Many jewellers allow you to ‘upgrade’ your diamond for a new and bigger one. But make sure you get a fair price.

When your fiancé first proposed, you were happy to take what you could get. After all, the poor guy was just starting out. So you squinted at the speck of diamond in your ring and told him it was the most beautiful thing you’ve ever seen. But now that he’s got a decent job, you may be wondering: Isn’t it time for an upgrade?

Many couples are deciding that it is. According to the trade association Jewelers of America, diamond upgrades—where you trade in your original stone and get a juicy discount off a new, bigger one—are a growing trend. The credit is usually worth what you originally paid for the rock, and the replacement is reset in the original ring.

Many jewellers offer the service, but the new stone has to be a big step up from the old. Usually, it needs to cost at least 150% or 200% more than the original diamond.

It’s a much better option than going out and buying a new ring. Antoinette Matlin, gem expert and author of Diamonds by GemStone Press, says the credit you get on trading in the original stone is always higher than what you could get if you just sold it without making another purchase. “Selling your stone, rather than upgrading, means you’re now competing with the wholesale market,” she says. Jewellers need to outlay cash to buy your diamond, but they don’t get a cut of the new sale, so that reduces the price they’re willing to pay.

When you’re upgrading your diamond, you don’t necessarily need to go back to the store where you purchased it. Any independent retailer will offer you a similar deal.

Before you do it though, it’s probably worth getting your original diamond appraised, especially if it’s a fine-cut stone. One of the reasons jewellers offer upgrades is because some diamonds appreciate significantly over time, and they hope to profit by paying you the original price. Fine-cut stones have had a big gain in value in recent years, in part due to demand from India, so if your diamond is in this category, make sure to shop around for the best price.

Your diamond is definitely worth getting appraised if you check the certificate that came with it and find that it has all of the following characteristics: its standard is rated “very good” or better; it has a colour-grade of H or better (I or J is acceptable in larger stones); it has a VS2 clarity or better; and it weighs 0.90 carats or more.

If your diamond fits the bill, go to an independent, recognized gemologist and pay a nominal fee for the appraisal. “Armed with this information,” says Matlin, “you can go into an independent jeweller and start to negotiate.”

Originally published in MoneySense Magazine in December/January 2010

Romana King

Romana King is an award-winning personal finance columnist and real estate expert. She specializes in creating editorial content that uses data to help home buyers, sellers and investors make smarter real estate decisions.