Do Pawn Shops Pay a Fair Price for Diamonds?

Gold jewelry and diamonds are two of the most common items a pawn shops deals with. If you are looking for some extra cash or just willing to unload some diamonds which are no longer of any use to you, then pawn shops is a very viable option.

Since diamonds are a common item in pawn shops, the brokers working in the shop are very comfortable handling them and are usually aware of the current market prices. This makes pawnbrokers one of the best options for selling or getting a loan against your loose diamonds and you will probably get a decent rate for your diamonds by going through a pawn shop (assuming you’re knowledgeable and negotiate well).

Of course, they don’t pay as much as online diamond buyers who operate at scale and know the market extremely well. If you can wait a couple days for hundreds or thousands more, we suggest you request some appraisals from our recommended online diamond buyers.

Pawn shops are typically interested in slightly larger diamonds, generally over a quarter carat. This is not to say that they would not buy smaller diamonds, but they might be less eager to get their hands on them. Generally, a larger diamond has a much better chance of getting a more respectable value since they are more rare in a pawn shop and have a higher demand with the brokers. Round and princess cut diamonds are some of the most popular cuts with pawn shops.

Pawn shops generally have hundreds or thousands of diamonds less than a quarter carat in size since it is a common size in the less expensive jewelry which is often sold at pawn shops. This is why they are not very keen on getting new ones, however if you have more than a quarter carat then any pawn shop would be interested in paying a fair price for the diamond.

Know your diamond

Diamonds having history with them always have a higher value than those that don’t. For this reason, it is always a good idea to be fully familiar with its heritage and history, if any. If your diamonds have a story to tell, having some proof for the story also goes a long way to add some credibility to the diamond’s history.

One of the best ways to get most out of your diamonds is to get certification for it. The documentation can give the pawn shops a good indication about the size, clarity, color and other properties of the diamond, and allow them to give you a better offer. One of the most credible certification organization is Gemological Institute of America (GIA) who are recognized and are accepted almost everywhere.

Appraisals can also be beneficial since they give you your diamond’s worth. However, you should always be realistic of what to expect from the pawn shops. Selling or giving those diamonds as collateral will always fetch you less than the appraisal value. Sometimes pawnbrokers would offer half or even less than the appraised value, depending upon the diamond’s rarity, quality, and other properties. Even then, getting an appraisal gives you a base price to bargain with when you go to a pawn shop to sell your diamonds and is generally encouraged by brokers as well as sellers.

Loaning diamonds to pawn shops

Pawn shops can grant short-term loans using diamonds as collateral, giving you money in a few minutes. One advantage this has is that, it is quick and does not have any risk or effect on your credit even if you are unable to repay the loan. The loan involves a small loan fee and is usually has a term of a few months.

If you are not willing to sell the item, but need some quick cash, loaning the diamonds is always an option. The value of the loan is generally calculated as a percentage of the fair market value of the diamonds and not the original retail value. Generally, the value of the loan is 50% of the fair market value but some pawn shops can go higher or lower.

Selling would often fetch you higher offers but if you wish to keep the item, then loans are a good option. Typical contract periods vary by state, but are typically around a month with a month of grace period. If you are not able to pay the loan on its due date, most pawn shops can allow you to renew your loans by paying the lending fee from the first loan. You can even pay a portion of the original loan as well and pay the rest later.

How much will you actually get for your diamonds at pawn shops?

The diamonds you bought for $4000 might only get an offer of $1200 at a pawn shop, sometimes even less depending upon the marketability of the diamond itself. On an average, pawnbrokers offer 20-40% of the diamond’s sale value. This was consistently seen throughout our experience with pawn shops as well as online reviews and opinions of consumers who tried to sell their own diamonds to pawn shops.

The price you get at the pawn shop can be helped by appraisals and certifications. Bigger or rarer diamonds also tend to get more percentage of their value than smaller diamonds. The maximum value we observed was someone getting $1300 for their $3000 diamond ring which was a few years old. These values might seem low, but do keep in mind that anything will lose its value when being sold again.

There are several price calculators available online which can give you an idea for your diamond’s sale value. Keep in mind that they might not always be 100% accurate, and a pawn shop would only give a fraction of the value these tools might quote.

As it is with any item, selling it directly to a buyer will fetch you the best price. However, if you do not have a buyer or you are in a hurry, pawn shops do offer a fair price given the market conditions. They do not tend to be lower or higher than jewelry shops but can be more flexible and accommodating to your needs. If you are looking for some pawn shops, you can use our website to find credible pawn shops known to trade in diamonds.