Not all Americans are showy. There are many plain sort of folks out there who don’t need fancy things. But even those plain sort of folks can end up with gold or diamond jewelry through a family member or marriage. And even though these regular people are not consumed with consumerism, they still fall into the trap of thinking diamond jewelry is very valuable.
Before the yelling starts about me being against the jewelry industry, I’m not. I just find it ironic that the same American people who buy a TV for $700 that is worth $70 in 6 years, or buy a car for $20,000 that is worth $5,000 in ten years, get upset when they find out the ring they bought at Zales for $4500 is only worth $450.
If you choose to spend $8000 on a ring for your engagement, that is okay. Just remember it is probably only worth 10%-25% of that if you buy it at a national chain jewelry store. The reality is that most of the cost of the ring is the store’s overhead. That is the cost of the building, the labor, taxes, and profit. The wholesale cost of the ring itself is a small percentage of the total cost you are paying. And even a smaller percentage of that is the actual value of the diamonds or the gold. When you buy new, you are also paying for the creation of the ring.
This is why when you buy a ring at a major store they usually have a no return policy. Or they have a policy where they will take the item back IF you spend TWICE as much on a new item. Wow, nothing like losing twice as much money as the first time.
The jewelry industry has great marketers and marketing strategies. One thing you will see often is a ring listed with a “Ctw” – Carat total weight (or TCW). What they will do is put 20 little five point diamonds in a ring and call it 1 carat, total weight. It sounds good at first, like having 100 single dollar bills gives you $100. But it doesn’t work that way with diamonds. It is more like saying that if you have 10 Volkswagens you have a Maserati. Well my friends, if you have 10 Volkswagens you do not have a Maserati, you have 10 Volkswagens!
Some of you may be wondering what the alternatives to buying at the box stores is, and my answer is to shop pawn shops and second hand stores. You don’t need to know much to get a better deal. The rings pawn shops buy from individuals are mostly of the same quality as those you get at Jared’s, Kay’s or Zales. In fact they were probably bought there originally.