Consumers warned of overpricing as synthetic diamonds price plummets

Consumers may be paying more for synthetic or lab-made diamonds that are less valuable than they seem, according to the latest research from Rapaport.

The cost of synthetic diamonds is crashing, dropping as much as 98 per cent lower than standard pricing. However, some retailers still charge the same high prices for synthetic diamonds as for natural diamonds.

As synthetic diamond prices continue to fluctuate, some retailers are pricing them at a premium while others sell them at a much lower price.

For example, Walmart is selling a 3 ct Round F-G (colour) VS1-VS2 (clarity) synthetic diamond solitaire ring for $4535.55 (US$2975), while Signet’s Blue Nile sells a similar 3 ct Round G VS1 synthetic diamond solitaire ring for $12486 (US$8190), representing a 275 per cent difference in price for the same product.

“Some jewellers are pushing synthetic diamonds because they can make huge profit margins,” said Martin Rapaport, chairman of Rapaport Group.

“This won’t last because synthetic diamond prices are crashing to hundreds and even tens of dollars per carat. It is because they are available in unlimited supply.”

Whether or not a consumer opts to buy a cheap or expensive diamond boils down to their preference; however, if they are spending thousands of dollars on synthetic diamonds, the study suggests that consumers should be more cautious about where they purchase them. 

Rapaport added that consumers must be careful when buying synthetic diamonds as jewellers promote the sale of synthetic diamonds because it allows them to make “windfall profits”.

The best way to determine if the diamond is natural or synthetic is to ask the jeweller for a grading report. The Gemological Institute of America (GIA) will indicate if the diamond is lab-made on the grading report.

“Synthetic diamonds are not real diamonds,” he concluded. “They do not retain value.”

The Rapaport Group is an international network of companies providing added-value services that support the development of ethical, transparent, competitive, and efficient diamond and jewellery markets. Established in 1976, the group has more than 20,000 clients in over 121 countries.

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