As a diamond buyer and seller for over 33 years it is more common that diamond buyers and sellers in the industry honor GIA (Gemological Institute of America) certified diamonds over all the other legitimate companies offering grading services, like EGL (European Grading Labs), IGI (International Grading Institute), AGS (American Gem Society), etc. While these companies are legitimate and knowledgeable, GIA seems to always be the preferred certificate for dealer to dealer transactions.
EGL made some industry observations to attract dealers and retail sellers of diamonds to EGL in the market and delivered very effective solutions. They realized that the more conservative GIA Carlsbad California and New York City grade diamonds are on a much more strict criteria and are more expensive (a 1-carat diamond can cost around $100 per carat to certify; larger stones 2- to 5-carats and up can be very expensive to grade). Secondly, they do not offer the fastest service making one wait six to eight weeks at times to get the results back; only offering a “pay double” to get it back in a few days. Furthermore, both GIA and AGS don’t offer “pre-cert” options – this basically allows the company sending in the diamond for certification to only pay for the grading service and not for the certificate and only decide after receiving the results if it wants to pay for the certificate to be printed.
EGL offered a solution to these problems. They are cheaper, they offer faster service, they are quick, they offer pre-certs, and they invented a new in-between clarity grade of “SI3.” This explains why EGL became as popular as it did for retail diamond merchants, but the fact remains that as a consumer you should be aware when buying an EGL graded diamond, taking a few things into account. Usually one can estimate the average “upgrade” received from EGL for an identical diamond versus GIA. In our experience at least one color and clarity better upgrade either color, clarity or both. For example, if GIA would grade a diamond an “I” color and “SI2” clarity, EGL would grade an “H” color and “SI1” clarity. This could have a significant impact in the wholesale and retail price one would pay for a diamond priced per carat on color and clarity.
The diamond market is aware of this, of course; and therefore EGL/IGI graded diamonds sell at a discount when compared to diamonds of equivalent grades certified by GIA. EGL/IGI certificates are a helpful selling tool for retail sellers but not necessarily for dealer to dealer transactions.
IGI graded diamonds not only are liberally graded, but also have high estimated appraised values added to the certificates which mean nothing in the industry, and can confuse the retail consumer with these certificates into thinking what they just purchased is far more valuable than what they really have. GIA does not attribute an appraised value on their certificates.
What we’ve explained so far is from the point of view of a wholesale dealer, diamond buyer and seller. But what should you do, as the diamond consumer? Almost without exception, if you buy an EGL or IGI certified diamond, you should purchase it at a discount based on the color and clarity grade being at least one grade lower, and do not go by a stated appraised value on the certificate (in the case of IGI). This also applies to a private individual retail jeweler’s estimate or appraisal.
In our final analysis, although GIA makes one wait longer and charges more, we feel that it is worth it because then we can offer the customer the most accurate industry graded appraisal to ensure them that they will be getting the most for their investment. It also ensures that our dealer to dealer sales will be smoother with less haggling because of the GIA certification.
When a customer comes into our store to sell a diamond graded by companies like EGL or IGI or even an independent appraiser or jeweler, we always explain and educate our customer that although those companies are legitimate and knowledgeable, they grade on a slightly more liberated criteria than GIA and are discounted in the industry between dealer to dealer transactions. We then must assess and grade the diamond based on our GIA experience, knowledge and tools, and provide an estimate and valuation based on these criteria.