On average, Australian couples will spend around $5000 on an engagement ring, but it's nearly impossible for most of us to judge the real value of a diamond. For example, hard-to-detect artificial treatments and small variations make a huge difference to its value.

If you want to be sure that you pick the perfect stone and don't end up with dodgy costume jewellery, there are a few things to keep in mind when you go shopping for your bling.

Buying advice

When you're choosing a diamond – especially if it's for something special like an engagement ring or wedding band – it pays to keep the following advice in mind:

  • Look for jewellers that are members of the Jewellers Association of Australia and/or Diamond Guild Australia — both have a code of ethics committing members to ethical selling practices.
  • Ask questions — a good jeweller will spend some time with you and help you find a diamond you like that's in your price range.
  • Specifically ask if the diamond has been treated and what the ramifications of the treatment are.
  • Make sure you can examine the diamond in good light.
  • If you're looking for a diamond of 0.5 carat or more, ask for a grading certificate from an independent laboratory.
  • Shop around — different stores sometimes price similar stones very differently.
  • Once you pay a deposit, ask for a detailed receipt describing the characteristics of the diamond and any associated piece of jewellery.
  • Get a valuation certificate from a valuer registered with the National Council of Jewellery Valuers.

Dodgy diamonds

Take your business elsewhere if:

  • the salesperson tells you you're getting a huge discount on the stated value of the stone
  • their prices are just too cheap to be true, and no reliable certification is available
  • what's promised in advertising material isn't available in the shop.

Did someone die for your diamond?

The 2006 movie Blood Diamond drew attention to the role diamonds have played in human rights abuses and wars. 'Conflict diamonds' were sold to help fund wars in Sierra Leone, Angola and the Democratic Republic of Congo, which killed an estimated 3.7 million people. Today, conflict diamonds from Liberia and rebel-held areas in Cote d'Ivoire are still finding their way to the international diamond market.

In 2003, an international certification scheme called the Kimberly Process was launched to end the trade in conflict diamonds, and fortunately for Aussie consumers, Australia does participate in the scheme. Ask your jeweller for details and for a copy of their company's policy on conflict diamonds before you buy a single carat from them — any jeweller worth their salt can guarantee their diamonds are conflict-free.

Fair trade diamonds

Exploitation of workers and local communities in the precious stone industry is also rife, and a very contentious issue surrounding diamonds in particular. Diamond miners can often be paid only around US$1 per day for doing a job that is backbreaking and which can be incredibly dangerous.

Fair trade standards are in development, and if you agree that it's high time profits from diamonds filtered down to workers in countries they've helped devastate, you should keep an eye out for fair trade diamonds.

The four Cs

You may have already heard of it, especially if you've already started looking for an engagement ring, but there's a set of standards that can help you determine the value of a diamond before you buy it, which is called the four Cs.

Carat

One carat equals 0.2g and is subdivided into 100 points. However, small weight differences undetectable to the eye (between 0.99 carat and 1 carat or 0.74 and 0.75 carat, for example) can make a large difference to the stone's value.

Weight isn't the only factor, though. Depending on its quality, a smaller high-quality diamond may be worth more than a larger one of lesser quality.

Cut

Diamonds are available in all kinds of cuts — brilliant (round), marquise (pointed oval) and princess (square) cuts are just three possibilities, and refer to the shape that the raw diamond has been cut into. Look at examples and decide which you prefer, or which will best suit the finger set to be sporting the sparkle. The better the standard of the cut and quality of the finish, the better the brilliance and fire (brightness and sparkle) of the diamond.

Clarity

Diamonds were formed millions of years ago through pressure and heat, so most contain imperfections or foreign material like other stones or minerals called inclusions. A diamond's clarity grading tells you if inclusions are present. There are different grading systems, usually ranging from flawless (loupe-clear) to a small inclusion only seen through a 10x loupe (VS1), right through to those visible to the naked eye (I3 or P3).

Obviously, the fewer inclusions, the higher the grading and the more expensive the stone.

Colour

A perfect diamond is colourless, but most have a hint of yellow or even brown in them, which results in a lower grading ranging from D (exceptional white+) down to Z (tinted, usually yellow). However, very rare pink diamonds (mainly from the Argyle mine in Western Australia) and 'fancy coloured' diamonds, like canary yellow, can be very valuable.

Diamonds can be treated to improve their appearance. Treatments include artificial colouring, laser drilling to remove inclusions and fracture filling to conceal cracks. When a diamond is treated it's considered less rare and is viewed as an inferior product to a natural, untreated stone of similar specifications. Consequently it's much less valuable.

Can man-made be as good as natural?

Synthetic and even imitation diamonds are available, and while some man-made stones are just as beautiful as naturally occurring diamonds, they're of course much less valuable than the real thing. The way to make sure you're getting what you paid for is certification — sometimes called the fifth C. A grading certificate from an independent laboratory exactly describes the characteristics of the stone.

There are independent Australian laboratories, some of them recognised by the World Jewellery Confederation (CIBJO), but the best-known labs are GIA in the US and HRD in Europe. Certification is usually done before setting the stone, so if the diamond is already mounted, it'll need to be taken out.

Cost

There's a great deal of variation when it comes to the price of a diamond. How much your rock will cost you depends on the size, the cut, the origin of the diamond, whether or not it has any inclusions or irregularities, and any number of other factors. Do your research, shop around, and remember that if a deal seems too good to be true, it almost certainly is.