This was a great question that I recently received through the ‘Ask The Nerd’ page which you can find at the top menu. If you have questions about the pawn industry then feel free to take a moment and write me – I would love to hear from you. But let’s get to answering that question which was if pawn shops threw diamonds away.
Now I had never heard this before and thought that this certainly deserved its own dedicated response. I do have to admit though, at first I chuckled a little bit when I read this question.
No, I can promise you that pawn shops do not throw diamonds away.
if you know of pawn shop that does, please let me know so that I can go through their garbage.
And I would… the diamonds pawn shops get still have quite a bit of value.
I suppose the reason some people might think that pawn shops throw diamonds away is because they might be disappointed to learn that some of their smaller diamonds just aren’t worth what they may have hoped they would be worth.
But that doesn’t mean a pawn shop can do nothing at all with them. You see a pawn shop can do a lot of different things with diamonds even if they are small.
They Can Sell Them To A Diamond Broker
When pawn shops get larger, nicer stones they can use a broker to get rid of them. Typically speaking a diamond broker has connections to hundreds if not thousands of jewelers and pawn shops and can move diamonds back and forth for a small fee of course.
This is probably the easiest way for a pawn shop to sell large stones.
They Can Sell The Small Stones To Specialize Diamond Buyers
There’s whole groups of specialized diamond buyers who buy small stones and ship them back to where jewelry is currently being made. India is the popular destination at this point from what I’ve been able to tell.
They Can Auction Them Off In A Diamond Auction
There are diamond auctions where you can sell all sorts of stones. Everything from the largest more desirable stones to the smallest chips – these auctions are a great place for pawn shops to unload their diamond inventory.
The Nerd’s Experience
I have a feeling that I know why this question was being asked. Typically speaking pawn shops don’t pay very much for anything but the very most desirable diamonds. Large, bright, clear stones with lots of ‘fire’ will always bring more money that smaller stones. They are worth more and a lot easier to sell.
The small stones however need to be sold in bulk. That means that all of the tiny stones in 5 or 6 rings will have to be combined with all of the other tiny stones in about another 94-95 rings to add up to any kind of substantial money.
So because it takes so many rings to get enough of the tiny stones to add up to a profit for the pawn shops, they don’t typically pawn much for them.
So if you’ve had a pawn shop tell you that the little diamonds were worth much or worth ‘Being thrown away” they may have been making a joke – but they really aren’t able to be sold for very much.
I know that can be difficult to understand because of how expensive jewelry is to buy, but Jewelry Stores are amazingly profitable for a reason… (It’s you)
That Wraps It Up…
If you have any other comments or questions, please leave them in the comment field below and I’ll be happy to get back to you as soon as possible.
Thanks for everything,
The Head Nerd
