Costco Wholesale Corporation (Costco) is one of the largest wholesale retailer in the world with a reputation for generous return policies and unparalleled pricing for goods.
From fresh seafood, travel packages, baby wipes and even to a brand new car, this warehouse retail giant offers an amazing range of products to their members under one-roof.
Interestingly, Costco also has a growing business segment in jewelry and luxury products. And when we are talking about diamond rings worth thousands of dollars, any “potential savings” or “discounts” may easily run into the 4 figures range.
However, does Costco really provide you with the best engagement ring value? Are their diamonds as good as those offered by the traditional brick and mortar jewelry stores? Our indepth review of Costco’s engagement rings will reveal some shocking findings you probably didn’t know…
In my opinion, there’s only a one benefit of buying a diamond ring at Costco – their return policy. Believe it or not, Costco has one of the most liberal and generous return policy in the industry. The ease and convenience of being able to return a product to any of their 600 warehouse locations worldwide is unparalleled when you compare them to other mainstream jewelry stores.
That said, I always believe in the philosophy of doing things once and getting it right the first time round. This is especially true when it comes to buying diamonds. You should bear in mind that diamonds aren’t like groceries and very often, there emotional values attached to a piece of jewelry.
Anyways, a good return policy is just a safeguard and it doesn’t guarantee the jewelry quality being sold. Think about this, isn’t the whole point of a purchase to be satisfied and never having to undergo the hassle of a return/refund?
Brace yourself for a long read because there are many serious issues I want to highlight about diamond jewelry shopping at Costco. Now, I want to go on the record saying that Costco is a great outfit and a highly respectable business. However, they are NOT jewelers and what they can offer pales in comparison to other jewelry stores.
#1 – Costco Doesn’t Offer Any Form of Customization
One of my biggest gripe about Costco.com is that they do not sell loose diamonds or semi-mount settings. In fact, Costco doesn’t offer any form of customization for their diamond jewelry. This means you can’t buy a piece of jewelry in a different type of metal (e.g. white gold, palladium) or cherry pick a diamond for your ring. Instead, you are expected to buy the jewelry as-is and this can make finding the right ring extremely difficult.
#2 – No Ring Resizing Or After-Sales Services
Personally speaking, the lack of service is a huge deal breaker. Costco doesn’t offer ring resizing services nor any after-sales services like cleaning or re-polishing. Since all of Costco’s rings come pre-set, it is very likely for you to face problems with the correct sizing of the jewelry.
If this happens, you are expected to go through the hassle of sourcing for another jeweler after buying a Costco diamond ring, fork out extra cash to perform the re-sizing modifications and in the process, voiding any warranties.
#3 – Lack of Knowledgeable Staff
Based on my experience, the sales personnel over the jewelry counter won’t be able to give you any indepth information about a purchase. The best they can do is to “parrot” the details from a grading report. Instead of blindly relying on what the salespeople says, I recommend doing your own research prior to hitting the stores.
#4 – Extremely Limited Selections Available
To say the least, the available selections for diamond jewelry is pathetic. If you are looking for a specific diamond size/color/clarity, you better pray that all the planets and stars align when you visit the store. In fact, you can count yourself super lucky if you manage to find a piece of jewelry that’s close to your desired specifications.
Ok, what about shopping online at Costco.com? Would there be more choices available? Unfortunately, you will face the same problem of having limited options to choose from. Here’s a screenshot that shows you a total of only 263 rings available in their inventory.
In contrast, online jewelers like James Allen can offer more than 10,000 diamonds with full HD videos. On top of that, you can make better purchasing decisions with the indepth information provided instead of shopping blindly at Costco.
#5 – Costco Engagement Rings Aren’t Sold at the Best Prices Or Quality
Here’s the final nail in the coffin. You probably think that Costco offers the lowest prices for buying jewelry. However, the truth is that you can get better quality diamonds and enjoy lower prices at jewelers who also offer better policies. I will go in-depth and show you some side-by-side comparisons in a moment.
Costco claims to sell diamonds with clarity ratings better than VS2 and I color. To be honest, I’m actually surprised to see Costco implementing some form of quality control in their diamond inventory. While such practices are common in high-end boutique stores like Tiffany & Cartier, I never expected a wholesale operation like Costco to be doing something similar.
In fact, I expected Costco to be selling diamonds in the lower tiers of color (J-K) and clarity quality (SI1-I1). That said, the devil is always in the details. While Costco may seemingly be selling “high” quality stuff, the caveat here is that Costco’s standards are based on their “Industry Grading Guide” and may NOT be based on GIA’s grading standards.
Buyer beware! As an industry expert, I always warn shoppers about the dangers of getting ripped off when buying diamonds with “suspicious grading documents”. In a recent case study, other experts in the industry also feel the same way and cite the importance of having a reliable grading report when buying diamonds.
Now, not all Costco diamonds have accompanying GIA reports and this is a huge pitfall you want to avoid because there’s no way for you to know the real quality of the diamond. I did a check and found that most of the diamonds under 1.00 carats do not grading reports from GIA.
This begs the questions: why does Costco selectively offer diamonds with GIA grading reports? Why are some diamonds in their inventory not graded and only have an appraisal document? Why is there no consistency in the use of grading laboratories?
In the industry, GIA is recognized as the most reliable grading lab in the world because of their consistency and accuracy. Jewelers know this and the choice of grading documentation for a diamond is never random. In fact, it is a result of shrewd manipulation to market low quality diamonds in better light and to maximize their profits.
An appraisal report is NOT THE SAME as a grading report. In order to accurately grade a diamond, the diamond needs to be loose and NOT mounted on a setting. In these appraisal documents, the entire piece of jewelry is sent to the lab pre-mounted for an appraisal.
There’s NO WAY an accurate grading of the diamond’s qualities can be performed on mounted diamonds. On top of that, IGI’s grading standards aren’t on par with reputable labs like GIA or AGS. If you completely trust what the IGI appraisal document says, I’m sorry to say this – but you are a fool and will believe apples are gold in color if I told you so.
The problem with these appraisal documents is that the “worth” of a jewelry piece is grossly inflated only to make you feel good and as a marketing tool to lure unsuspecting customers into making a purchase. The truth is, the valuations listed in these appraisal documents are totally unrealistic.
Apart from insurance purposes, the “Summation of Appraisal” document is just a worthless piece of paper. If you ever tried selling your jewelry with the appraisal document claiming it’s worth $XX,XXX, I can assure that you nobody will buy your jewelry at 1/2 or even 1/4 of the ridiculously inflated “valuation” price.
In fact, you shouldn’t even be using these inflated values for your insurance policy because you’ll end up paying a significantly higher premium. In the event of a loss, you will NOT be compensated for the amount stated in the appraisal report and you will be shocked to find out that your jewelry isn’t worth as much as you think it is.
The bottomline is, don’t be fooled by the nice looking figures listed in any appraisal documents. You should only buy diamonds that had been reliably graded by GIA (Gemological Institute of America) or AGS (American Gem Society) because this ensures the quality of diamond will be as described.
While Costco may seemingly be selling “high” quality diamonds with good color and decent clarity grades, I can’t say the same in terms of cut quality. When buying diamonds, CUT IS KING. Cut has the biggest impact on a diamond’s beauty and sadly, the cut standard at Costco is mediocre.
You see, Costco allows GIA “Very Good” cut diamonds in their inventory and this means you might end up buying diamonds that aren’t cut well. Here’s an example of such a stone you should avoid. The corresponding GIA certificate for the Costco diamond can be downloaded here.
In the grading report, I want to bring your attention to following section seen below.
Did you notice the statement: Cut grade affected by brillianteering? This indicates a problem that occurs during the final polishing steps when the star, lower, upper half facets to the diamond. As a result of improper facets proportions and placements, the final face-up appearance of the diamond had been negatively impacted.
If this diamond managed to pass the standards of Costco’s in-house gemologist checks, this speaks a lot about their inspection process which they claim to be the “strictest quality standards in the industry in cut“.
To be fair, you may be able to find GIA excellent cut diamonds at Costco if you put in enough effort to dig through their entire inventory. That said, you need to understand that GIA’s excellent cut rating spans across a wide range of variations in cut quality and you need to be extremely knowledgeable in order to pick out a truly well-cut diamond.
The lack of images for their online listings and lack of product knowledge of their sales people means you have to depend on yourself when choosing diamonds. I don’t recommend shopping there but if you must, make sure you bring along an ASET scope or an Idealscope to help you review diamonds at Costco for their cut quality.
Given Costco’s reputation of being a wholesale operation, you would probably expect them to offer lower prices for their diamond rings than anywhere else. Unfortunately, that’s not true. In fact, once you start making comparisons, you will find that their prices are typically 20-30% more than other online vendors.
I found a 1.15 carat D color VVS1 GIA certified solitaire diamond ring at Costco and it costs an astounding $21,999! The GIA grading report can be downloaded here.
In stark contrast, a slightly larger 1.20 carat loose round diamond with similar specifications only costs $15,970 at EnchantedDiamonds.com.
Even after adding in a solitaire platinum setting, the total cost of the ring only amounts to: $15,970 + $790 = $16,760
That’s about $5,000 cheaper than the Costco diamond ring! Besides significantly lower prices, Enchanted Diamonds also offers better sales policies like ring upgrades and after-sales services. If you are looking for better value and ways to spend your money, it’s obvious who the better choice is.
The next example I found at Costco.com is a pave set engagement ring with a 1 carat center stone that’s cut to mediocre standards.
In this listing, the round diamond is graded as an E color, VS1 clarity and “Very Good” cut by GIA. For your convenience, the grading certificate from GIA can be downloaded at this link. Frankly speaking, I’m not a fan of this diamond nor Costco’s criteria of selecting diamonds.
Instead of focusing on better cut (the main factor that determines a diamond’s beauty), Costco chose to focus their selection criteria based on “better” color and clarity ratings. When buying GIA graded round brilliant cuts, “Very Good” just ain’t good enough. I personally recommend nothing less than “Excellent”.
To show you another example that Costco engagement rings were actually more expensive than other vendors we recommend, I did another comparison against a different vendor. With a quick search at James Allen, I managed to find a well-cut diamond with similar color and clarity at significantly lower prices.
At James Allen, I selected a ring setting with 0.32 ctw of side diamonds to match the one found at Costco. The James Allen ring is also made in 950 platinum and the total cost of the entire ring is: $8,970 + $1,125 = $10,095.
In this particular example, the James Allen ring is roughly 40% less than the Costco ring. Bear in mind that, you are also getting a diamond with better quality (Excellent cut) at James Allen.
In my opinion, Costco’s market positioning in the diamond industry is a little awkward and they please no one. If you are a value seeking shopper, Costco is not the ideal place for seeking out deals because they can’t beat the traditional online jewelers in terms of pricing, quality and selections. If you’re a shopper who’s looking for the prestige of a brand, Costco is probably not a brand on the same levels as Cartier or Tiffany.
When it comes to shopping at Costco, I believe that shoppers should stick to buying regular groceries like sausages and baby diapers instead of purchasing big ticket items like diamond jewelry. Given their limited product selections and service standards, it really doesn’t makes sense to purchase diamond jewelry from Costco.