HOUSTON — When Claire Parker’s fiancé got down on a knee to pop the question, she was dazzled by the sparkle in his hand.
“The ring was everything I imagined,” she said.
Like most brides-to-be, she took photos and shared her engagement news with friends.
“Everybody said it was gorgeous,” Parker said. “It was a very beautiful ring, until…”
Until she learned later that the one-carat gem was a lab-grown diamond that cost her fiancé $4,000.
“My heart sank,” she said.
“I couldn’t imagine someone having been taken advantage of in that way,” added her mother Amanda Parker.
The Parkers took the ring to Fred Cuellar, owner of Houston-based Diamond Cutters International, who has authored several books including How To Buy a Diamond.
Cuellar said he told the mother and daughter the engagement ring had little secondary value and was worth about $100.
“They were just stunned because the first thing she said to me was ‘That can’t be, he paid thousands of dollars for it,’” he said.
Cuellar, who deals only in earth-mined diamonds, said he is not “anti-lab-grown” but wants consumers to be aware of huge mark-ups in the industry.
“It’s a good product, it’s just not priced correctly,” he said.
The popularity of lab-grown diamonds has surged in recent years, with the sale of loose lab-grown stones eclipsing 50% of the market in 2023, according to the jewelry analytics company Tenoris. They typically sell for much cheaper than mined diamonds, offering budget-conscious consumers bigger bling for their buck.
But Cuellar said most consumers have no idea about the profit margins in the lab-grown space.
“They’re taking stuff that costs $100 per carat and they’re marking it up exponentially for crazy amounts,” he said. “A thousand percent mark-up or $1,000 to $1,100, sometimes more,” he said.
Marty Hurwitz represents growers, manufacturers, and retailers as executive director of the Grown Diamond Trade Organization.
“It’s a free market,” Hurwitz said. “Everybody in the supply chain can charge whatever they want to a willing buyer and a willing seller.”
Hurwitz disagreed with the claim of “crazy margins” in the lab-grown industry. He said it has become an incredibly competitive environment, especially for e-commerce sales, where online retailers can spend millions on advertising
As for holding value, Hurwitz said consumers would be “pretty shocked” to learn how little they could get for selling their mined diamond. He said the lab-grown industry is more focused on the emotional investment.
“We like to say we’re in the love business, we’re not in the investment business,” Hurwitz said. “If you want an investment, you go see Charles Schwab.”
Hurwitz said his organization is committed to full transparency when it comes to retail sales of lab-grown diamonds. The Federal Trade Commission requires retailers to use phrases such as “laboratory-grown,” “laboratory-created,” or “(manufacturer name)-created” to distinguish the product from an earth-mined diamond
Additionally, lab-grown diamonds should have laser inscriptions that read “lab-grown” or “LG” on the girdle of the diamond.
Both Cuellar and Hurwitz said it comes down to consumer choice. And now, there are more choices than ever.
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