Better diamonds: Costco or Tiffany's?

Breakfast at Costco may not have the same ring to it, but we wondered: Can a Costco diamond ring hold up to one from Tiffany's?

By Smart Spending Editor May 8, 2013 10:32AM

This post is by Claire Suddath from partner site Bloomberg Businessweek.com

www.businessweek.comDiscount wholesale club Costco sells Tiffany engagement rings. Sorry, “Tiffany” engagement rings — diamonds set in silver bands that look like real Tiffany rings, and are even called “Tiffany” at the store, but have nothing to do with the upscale New York jewelry store.

Credit © TIMOTHY A. CLARY/AFP/Getty ImagesThe jeweler says the rings are falsely presented as authentic Tiffany products and is now fighting Costco in a multimillion-dollar trademark suit that seeks to determine whether Tiffany has become the Kleenex of diamond rings — or if Costco’s rings refer specifically to the store that’s actually called Tiffany’s.

Unlike Wal-Mart Stores, which offers diamond rings for only a few hundred dollars each, Costco sells its rings for upwards of $40,000. These lavish prices put the wholesaler, which is known more for its bulk grocery items and free food samples than for luxury goods, in direct competition with expensive jewelers.

We were curious: Is a Costco ring worth it?

On a WeddingBee.com message board, when a woman asked for others’ opinions of Costco jewelry, most of the responses came from women who said that while they weren’t opposed to a Costco diamond, they weren’t really for it, either. “I love Costco for grocery items but I have never even thought to look at their rings,” one woman replied. Another said she thought about shopping there, but: “I was concerned everyone would ask where we got the ring.”

The assumed benefit of a Costco ring is that even at $40,000, you’re getting a higher-quality diamond than you’d be able to afford at a more prestigious store. As with any other name-brand product, Tiffany’s reputation (not to mention the classy Audrey Hepburn endorsement) raises the price of its jewelry.

Meanwhile, that Costco diamond might actually be worth more than its price tag. In 2005, Good Morning America appraised both a Tiffany diamond and a Costco diamond. As it turned out, the $16,600 Tiffany cut was 58% more expensive than its $10,500 value, while the $6,600 Costco version was actually 17% under its appraised value of $8,000. On the WeddingBee.com blog, several women admitted to having Costco rings and said that when they had them appraised, every single ring was worth more than they paid, sometimes by thousands of dollars.

Tiffany offers more services than Costco. Its expert jewelers teach customers about the different cuts and qualities of diamonds. And once a ring is purchased, it can be returned for cleaning or resizing at any time.

Costco doesn’t resize rings. But it does sell six-pound packages of cheese.

More from Bloomberg Businessweek.com:

VIDEO ON MSN MONEY

63Comments
May 8, 2013 2:02PM
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Call me cheap, I am all for the Costco ring. I don't need to pay for the "Tiffany " experience.
May 8, 2013 2:14PM
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Good for Costco,as it offered a better value.
May 8, 2013 2:18PM
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The entire diamond industry is involved in "selling the sizzle", diamonds are not nearly as rare as we are lead to believe.
The whole thing is getting people to believe that they are getting something special, and that means a premium price.
As far as I am concerned getting a great value on something makes it "special" to me and my wife wholeheartedly agrees, after all the real purpose of a diamond engagement ring is as a sort of dowry. Isn't the object to get the most valuable thing and not to be able to say that you got it at a particular store?
Most people don't get this concept and will continue to overspend on virtually everything just so they can "show off".
May 8, 2013 4:42PM
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I bought my wife a ring for $5000 at Costco......had it appraised and it came back at $7700.

 

She doesn't know where I bought it but her friends are always telling me how awesome it is.

 

So, although not a classy jewelry store, I apparently got a great buy!

May 8, 2013 2:55PM
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No one cares or asks where your ring is from.  Get a life!
May 8, 2013 5:43PM
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My ex bought be a $10,000 ring from Tifffany.  It appraised for $5,000.  So, you're paying a lot for that little blue box.


May 8, 2013 4:07PM
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"Costco doesn’t resize rings. But it does sell six-pound packages of cheese." 

I love it. Someone promote this writer.
May 8, 2013 2:38PM
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Do your research, the "Tiffany" rings that Costco sells are set in platinum bands, not silver bands as you stated.

May 8, 2013 4:01PM
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Diamonds are only popular because in the 20's DeBeers' Diamonds paid movie stars to endorse diamonds as a "must-have" item. Prior to the 20's, rubies made up the bulk of engaement rings. There was never a market for diamonds until DeBeers created one. Just like Valentine's Day is a Halmark Holiday, diamonds are a way for a woman to be "in the spotlight". Its sickening
May 8, 2013 3:07PM
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Costco doesnt size the ring, but they will get the right size for you from wherever. It might take a few days.
May 8, 2013 4:05PM
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My big solitaire diamond ring bought for 8,000 ten years ago was recently appraised at 1,200!!!  That's for a good stone.  If I were buying now, I'd go for the Costco ring since jewelry prices are already so inflated.
May 8, 2013 2:42PM
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no smart consumer buys a preset diamond from a national retailer.  buy the diamond from a diamond broker, not from a retailer.  i bought the diamond for my wife's engagement ring from a broker in the diamond district in new york city.  i had it set at the local jareds, in one of their settings.  when the jewler at jared's examined the diamond i gave them, he told me that even their high-end (Leo) diamonds didn't have a comparable quality to the diamond i provided.  i paid about $7,500 for the diamond - and jared's had diamonds of the same size (but lesser 4 c's, and their certifications were a lesser grading system - AGI as opposed to my GIA certified) that cost almost $20,000.  that just goes to show how much the mark-up is from the broker to a retailer.  i also had the ring appraised by the jared in-store appraiser.  the setting appraised for basically the same price i paid jared's to purchase it.  the diamond appraised about twice as much as I had paid.  my wife ended up with a $18,000 ring that cost me less than $11,000.
May 8, 2013 7:01PM
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I loved my Costco engagement ring. It has always appraised higher than the purchase price. If somebody asked where is was purchased I tell them!  If you are rude enough to ask I might tell you Tiffany's!!!
By the way - it's not a silver setting it's PLATINUM.


May 8, 2013 4:12PM
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If you know a little about diamonds then you should go wherever you can get the best prices.  All diamonds come from the same place.  You just have to have an idea about color and grade.
May 8, 2013 6:09PM
May 8, 2013 4:43PM
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Now, let's hear the real truth.  If you buy any diamond ring, the actual market value is about 10% - 20% of the retail value.  So you shouldn't buy any diamond ring retail. You should buy your diamond at auction with a certification document.  A 10K ring can usually be purchased  for between $1,000 to $2,000, and then you could have it remounted if you don't like the setting.  Who cares what store you buy it from unless you are buying a vintage art deco piece or a celebrity-owned piece with provenance, or you simply have money to throw around?
May 8, 2013 4:53PM
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Having worked in the jewelry industry for over a decade, I must say that all of your misconceptions and assumptions are absolutely hysterical. People don't even know why one brand of cereal is more expensive than another and they buy groceries every week, but will still pretend to know it all when it comes to diamond purchases which are made with far less frequency.
May 8, 2013 6:14PM
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First of all a Tiffany ring is a style not the store as we know it.  It refers to the plain band with one diamond set on top in a prong mounting most likely because Tiffany first used that style.  Secondly, a diamond is a diamond except for color and clarity and cut.  Take it out of the mounting and if it is a decent cut, color and clarity no one but an expert can tell you where it came from or who cut it, and that does not mean your local jeweler.  Do you think all store diamonds are fresh out of the ground?  Modern cuts are very similar whether new or used, or previously mounted or whatever.  And I say up DeBeers for keeping all those diamonds stashed away to keep the price up.  Canada and Russia both have tons of diamonds stashed away and they too are controlled by the DeBeers market of inflated prices.  My next (diamond)  will be a manufactured stone.
May 8, 2013 3:54PM
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Jewelry, especially diamonds, are marked up at least 5 times before the public buys them.  It's hard to get 2 jewelers to agree on what they're looking at in terms of the 4 c's. 
May 8, 2013 2:55PM
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The Russians have enough diamonds socked away in vaults to flood the world market and make them worth no more than costume jewelry if they wanted to. Of course they won't do too much of that because it would devalue what they have.
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