Selling Diamond Rings at a Pawn Shop

Any way you cut it, selling your diamond jewelry at a pawn shop will get you less money than other alternatives. Pawn shops leverage desperation to squeeze every last dollar out of their purchases. Selling to a reputable wholesaler online like Abe Mor will get you much better buck for your bling.

Whether you’ve canceled your engagement, ended your marriage, run into a difficult financial period or simply want to upgrade from your existing engagement ring to a new, bigger or more beautiful one, there may come a time at which you need to sell your diamond ring.

Enter the pawn shop. Thanks to flashy, highly visible signage and advertisements everywhere from local papers to Google’s search results, pawn shops are often the first place many people turn when they need to sell their old, used diamond rings.

While they might be a good place to shop for a used TV, musical instrument or set of power tools or other items, it’s not a good idea to sell your diamond ring or any other high-end jewelry here. 

Because of the pawn shop business model, you not only won’t get back anything close to the price you or your fiancé originally paid for your ring — you probably won’t even receive its fair market value.

We’ve explained this in more detail below, as well as several better alternatives to selling your diamond ring or other precious jewelry to a pawn shop.

Here’s what we’ll cover in this article:

How does a pawn shop work?
Is it worth it to sell a diamond ring to a pawn shop?
What are other ways to sell a diamond ring?
Tips on how to sell a ring in a pawn shop

How the Paw Shop Business Model Works

Pawn shops, or pawnbrokers, have been around for thousands of years, with a business model that dates back all the way to Ancient Greece. 

The pawn shop business model is fairly simple. You, or someone else, walk into the pawn shop and give the pawnbroker something you own. The pawnbroker then gives you a loan, using the item you’ve provided as collateral for this loan.

This process is called pawning the item. After you pay back the loan and any interest that the pawn shop charges, the pawnbroker gives back the item you’ve provided as collateral and the process is finished.

In the event that you don’t repay the loan, the pawnbroker keeps the item you pawned and sells it to recoup their loss. 

Most of the time, any loan that you’ll receive from a pawn shop will be for significantly less than the item you’re pawning is worth. For example, if you pawn a watch with a used value of $1,000, the pawnbroker might offer you a loan of $250 to 600. 

Pawn shop loans tend to be short term, with most made out with a repayment deadline of one to six months. 

Alternatively, you can also choose to sell an item to a pawn shop. In this case, the pawnbroker will pay you a flat fee for the item you’re selling. Usually, this fee is a small fraction of the item’s value, as the pawnbroker needs to be able to make a profit when selling the item.

Is Selling a Diamond Ring to a Pawn Shop Worth It?

No. Selling a diamond ring to a pawn shop is never a good idea. When you sell a diamond ring or any other diamond jewelry to a pawn shop, you can expect to receive a small fraction of what the diamond and setting is actually worth as payment.

Here’s why. People shop at pawn shops to get a good deal on pre-owned items. No one walks into a pawn shop expecting to pay the market price for something. Pawn shops almost always attract customers because their prices are well below the market average.

This means that pawnbrokers either need to keep their costs very low, or make money through the loans they give out.

Take a pawn shop loan for example. Once fees and interest are calculated, a typical pawn shop loan can easily run to more than 200% APR. This means that a pawn shop gets a high return on investment simply by loaning out money using people’s items as collateral.

In order to get a similar return on investment by selling a used item outright, a pawn shop needs to buy it at a very low price. Not only do they need to make a profit on the sale — they also need to pay their rent, employee salaries, utility bills and other expenses.

There are also other factors that make a pawn shop a bad place to sell a diamond ring. The first is that most pawn shop owners aren’t diamond experts. As such, if you have a particularly large, clear or colorless diamond, they may not be able to recognize and accurately appraise its value.

The second is that a pawn shop’s primary resale market is local. They might try to sell your ring locally, or pass it on to a local jewelry store. This is a smaller market than online, necessitating a lower selling price (which means, in turn, that they can afford to pay less for your ring). 

Finally, there’s the negotiation factor. Pawn shop owners and employees are experts at finding small, imperceptible flaws in products that allow them to offer you a lower price. If you’re not an experienced negotiator, it’s easy to get taken for a ride and only end up with a small fraction of what your diamond ring is actually worth. 

Because of these factors, the average consumer only gets about 30 to 60% of what their item is worth when they sell to a pawn shop. As pawn shop owner Jeff Bernard points out “the person that is the better negotiator is the one who’s going to get the better deal”. And that is what pawn brokers do all day.

Alternatives to Selling Your Diamond Ring at a Pawn Shop

As we explained in our guide to selling diamonds, unless you have an exceptionally rare stone (a situation we have never encountered), you will always lose money when you sell a diamond ring. 

This is just a simple reality of the jewelry industry. Let’s say you bought a loose diamond from a jewelry store for $5.000. Assuming the jewelry store sold it with a 25% markup (theoretical only — most jewelry stores have a higher markup than this), this means it cost the store $4,000. 

Even if diamond prices have risen 10% since you bought the diamond, the market price for your diamond is still lower than what you paid. 

Now, there’s also the fact that no store is going to buy a pre-owned diamond ring at the market price when they could purchase a new diamond and setting from a supplier either at the same price, or on consignment at no immediate cost. 

The end result of this is that regardless of how and where you sell your diamond ring, you won’t receive its market value and will always lose at least some amount of money compared to what you or your fiancé originally paid. 

However, there are a variety of options for selling a diamond ring, some of which will cause you to lose less than others. Based on all of our secret shopping, selling your jewelry to Abe Mor was the easiest and most profitable course of action.

The first of these is selling the diamond privately on eBay, Craigslist or another platform. This is probably going to recoup you the largest percentage of the diamond’s original price. However, it can be a slow process and finding buyers for a used engagement ring isn’t always easy.

The second is to sell it to a local jewelry store. Since jewelry stores already have suppliers that can sell them diamonds directly at very good prices, they’re unable to offer you very much. For the most part, you’ll be offered an amount well below the market price for your diamond. 

The third option is to sell your diamond ring to a company that specializes in buying pre-owned diamonds. These companies will have the diamond inspected by a lab like the GIA, then offer a price based on its quality and value.

We compared several of these companies in our guide to selling a diamond and found that Abe Mor offered by far the best prices. While you won’t get back what you paid for your ring, you will get much more than you’d receive from a pawn shop.

If You Must Sell at a Pawn Shop, Here’s What to Do

If you’re dealing with a serious financial emergency and need to sell your diamond ring as soon as possible, a pawn shop might be the only viable option. 

In this case, it’s important to go into the pawn shop with a full understanding of how the process works, as well as the most common hazards that can affect you as a buyer:

• If you’re pawning your ring rather than selling it, make sure you’re aware of the true cost of the loan. Pawn shop loans are designed for the short term and can become incredibly expensive if you’re slow to pay due to extra fees and high-interest rates.
  
• Double check the contract, including the fine print. If you’re not sure about something in the agreement, make sure it’s clarified before you agree to anything.
  
• If you’re selling the ring outright, visit a variety of pawn shops to see what they can offer for your jewelry. You may find that some pawn shops offer higher prices than others due to a stronger understanding of the diamond market or a better ability to sell your ring.
  
• Before you sell anything to a pawn shop, check the reviews of the shop using Google or Yelp to see what other customers think. Did they have a positive experience, or did they recommend against selling there?
  
• Visit jewelry stores as well as pawn shops. Although local jewelry stores won’t offer you the market price for your ring, they may offer you more than a pawn shop.
  
• Before you accept any offer, negotiate with the pawn shop owner or employee to see if you can get a better price for your ring. Pawn shop staff often offer a low price to begin with, hoping to take advantage of customers that aren’t prepared to negotiate.
  
• Be prepared to walk away. While many pawn shops are fair businesses, some can take advantage of customers that need cash urgently. If you don’t feel that you’re being given a fair deal, be prepared to walk away from the transaction.

As we covered above, selling to a pawn shop is rarely a good idea when there are many better alternatives available. However, if you absolutely must sell at a pawn shop, the above tips may help you get a slightly better price for your diamond ring.

Received great in-depth assistance from Veronika on my quest to buy an engagement ring for my partner. It can be quite a minefield for someone without industry know-how to get a great, well-cut diamond on the online marketplace, so the second opinion was not only welcome but desperately sought. In the end, I received wonderful advice and am confident the diamond purchased was the best my budget could afford! Thank you

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Arthur

Jan 27, 2023

Diamonds Pro helped us pick a diamond, according to our budget and a few other criteria. We ended up buying a loose diamond from James Allen. We felt that we got very good value for money. The diamond was appraised by another jeweler where we live, confirming its characteristics and value. Finally, we had the diamond set in a ring by a local jeweler, and we’re very pleased with the result! Thank you Diamonds Pro 😊

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Mikeela Teaquila

Dec 26, 2022

Conclusion

Pawn shops will rarely offer you a fair price for your diamond ring, with most only paying a small fraction of what your jewelry is actually worth. As such, we don’t recommend selling a diamond ring or any other precious jewelry to a pawn shop. 

Instead, you’ll almost always get the best price by selling to Abe Mor. While they won’t pay you in minutes like a pawn shop will, you’ll be paid a much better price for your diamond within a couple of days of receiving their final offer. 

Alternatively, you can use the contact form at the bottom of our guide to selling diamonds to get in touch with our team. We’ll then pass the details of your item on to our contact in the diamond district and send you more information.

James Allen James Allen is the leader in online diamond sales. Their imaging technology is the same as inspecting a diamond with a jeweler's loupe. They have the largest exclusive loose diamond inventory online and fantastic prices. They also have the nicest collection of lab-created diamonds online. They currently run a 30% discount on selected lab-grown diamonds!

Click to Visit

What we love about them:

• No questions asked returns within 30 days of shipment. James Allen will send you a paid shipping label to return the ring.
• Lifetime Warranty
• Free International Shipping
• Free prong tightening, repolishing, rhodium plating and cleaning every 6 months
• Provide insurance appraisals
• One free resizing within 60 days of purchase
• Free ring inscriptions
• Best-in-class high quality imagery of all diamonds in stock
• 24/7 Customer Service
• Best-in-class packaging

Blue Nile Blue Nile is the largest and most well-known internet jewelry seller. They have a very large exclusive online inventory. Their high-quality images are catching up to James Allens' and their prices are amazing. Right now, Blue Nile offers up to 40% savings on jewelry during a limited-time sale.

Click to Visit

What we love about them:

• No questions asked returns within 30 days of shipment. Blue Nile will send you a paid shipping label to return the ring.
• Lifetime Warranty
• Free Shipping
• Free prong tightening, repolishing, rhodium plating and cleaning every 6 months
• Provide insurance appraisal
• One free resizing within the first year of purchase
• High quality images of about half of their diamonds
• 24/7 Customer Service
• 100% credit towards future upgrades (must be at least double in value)
• Best in class fulfillment

About the author

Mike Fried Mike Fried has over 25 years experience in the diamond industry working with Leo Schachter Diamonds, Moshe Namdar Diamonds, and joining The Diamond Pro in 2007. He is recognized as an industry expert and has been quoted in publications such as Us, People, Page Six, The Next Web and more.