you Pay For?

Shopping for a diamond can be overwhelming as you're faced with a paralyzing number of choices. You need to figure out the style of the setting, the metal type (usually white gold, yellow gold, or platinum), the desired shape, the diamond's color, the diamond's clarity, the cut quality, the size of the diamond, the type of certificate -- all of this in what's usually a pressure-filled time crunch before a proposal! To make matters worse, even the slightest variations in any one of these parameters can have a drastic affect on the price of the diamond.

As a seasoned diamond industry veteran, I know exactly where I can sacrifice quality without affecting the look of the diamond whatsoever. Amazingly, this can often mean spending only a fraction of what one might otherwise needlessly spend on a higher quality diamond. As would be expected, most people assume that diamonds are like any other product out there -- you get what you pay for. But with diamonds, that's simply not the case.

Why Do We Buy Diamonds?

One must keep in mind that, contrary to popular belief, diamonds are a terrible investment. Most bricks and mortar jewelry stores make at least 30 percent profit on the diamonds they sell. If you would try to resell a newly purchased diamond, you're looking at a 40 percent loss at best -- significantly more in most cases.

Diamonds are a retail product. Period. And like any other retail product, diamonds have features and benefits. A diamond's benefits are three:
  1. It is Beautiful
  2. It Makes a Woman Feel Loved
  3. It Symbolizes Commitment, Promise, and New Beginnings

How to Maximize the Benefits

Most women I know (including my wife and four daughters) would feel loved no matter what kind of diamond their man gives them (or even none at all!). For most kind-hearted souls out there, it really is the thought that counts.

But having a large and brilliant stone doesn't hurt, and most men are eager to see the joy in their new fiancee's eyes as they propose with a spectacular diamond choice.

And, of course, in order to maximize a diamond's beauty, we need to focus on the stone's features that are most easily seen and are most impressive while minimizing the features that are not readily visible.

Taking it to the Streets

Watch this short video I filmed a few weeks ago while on a trip to New York City to participate on the Anderson Cooper daytime talkshow.

In it, I take to the streets of Manhattan in Times Square to find complete strangers to participate in what I call the "Diamond Quality Challenge." I showed these people two engagement rings -- both set in identical basic solitaire settings. Both diamonds are ideal cut rounds and both weigh about one carat.

One diamond is an H color, SI2 clarity (relatively low quality) while the other is a G color, VVS2 (relatively high quality) clarity. The H SI2 cost me $5,770 while the G VVS2 cost me $13,500.

Amazingly, nobody was able to tell the difference between the two rings. In fact, for some crazy reason, most people seemed to prefer the cheaper stone. Everybody agreed, however, that they would never buy the more expensive stone over the cheaper one.

Taking a look back at the list above, it's clear that the cheaper stone is 1) just a beautiful as the more expensive stone, 2) will impress the recipient just as much as the more expensive stone, and, therefore, 3) is the best possible buy. After all, why throw away money needlessly? You do have a wedding coming up soon -- and a lifetime of joy (and expenses!) in store.

Ira Weissman+ is a diamond industry veteran with nearly a decade of experience at one of the world's largest diamond polishers. He has traveled the world buying and selling diamonds and now dedicates his time to helping consumers make the most of their diamond buying decisions. He has been featured on Anderson Cooper, and has been quoted by MarketWatch, The Village Voice, and BankRate. Visit Truth About Diamonds to educate yourself about diamonds and for free help in your diamond search according to your budget and needs.