These days, more and more people becoming smart buyers especially when it comes to valuables such as gold and diamonds. Most of us care about how much we may be able to get if we ever need to sell it in the future. Unfortunately, unlike gold, diamonds’ resale value is low.

The popular misconception about diamonds is that it is a good investment and will increase in value over time. But this has not been true for the majority of diamonds over the last 10 years. The reality is, most diamonds will decline in value over time. Immediately after you have made your purchase and leave the store, the ring is now worth 50% less than what you paid for barely a few minutes ago. Just like when you drive a newly purchased car off the lot, the value will dramatically drop the very second you walk out of the store.

Why is Diamond Resale Value So Low?

One of the factors that affect diamonds’ resale value is the retail mark-up. Jewelry retailers, like those in most other industries, buy their products at wholesale and sell them at marked-up prices – some a lot more than others.  

Unfortunately, this means that the resale value of the diamond will be much lower than what it was purchased for.  

Anyone who has walked into a jewellery store can confirm the high prices of diamond jewellery. According to Business Insider, jewellers often place 100% to 200% mark-ups on their diamond jewellery. Jewellers set these high mark-ups to cover slow-moving inventory, operating costs and of course profit.

As a result of the retail mark-up and the decline in diamond prices, the resale value is typically well below what you paid. Indeed, diamond jewelry will typically resell for 25% to 50% of the purchase price. And even less if your diamond does not come with a certificate.

Nonetheless, you will be able to get some money back if you decide to sell your diamond ring or other diamond jewelry. However, you’ll almost always lose money when you sell your diamond. Because of the markup that’s applied to diamonds, most jewelers, pawn shops and other buyers will only offer a fraction of what you paid for your diamond if you sell 

As we’ve mentioned above, you won’t get back what you paid for your ring, even if it’s in flawless condition. Be realistic about pricing from the beginning and be prepared to deal with selling at a loss.