How Do Pawn Shops Price Diamonds – Solved!

Brian McCracken


How do pawn shops evaluate and price the diamonds that come in? Learn inside!
One of the biggest areas of confusion for people are the value of diamonds at pawn shops.
The question that I’m almost always asked is “How Pawn Shops Price Diamonds?”
Well, just like gold and silver, diamonds are valued based on their rarity.
Gold is less common than silver, so it is worth much more.
On the same hand, diamonds are less common than gold, so they are much more valuable.
The value of a diamond is based on something known as the 4 C’s.
That is:
Carat – the weight of the diamond.
Color – the amount of tan or yellow tone in the diamond.
Clarity – the amount of defects in the diamond that make it less clear.
Cut – the manufacturing quality of the diamond when it was cut into a shape.
Small diamonds are very common. Larger diamonds are less common and therefore worth more.
The other three things describe how clear the diamond is or how well it was manufactured (cut.)
Most diamonds out there are very slightly tan or yellow, basically being just off-white.
Very good diamonds are colorless (completely transparent), with no inclusions, cloudiness, marks, etc. inside of them.
Many diamonds have inclusions or carbon in them, making them less valuable.
Inclusions are little white marks in the diamond. If you look at them closely, you could almost imagine it as looking at bubbles frozen in an ice cube, or little ‘feathers’ in the stone.
In the worst case scenarios, you will see tiny dark flakes or spots. This is carbon and a very bad thing for a stone to have in it.
All of these things factor into the value of the diamond, both when you buy it new and then, when a pawn shop examines it for a loan or to buy it from you.
The better a diamond is, and the larger it is, the more it is worth.
In many cases, the diamonds brought into pawn shops on an average day aren’t exceptionally colorless or clear, and that’s because of how expensive those types of stones are when you are buying them new.
When you take your jewelry into a pawn shop, how does a pawn shop price the diamonds you ask? Well, they look at the carat weight, color, clarity, and cut of the stones to determine the amount of money that they can give you on a loan or on a sale for them.
Why Pawn Shops Evaluate Diamonds This Way
When a pawn shop is loaning on something or buying it, they do so based on what they think they can sell an item for.
Pawn shops have to look at these things because if they have to melt the jewelry if you forfeit the loan, a diamond buyer is going to pay the pawn shop for those diamonds based on all of these factors.
So, the only way for a pawn shop to determine what they can loan you or buy your diamonds for is to base their evaluation on the same criteria that it would be sold on, should they have to do so.
The Value Of Diamonds At A Pawn Shop
As previously discussed, diamonds are valued based on their rarity.
The larger the stone is, the more it is worth. The more colorless and clear a stone is, the more it is worth.
The easiest way to tackle this topic is to break it down into large and small diamond categories.
Large Diamonds
Typically speaking, you could be paid between $100-$600 per carat of diamond for stones greater than .25 carat weight depending on the color and clarity of the diamonds.
If a single diamond in the jewelry is larger than 1.01 carats, that price increases substantially.
If a single diamond in your jewelry is over 3 karats, clear, colorless, and not lab enhanced – that could be $3,000-$10,000 per carat weight depending on the total size of the stone.
Important Note: Even larger diamonds that are off-color or have poor clarity won’t be worth a significant amount. You can estimate a reduction in value by at least 50% for these stones.
Small Diamonds
Diamonds that weigh less than .25 carats are worth far less because they are much more common.
Typically speaking, these stones will be worth about $.25-$1 per point, as long as they are full-cut stones. There are 100 points per carat.
When you get down to what are known as “Chip” stones, the value is almost not even worth taking into account when a pawn shop is evaluating diamonds.
A chip stone is literally just a “Chip” off of a larger diamond, normally collected when a larger, more valuable stone is being cut and formed for a much more expensive piece of jewelry.
Chip stones have very little commercial value on the second hand market, and in some cases, may just be used for the industrial manufacture of “Diamond” saw blades. In other words, they almost aren’t considered to be a part of the jewelry itself.