Breakfast at Tiffany’s just became a hot-dog lunch at Costco.
The warehouse retailer, known for selling bargain-priced toilet paper, tampons, frozen pizzas and steaks in bulk, sold a $400,000 diamond ring last quarter.
It also looks strikingly similar to one at Tiffany and, what’s more, jewellers say it’s a quality ring at a fair price point.
‘The price point makes sense, it’s a good price point. You will pay at least 30% more at a luxury jeweler.’
Costco Wholesale’s COST, +0.62% chief financial officer Richard Galanti said on an earnings call last week that a Costco customer made a “significant diamond ring purchase in the $400,000 range” calling it one of the “sales highlights” of the quarter.
While he did not reveal the exact ring, Costco’s website has a “Round Brilliant 10.03 carat VS1 Clarity, I Color Diamond Platinum Solitaire Ring” for $419,999.99.
Costco declined to comment.
“It’s a very good stone,” Igal Dahan, who has made jewelry for stars, including Kim Kardashian and Elton John, told MarketWatch of the six-prong, near colorless round brilliant diamond. Dahan said it’s Tiffany TIF, +1.19% quality without the label. “They used platinum for the ring, that’s the most expensive metal.”
Dahan was also impressed at the near colorless stone, adding that the clarity of the diamond raises the value of the ring. The Gemological Institute of America or GIA, an independent laboratory that issues certifications for diamonds in the form of a grading report, uses a scale of D (colorless) to Z (light color). The Costco ring was rated an “I,” which Dahan says is good.
Costco
“The price point makes sense, it’s a good price point. You will pay at least 30% more at a luxury jeweler,” he said, factoring in the cost of advertising, marketing and retail expenses that other jewelry stores tack on.
In fact, Costco’s 10-carat ring looks similar to The Tiffany Setting Engagement Ring in Platinum, which also has a six-prong setting. Tiffany does not list a price for that ring on its website, but MarketWatch reached out to a customer service representative who estimated a 10-carat diamond in the same style would cost over $1 million. A 5-carat diamond in the same style would be priced at $257,000, they said, however prices vary depending on the type of diamond.
The jeweler did not immediately respond to a MarketWatch request for comment.
‘For a ring with an extremely rare and valuable 10-carat diamond, the price of the diamond ring is driven mostly by the attributes of the diamond rather than the mounting.’
“The solitaire mountings are quite similar in that their simplicity lets the diamond do the talking,” Grant Mobley, a diamond expert and trade lead for the Diamond Producers Association, says.
“The premium price that comes with the prestige and service of traditional luxury brands is most apparent in rings with small and medium-sized diamonds,” he said. “For a ring with an extremely rare and valuable 10-carat diamond, the price of the diamond ring is driven mostly by the attributes of the diamond rather than the mounting.”
Costco got into hot water in 2017 when Tiffany & Co. sued the big-box retailer for selling rings marketed with Tiffany’s name even though they were not actually made by the New York City jewelry company.
The Costco rings had a pronged setting, which the store claimed was “commonly known as a “Tiffany” setting,” but some display cases flat out described the rings as “Tiffany” rather than “Tiffany style” or “Tiffany setting.” Costco had to pay Tiffany more than $19 million in the trademark infringement battle.
Experts stress the importance of buying a Gemological Institute of America-certified diamond, especially if it’s for a stone that’s larger than one carat.
Americans spend an average of $5,680 on an engagement ring, according to the latest data from wedding website The Knot. Costco sells diamond rings that range in price from $200 to upwards of $100,000. Experts stress the importance of buying a GIA-certified diamond, especially if it’s for a stone that’s larger than one carat.
“The first thing to always look out for is to make sure you’re comparing apples to apples. You want to make sure the diamond is certified by GIA and no other lab,” says Olivia Landau, founder and CEO of The Clear Cut, a direct-to-consumer custom diamond engagement ring business.
“Some people will tell you the color and clarity, but might hide the fact that there’s strong fluorescence. It’ll all be mentioned on the GIA certificate.”
While Costco seems to be selling quality diamonds, there could still be a stigma that surrounds buying a precious gem in the same place shoppers can get a 40-ounce bottle of ranch dressing, lawn mower or trash bags instead of a boutique jewelry store with soft carpet.
“I don’t think the person who buys it from there will advertise it,” says Dahan.
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