When it comes to found money, it's hard to beat what's in the jewelry box. Gold and silver pieces are bringing nearly twice as much as they did in 2008, but diamonds are finally living up to their rep for being a girl's best friend.
"The wholesale price of diamonds has gone up 30 percent in the past year," said Dan Wixon, owner of Wixon Jewelers in Bloomington. That's good news for anyone looking to sell diamonds, which had several years of nearly flat prices.
It used to be you'd have to go to a pawnshop to sell a diamond, but that changed during the recession. Jewelry stores found that buying gold and silver castoffs was lucrative, but turned away diamonds because they're not as easy to resell. As prices rose, however, so did acceptance. Wedding Day Diamonds now buys any diamond of a half carat or more. The Gold Guys, who used to focus on buying precious metals, have now added gemologists at each store. Gene Gittelson, owner of Gittelson Jewelers in Minneapolis, recently started buying diamonds from customers for the first time in 26 years. "I had to hop on the diamond-buying bandwagon because all my competitors were," he said. Be Iced Jewelers in Edina, which buys and sells pre-owned jewelry, saw a 20 percent increase in diamond buying from its customers last year, said store manager Marjory Torgerson.
Sellers are mining their diamond stash for one reason -- cash, said Patrick Nelson, a buyer at JB Hudson. "Some are selling to continue a lifestyle, pay bills or clean out a drawer," Nelson said, adding that most are selling after a death or divorce.
Jewelers buying diamonds find that it's not as easy as buying gold or silver. Most of those broken gold necklaces and homely silver trays are sold to scrap dealers and melted down.
Diamonds, however, are forever. If jewelry store or pawnshop owners are already well-stocked in 3/4 carat-weight princess-cut diamonds when a customer brings one in, they'll have to find a wholesale buyer for it or tell the customer no thanks. Sellers anxious to unload a diamond may have to be patient while a wholesaler or retailer tries to find a buyer. Still, many jewelers or pawnshops will be able to provide a check on the spot.
Retailers such as Be Iced, Continental Diamond and JB Hudson buy nearly any diamond that a customer brings in. Most of those diamonds are then resold to wholesalers and possibly recut. Wixon, on the other hand, is more selective because it keeps all of its diamonds in-house. "I buy less than 50 percent of the diamonds brought in," Wixon said.
Still, consumers looking to sell shouldn't take the first offer they get. "Shop it around to three places," said Jimmy Pessis, owner of Continental Diamond. "Prices from buyers can easily vary from $1,000 to $2,000 on the same diamond."
How much can I get for it?
Even if the price varies from store to store, most diamond sellers will probably be disappointed in the amount offered, especially if they're hoping to get the appraised value. "Generally, they're going to get 20 to 30 percent of the appraised value, depending on the demand for their type of stone," said Nelson.
Some sellers estimate prices by what they see on BlueNile.com, a popular jewelry website, but most sellers of non-certified diamonds will be lucky to get half of the Blue Nile price, although larger diamonds of high quality hold their value, said John Sorich at Diamonds Direct in Minneapolis.
Unfortunately, people have been told for too long that a diamond is an investment.
"It's not," said Torgerson of Be Iced. "It's a commodity like a car. You use it, and if you tire of it you sell it. It's fine for couples to see diamonds as a symbol of an emotional investment, but don't think of them as a financial one."