Sell loose diamonds: reading the report before a buyer does

Diamond Buyers NYC is an independent referral service, not a buyer, pawnshop or dealer. When you call or send the form, your details go to an independent buyer in New York, who makes any offer. Callers from anywhere can ask; the buyers are in New York City.

Where loose diamonds come from

Most loose diamonds a person sells came out of something. A center stone was taken out when a ring was reset. A pendant broke and the stone was kept. A relative bought a stone as an investment and never set it. An estate turned up a folded paper with a stone inside. Knowing the history helps you find the paperwork: a stone bought loose often came with a report, while a stone taken out of an old ring usually did not.

Reading a grading report

A grading report is a laboratory’s description of one diamond. GIA, which developed the grading system diamond professionals use, describes a stone by four factors: clarity, color, cut and carat weight. IGI is another laboratory that issues diamond reports. Whichever laboratory wrote yours, a buyer reads the same things.

On the report	What it means	Why a buyer cares
Carat weight	Weight in carats. A carat is 200 milligrams and a point is one hundredth of a carat.	Weight sets the size bracket a buyer prices in.
Color	GIA grades color against masterstones on its D to Z scale.	Nearer D usually means more desirable in a white diamond.
Clarity	What a grader sees inside and on the surface. Flawless, the top grade, means nothing visible to a skilled grader under 10x magnification.	Fewer and smaller marks usually mean a more desirable stone.
Cut	How well the stone is proportioned and finished.	Cut drives how bright the stone looks.
Shape	Round, oval, cushion, emerald, pear and so on.	Demand varies by shape.
Origin	Natural, or laboratory-grown.	Under the FTC’s guides a lab-grown stone must be described clearly as laboratory-grown or similar.
Report number	The laboratory’s reference for this stone.	It lets the buyer look the report up.

One more term worth knowing: under the FTC’s jewelry guides, a diamond described as ‘brilliant’ or ‘full cut’ without qualification is a round stone with at least 32 facets plus the table above the girdle and at least 24 facets below. If your report or receipt calls the stone a round brilliant, that is what it means.

Look it up before you sell

GIA offers a Report Check on its website where a report number can be looked up. Do it at home before you show the stone to anyone. If the online record matches your paper, you can tell a buyer the grades with confidence. If it does not match, or no record comes back, find out why before you sell. The article on how to check your GIA report goes through it.

Why a report helps you sell

• It speeds up every offer. A buyer can work from the report’s grades and check the stone against them.
• It makes offers comparable. Every buyer is pricing the same grades, so the difference between offers is the buyer, not the description.
• It settles natural or lab-grown. The report says which, and US rules require a lab-grown stone to be described as one.
• It is portable. A report number lets you describe the stone exactly before anyone has seen it.

Selling a loose diamond with no report

Plenty of loose diamonds have no report, especially older stones and small ones. You can still sell them. The buyer grades the stone themselves, and each buyer’s estimate of color and clarity may differ a little, which is exactly why a second written offer matters more here.

Is it worth getting a report before selling? For a larger stone of good quality, a report can make offers far easier to compare and may widen the pool of buyers. For a small stone, the cost of grading may be a large share of what it will sell for. Ask a buyer’s opinion before you send a stone to a laboratory; there is no obligation to sell to them. And if you want a written value for another reason, such as an estate, the page on diamond appraisal in NYC explains how an appraisal differs from a report.

Natural or laboratory-grown

Laboratory-grown diamonds are diamonds, but they are not mined, and US rules treat the difference as something a seller must disclose. Under the FTC’s jewelry guides, a laboratory-created diamond described with words like ‘cultured’ must carry a clear disclosure such as ‘laboratory-created’, ‘laboratory-grown’ or ‘[manufacturer name]-created’. If your report or receipt uses any of those words, tell the buyer up front. If you have no paperwork, the buyer will want to establish which it is before making an offer. Ask how they value each kind.

Looking after a loose stone until it is sold

Loose diamonds are small, and they go missing in ordinary ways: down a drain, into a carpet, out of an envelope. Until it is sold, keep the stone in a closed container or a folded diamond paper inside a box, with the report kept separately. Do not clean it with anything abrasive. When you go to a buyer, keep the stone in your sight and do not leave it behind to be looked at later.

Where to sell a loose diamond

People searching where they can sell a loose diamond usually weigh a few options. A diamond dealer or buyer prices stones every day and resells them to the trade. A jeweler may buy a stone it can set and sell. An auction or consignment sale puts the stone in front of the public, for a fee or a share, and pays when it sells. An online-only buyer asks you to send the stone or its details to a company you cannot visit.

In New York City the trade is unusually concentrated: on West 47th Street between Fifth and Sixth Avenues, which the 47th Street BID describes as having the largest concentration of diamond and jewelry related companies and retailers. That makes it easy to show one loose stone to several buyers in one trip. The guide to the Diamond District NYC sellers use explains how, and the step-by-step guide on how to sell diamonds in NYC covers the sale itself.

What a New York City buyer must do

• Hold a DCWP Secondhand Dealer General licence, posted in view, with the licence number on your receipt. A business that buys exclusively online is exempt.
• See your official photo ID, record its type and number, and have you sign in front of the dealer.
• Record a description of the stone, any identifying marks, and your name and address, and keep the record for three years.
• Not buy from a minor, and not resell the stone within 15 days of buying it.

Comparing offers on a loose diamond

1. Give every buyer the same information: report number, carat weight, shape and origin.
2. Ask what grades each buyer is assuming if the stone has no report.
3. Get each offer in writing with the date and the buyer’s licence number.
4. Compare the offers with each other, not with what the stone cost in a store. A retail price includes the store’s costs and margin, so an offer is lower. The guide to diamond resale value explains why.

Taxes on a loose diamond sale

If you sell for more than you paid, the profit may be taxable. The IRS says net capital gains from selling collectibles, such as coins or art, are taxed at a maximum 28% rate (Topic 409). Ask a tax professional how that applies to your stone.

Questions people ask