Here’s the deal and my thought process of shopping for a diamond online. By paying with Paypal, you could still raise a dispute for the transaction if anything should go seriously wrong. (View scenario #4 on the previous page).
Likewise, using a credit card can also allow you to raise a charge back dispute should there be a need for it. For people who need this additional security blanket, these are all viable options to pursue.
All in all, if I didn’t like the ring or if the diamond did not measure up to the GIA report after an appraisal, all I would stand to lose is about $135 ($100 in return shipping + $35 in appraisal fees) and some wasted efforts. However, I would have learned an important lesson in the process.
On the other hand, if the ring measures up, I would have saved myself at least 50% of the cost for a similar purchase at a local store. To illustrate an example with some numbers, a 1 carat heart shaped diamond engagement ring that is sold in a local store for $10,000 would only cost $5,000 online.
Due to the economics of supply and demand, the markup on a round diamond can differ from that of a fancy shaped stone. For round brilliant cuts with similar grading specifications, I found that the physical stores generally list their inventory at a 30%-80% higher pricing than online stores.
And when we compare online prices to international brands like Tiffany’s, you would expect to pay an additional premium of 100% on prices. That’s two online diamond rings for the price of one Tiffany ring!
When faced with a limited budget, you can get more bang for your buck by going online. More importantly, there’s a huge range of choices for heart shaped diamonds for you to choose from. Of course, this wide selection also applies to other diamond shapes and you are no longer limited by the inventory a local store has.
For context, James Allen is an online vendor that has more than 200,000 GIA/AGS certified diamond of all shapes and sizes for you to choose from. This is in stark contrast to the few measly options you get in a jewelry store.
All in all, the risks of buying an engagement ring online are almost the same as (if not, even lower than) buying a ring in a traditional brick and mortar store. I personally find that it is safer to shop online as you will avoid making impulsive decisions. More importantly, you would also have the ability to analyze diamond specifications in far greater detail.
On top of having access to a larger selection of stones, the money back guarantee is a huge plus for international shoppers as such policies are almost non-existent outside the Western market.
Next up, I will show you insights on how the online retailers work and why you might see the same diamond being listed in the inventory of different vendors.