On the surface, Dubai (the city of gold) may seem like the ideal place to shop for a diamond engagement ring.
After all, the UAE is known for its tax free shopping, a super competitive jewelry industry and they are ranked as the 3rd largest diamond trading center in the world.
It’s no surprise that many people (both locals and tourists) have a perception that there are bargains and great deals to be had in the city.
The truth is far from that.
According to UAE’s law, all jewelry merchants must provide certificates for every purchase of a diamond product. While the establishment of this law was done with good intentions of consumer protection, herein also lies the problem.
You see, there’s no consensus on the type of grading report or standards to be used for assessing the quality of a diamond. This opens up avenues for abuse and misrepresentation of goods.
To be very clear on this; when jewelers sell diamonds without a reliable GIA/AGS report, they are inflating the diamond’s qualities and ripping off clients who unknowingly overpay for inferior quality.
The other practice that is somewhat unique to diamonds in Dubai is that they are usually sold loose in a sealed packet. This means you don’t get to see the diamond upclose or examine it for light performance until you pay a deposit or make payment in full.
There’s a reason for this and that’s because nobody in the industry trusts anyone else (this should already raise a red flag). Isn’t it ironic that dealers don’t trust each other and they expect you to trust them when making a purchase?
When diamonds change hands between wholesalers and retailers, they are usually transacted using untampered sealed packets. Down at the consumer level, the loose diamond remains sealed and this is why you often see them sold in stores in this manner.
And let me say this.
Even as a professional, I would stay away from buying sealed loose diamonds. This is because there are critical analytical assessments which require data extracted from an unsealed diamond.
Right off the bat, I want to be explicitly clear that the most popular places that shoppers flock to is by no means the best places to buy an engagement ring. In fact, these are some of the worst places to buy a diamond ring in Dubai.
A visit to the Gold Souk is almost always on the itinerary of every tourist heading to Dubai. Located right at the heart of Deira’s old commercial district, there are a wide range of merchants selling trinkets, bracelets, bullions, diamonds and other types of gold jewelry.
While this location is best known for their gold jewelry, there are stores that sell loose diamonds and engagement rings. Be very careful though as prices that are advertised are often outrageously high.
In contrast to the traditional souk, the Gold and Diamond Park is a contemporary shopping mall with air conditioning and bright lights.
Located along Sheikh Zayed road and next to the First Gulf Bank metro stop, the mall houses roughly 90 jewelry retailers and more than 110 manufacturing centers.
Touted as the best place to buy diamonds and engagement rings, the Gold and Diamond Park has bus-loads of tourists being shuttled to them daily and is often packed with people.
Obviously, in establishments like these, there is no room for haggling as prices are fixed. This isn’t necessarily a bad thing as prices in the Souk and GDP are often quoted HIGHER than what you see in the branded stores.
But, here’s the thing. If you had to shop at branded stores, is there any specific reason to do so at Dubai?
These businesses have a presence all over the world and you could easily buy something from your local Tiffany or Cartier. With the same prices, does it even make sense for you to shop at Dubai?
Before you get all excited about shopping for jewelry in the UAE, I’m going to burst your bubble and go on record to say that these locations are ALL tourist traps.
I mean, seriously, do you really think you get deals at locations swarming all over with gullible tourists and foreigners? Think about it. Does your soda cost more at Costco or 10 times more in a Disney theme park?
Salesmen trying to bring customers into their the stores on the street.
From personal experience, I can tell you the shops in the Gold Souk and GDP misrepresent the qualities of their products and have sky-high prices. You get the usual hassling, scams and shenanigans found in diamond districts.
Even for non-diamond jewelry, the layperson is expected to bargain and haggle with extremely high starting prices. Without a level playing field or proper knowledge, do you think the typical tourist will stand a chance without getting ripped off?
And this leads us to the next part of the article.
The short answer is NO.
Well, just because the UAE is the 3rd largest trading center in the world doesn’t mean jack. It simply means that the flow of diamonds passes through more hands in Dubai.
And every time a diamond changes hands, you can expect an uptick in prices as the traders take their cut. The fact is, Dubai doesn’t produce diamonds or have any mining activities.
Every single diamond and the vast majority of jewelry that ends up in Dubai are actually made elsewhere and imported into the city. This increases costs. On top of that, the overheads and retail markup are significantly reflected in the overpriced goods.
In fact, I did a like-for-like comparison of prices for similar goods between vendors in the Gold & Diamond Park against Blue Nile and James Allen. What I found was that the Dubai retailers were more expensive by at least 20-30%!
You can perform your own price comparison easily. This guide here has more details…
Now, there’s another aspect you need to think of when buying jewelry in Dubai. At the time of writing, there is a 5% sales tax levied on luxury products like gold and diamonds.
This means you may have to factor in additional costs.
Granted, this 5% tax may be more favorable compared to other countries like the UK or EU where the VAT may cost an additional 25% more. If you are a tourist, Dubai’s sales tax may not be applicable but you are still liable to declare VAT or import duty when you return home.
So, you are back to square one again.
Note: I’ve read that there are UK/EU citizens who game the system and knowingly commit tax evasion crimes. They do this by not declaring what they bought overseas when passing through customs. This is illegal in many countries and if you are thinking about doing the same, don’t. It’s not worth getting into trouble just to “save” some money.
Let me be explicitly clear about this.
If you are making a special trip to Dubai just to buy a diamond ring with the misguided mindset of saving money, you are dead wrong. There are NO savings to begin with that will help offset travelling expenses or justification of your time to do so.
If you are traveling as a tourist or happen to be heading to Dubai for other purposes, buying a diamond in Dubai exposes you to risks. Unlike retailers from the US, there’s no such thing as money back guarantees or any protection if you run into issues.
To the unwary and first time shopper, it’s a minefield of scams in the souks and malls. Tourists are often targeted and taken advantage of because it is hard for them to find any recourse once they are back in their own country.
Dubai is a great travel destination to visit and showcases some of the best architecture in the world. There’s plenty of sightseeing spots and a rich cultural heritage to explore.
But when it comes to buying a diamond or an engagement ring, don’t be fooled into thinking that it is the best place to get deals. Beyond the glitzy appearance of the malls and souks, it’s a big shark tank where many sleazy businesses prey on uneducated consumers.
If you do visit the touristy marketplaces, soak in the atmosphere and enjoy the sights but avoid shopping for anything. If you must buy jewelry, shun the diamonds and stick with only gold jewelry as they are less manipulated in prices.