Diamond engagement rings should not be left to chanceYou’re about to spend a lot of money. And unlike most big-ticket purchases in life—cars, TVs, stereos—you are (hopefully) only going to make this purchase once. You want this symbol to endure for decades, perhaps generations. Compounding matters even further, if it’s an engagement ring, then your entire proposal could hinge on the purchase—get it wrong and you risk disappointment in a moment that should be triumphant.

And the final issue: information asymmetry. The merchants who sell diamonds know more than you do. They can educate you or they can "play" you.  

Before you go shopping you need to know these 5 things before buying an engagement ring:

1. Diamonds aren’t as simple as Carat and Price.

Yes, size matters. But that’s only part of the equation. Properly evaluating a diamond is complicated, nuanced, and involves many variables. For instance, a diamond’s “Cut,” in many ways, matters more than its size. Start with Diamonds for Dummies, The Four C's, and our Frequently Asked Questions.

2. Customer testimonials aren’t enough.

Customer testimonials can help you pick a merchant, but not a diamond. With some other kinds of purchases, it’s easy to use customer testimonials as a barometer of quality. On Amazon.com, for instance, if 500 users give a product an average rating of 4.7 stars, chances are it’s a good bet.

Diamonds are a different story. First: every diamond is unique--there are no aggregate ratings. Second: when it comes to diamonds, most people don't know what they're looking at...and wouldn't know if they got a good value or not. 

Diamonds need to be compared and contrasted for the average person to judge its quality. More importantly, a diamond's internal characteristics, which the naked eye can't see, drive a tremendous amount of the stone's intrinsic value and durability.

So a legion of satisfied customer testimonials might help qualify the diamond seller as a reputable merchant (i.e. they ship on time, they accept refunds), but it’s no guarantee that any given diamond on their site is the best one that you could have bought for the dollar.

3. Study the seller.

While a company's good reputation won't guarantee that you're buying the right diamond for your needs, it can eliminate the issues of intentional or unintentional misrepresentation and outright fraud.

Many diamond dealers, jewelry storeowners, managers and salespeople are not gemologists and, more importantly, they don’t control the quality of their diamonds. They often pass enhanced or poorly cut diamonds onto consumers without themselves knowing why the prices are so low. Find out exactly what their credentials are and look for merchants with graduate gemologists on staff. 

Generally, a company that has been in business for years with thousands of satisfied customers is a good bet. However, you shouldn't simply rely on a "Since 19XX" line of text in an advertisement. Talk to people who have done business with the store and find out if they're completely satisfied.

Similarly, look for a company with transparent return and exchange policies. You should be able to get a full refund by whatever you method you paid, with no "restocking fee" or credit-only hassles. For more on what to look for in a seller, click here.

4. Don’t take the grading report lightly.

Some merchants might show you a grading report and say that a diamond is “certified,’ which gives the impression that you needn’t look or analyze further. Be careful not all grading reports are created equally. Many grading reports, unfortunately, don’t provide enough information about the quality of a diamond. Therefore it’s almost impossible to determine if it’s priced correctly.

There are only a very few diamond-grading reports we recommend. We recommend the Gemological Institute Of America (GIA) grading reports issued after 1997 with the new cut grade and full plot (a diagram marking all of the stone's unique, microscopic characteristics and flaws), and the American Gem Society (AGS) grading reports. These reports are the most objective, consistent, and detailed. They include the critically important Cut grade; the Cut grade, generally, represents up to 50% of your diamond’s price. Most grading reports lack this score.

GIA Diamond Dossier reports, which are similar to the full GIA diamond-grading reports but designed specifically for diamonds under two carats, don't include a diagram marking all of the stone's unique, microscopic characteristics and flaws. Without this "plot," it would be impossible to determine if the clarity of your diamond poses durability issues.

It’s dangerous to read the grading report on your own if you don't know what to look for.  You should have an expert to read the fine print and comb through all the variables.

5. Be wary of the term “Ideal Diamond.”

Be careful of diamonds labeled "ideal" or "perfect." These are marketing, not gemological terms.

The term "ideal" is used rather loosely in the jewelry industry; for instance, there are "ideal-cut diamonds," which have specific measurements for each angle and proportion. Only if a diamond's cut matches every one of these parameters should it be referred to as "ideal." Very often, however, people incorrectly label a diamond as "ideal" when only its table and depth percentages fall into the ideal-cut parameters.

The term "ideal" is also not a Gemological Institute of America (GIA) term. 95% of the time, an ideal-cut diamond will receive an "Excellent" cut grade on a GIA grading report, while 5% of the time it will receive a "Very Good" cut grade.

Ideal-cut diamonds are not ideal for everyone. Although they're truly beautiful, they typically have a small table percentage. This means they exhibit more fire (rainbow colors) and less brilliance (pure white-light return). Some customers prefer white-light return over rainbow colors. In addition, a small table percentage usually makes a diamond appear a bit smaller than one with a larger table percentage.

We recommend searching for an "excellent" or "very good" cut diamond rather than one termed "ideal."

Conclusion: Know what you don’t know.

You could search the internet yourself and buy a diamond. You might make a great choice. You might not. Would you really know the difference?

While there's a lot of information available on the internet to help you learn about diamonds, as a novice, you're not going to be able to understand the subtle distinctions that can mean the difference between a great value and overpaying. You have no hope of becoming an expert.

You should have a trained graduate gemologist (G.G.), someone who understands the diamond market and prices, assess every line of your diamond's grading report (preferably from the Gemological Institute of America or the American Gem Society), as well as its "plot," a diagram marking all of the stone's unique, microscopic characteristics and flaws.

You need an expert. Click here for more information.

For more information on diamonds, please see the Diamond Advice section.