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In December 2023, I purchased a solitaire diamond from Caratlane for INR 3,56,000. The only paperwork I received was an invoice and a certificate from Caratlane. I was not aware of any third-party certification, nor did I request one.
Just last week, I visited a Tanishq store to buy a gold chain and spoke with the manager there. I inquired about lab-grown diamonds and their certification. According to him, Tanishq currently does not have IGI certification for all their pieces sold; they only provide it for lot imports and can issue one if specifically requested. Typically, an invoice suffices for their sales.
While at Tanishq, I showed the manager my Caratlane invoice and asked about the possibility of selling or exchanging the diamond. To my surprise, he informed me that I would need to return to Caratlane for the best value, as they usually do not accept diamonds from other resellers. Despite the fact that Caratlane and Tanishq are both owned by Titan and come under the same group, Tanishq was unwilling to offer anything substantial, stating that the maximum they could provide would be 40% of the original value.
When I asked how much they would accept for an exchange if I had purchased the diamond from Tanishq, the manager indicated that they would offer a buyback at 65% for exchanges but still cash out at 40-50%, depending on the condition.
He confirmed that this is the industry norm. Generally, most brands are reluctant to accept diamonds from other retailers because it is challenging to verify and value them. In contrast, gold can be bought and sold anywhere, it doesn’t even require an invoice, as it can be tested and liquefied within minutes.
The resale situation is even worse for lab-grown diamonds (LGDs). The resale value they offer is only 15-20% within a year, as prices have dropped further. Additionally, it must be done through the same store or brand. When I asked if clients request LGD certification at the time of purchase, the manager stated that they provide their own invoices and certifications if the client requests them, and most customers are satisfied with this. He noted that many clients are not even aware of IGI certification, making it inconsequential to them.
There is no doubt that the demand for LGDs may increase over time as they become more affordable. However, companies may or may not pursue IGI certification, as there seems to be no mandate requiring it, based on my interaction.
Disclosure: I have already exited and currently see better growth opportunities elsewhere.
