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The European Gemological Laboratory Organization
Unlike the GIA and AGS, The EGL (European Gemological Laboratory) is a for-profit organization. Not coincidentally then, the EGL is consistently “looser” than the GIA.
I used to call on a very shrewed jeweler in Pittsburgh named Michael Kurtz. He owned a nice little shop called Goldstock Jewelers. He used to keep a 5 carat pear shape displayed in his showcase with two certificates on either side of the diamond.
One was from the GIA and one was from the EGL. If I recall correctly (it was a long time ago!), the GIA certificate graded the stone as a “J” color with a “VS1″ clarity. The EGL graded the stone with an “H” color and a “VVS2″ clarity!
As a for-profit organization, they made a few very shrewd observations in the market and delivered very effective solutions. First of all, the GIA and AGS are too expensive (a 1 carat diamond can cost around $100 to certify!). Secondly, they both offer terrible service.
Additionally, they used to take a very long time to grade the diamonds sent to them.
Furthermore, both the GIA and AGS don’t offer “pre-cert” options – this basically allows the company sending in the diamond for certification to only pay for the grading service and not for the certificate and only decide after receiving the results if they want to pay for the certificate to be printed.
Also, as I mentioned in my article about clarity, the GIA’s “I1″ grade covers too much ground. There are some “I1″ clarity diamonds that just barely miss an “SI2″, and there are some that are not even close to an “SI2.”
EGL solved all of these problems. They are cheaper, they offer better service, they are quick, they offer pre-certs, and they invented a new in-between clarity grade of “SI3.”
This explains why EGL became as popular as it did for diamond merchants, but the fact remains that as a consumer you have to be extremely careful buying an EGL graded diamond.
If I had to estimate the average “upgrade” received from EGL for an identical diamond versus the GIA, I would estimate 2.5 upgrades either from color or clarity or both.
For example, if the GIA would grade a diamond an “I” color and “SI2″ clarity, receiving an “H” color and “SI1″ clarity would be consider two upgrades (one color + one clarity).
But if that same diamond received a “G” color and “SI1″ clarity, it would be considered three upgrades (two color + one clarity).
The entire diamond market is aware of this, of course, and therefore EGL graded diamonds sell at a significant discount when compared to diamonds of equivalent grades certified by the GIA.
The Difference of EGL Locations
One more important note: the different EGL locations are all separately run businesses. EGL Los Angeles, and EGL New York have the best reputations. EGL Europe and EGL Israel are known to be so loose that they are bordering on fraud.
What I’ve explained in this article until this point is from the point of view of the diamond manufacturer. But what should you do, as the diamond consumer?
Almost without exception, you should never buy an EGL certified diamond.
Firstly, lets dispose of the obvious – EGL certificates originating from Israel, Europe, or elsewhere other than New York and Los Angeles are for all intents and purposes fraudulent.
As for NY and LA – I believe you can break down EGL certified diamonds into two groups:
GIA I1 Range
Diamonds that would obviously be graded GIA I1 – The Rapaport price list gives very low prices for I1 clarity diamonds. This is a significant problem because the GIA I1 clarity grade has a very wide range.
Within that grade, there are stones that just barely missed getting the SI2 grade, and there are stones that are really strong I1s that are in a completely different class than the nice GIA I1s.
From a GIA I1 to an EGL SI2 or SI3
Because of this discrepancy, diamond companies will almost never send their nice I1s to GIA. They will either sell them as loose diamonds, or they will send them to EGL to receive either an SI2 or SI3 clarity grade.
Even though these stones will be sold at a much steeper discount to the Rapaport price than their GIA equivalent, the diamond manufacturer will still make more money this way versus selling the diamond loose or selling the diamond as a GIA I1 with a smaller discount to the I1 Rapaport price.
If you’re considering an EGL SI2 or SI3, you need to realize that while most companies don’t certify GIA I1s, some do. And those are by definition a better value for you.
The Choice Between GIA I1 and EGL SI2
The companies who do use EGL for these stones are only doing it to make more money on the same stone. So you have a choice. You’re buying one stone.
Would you rather that stone have a GIA certificate that says I1 and the price will be less, or would you rather that stone have an EGL certificate that says SI2 and the price will be more?
Remember, it’s the same stone! The answer is obvious.
Furthermore, the majority of stones at this quality level aren’t eye clean anyway – so most definitely even if you’re considering buying an EGL SI2 or SI3, you can never do this blind.
You must be able to inspect the stone first. The odds of a stone like this being truly eye clean are remote at best.
GIA SI2 Range
Diamonds that would receive SI2 or better from GIA – The modus operandi for the vast majority of diamond manufacturers is that they first send their productions to GIA.
When they get the results back from the lab, they review their stones one by one to see how they can squeeze out more profit. Recheck a stone here. Recut a stone there (either to improve clarity or cut).
Deciding on an Upgrade from EGL
Another popular way to squeeze every bit of juice out of a diamond production is to review the results from GIA and decide which stones have the potential to receive enough of an upgrade from EGL to offset the higher discounts to the list prices and therefore make more money.
There’s little risk in doing this, since EGL offers pre-certs – meaning that the company sending the diamond for inspection only pays the full amount if they OK the results (as opposed to the GIA where you have to pay the full amount regardless of the results).
And you know what the company will do if the diamond gets enough of an upgrade to make the stone worth more as an EGL certified stone? They simply throw away the GIA cert and pretend it never existed.
So I ask you again – The same stone is certified by GIA as I SI2 and certified by EGL as G SI1. Would you rather pay more for the stone buying it as an EGL, or would you rather pay less buying the stone as a GIA? Again, it’s the same stone!
As you can see, in pretty much every case across the board, the very presence of an EGL cert almost invariably implies that the stone is certified this way to make more money for the vendor vs keeping the stone’s original GIA certificate.
Less is More
You’re better off searching for a GIA certified stone that’s two or three color grades lower and one or two clarity grades lower and most importantly – cheaper.
Bottom line is, don’t buy an EGL certified diamond. No matter how “cheap” it seems to you compared to GIA certified diamonds, it’s all a game.
Any EGL certified stone in the market is, by definition, more expensive than itself as certified by the GIA.
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