Have you ever been disappointed that the carat weight field of your diamond grading report only provides two numbers to the right of the decimal point? Probably not. After all, obtaining information to the extent of one hundredth of a carat should be sufficient. Just to clarify the weight issue, if a carat is 1/5 of a gram, then 0.01 carats is 0.002 grams, which is much less than the weight of a single eyelash! 0.001 carats is 0.0002 grams, which can’t even be viewed by the naked eye. Why am I exhausting you with these calculations? Well, apparently some financial experts in the diamond polishing business think that the 1/1000 of a diamond carat is very important, perhaps not aesthetically, but it can save diamond polishing companies a lot of money.

How is diamond carat weight rounded off? Well, I’ll focus on the GIA (Gemological Institute of America), which rounds down 0.001 up to 0.008 carats to 0 and rounds up 0.009 carats to 1. This means that a 0.987 carat diamond will become a 0.98 diamond, while a 0.989 carat stone will become a 0.99 diamond. Since diamond pricing is mostly based on a diamond’s grading report, this manner of rounding down carat weight obviously affects the diamond’s monetary value.

I recently read a column written by Moti Gantz, the CEO of the International Diamond Manufacturers Association (IDMA), who claims that rounding down diamond carat weight in this manner is basically throwing money away and it’s a regulation that must be changed. Gantz explains in detail that in small diamonds of 15- 20 carat points (diamond sizes that once weren’t issued by diamond grading labs, but currently are) 1/1000 of a carat is a much bigger portion of the total diamond weight than in large diamonds. He further explains that the rounding down of carat weight often puts a diamond in a lower price range. According to Gantz, the diamond industry loses about $100-135 million per year due to this rounding down regulation.

I find Gantz’s argument very convincing. After all, we all know that the difference in price per carat between a 0.99 carat diamond and a 1 carat diamond, or between a 1.49 carat and a 1.5 carat diamond is often unreasonably significant. I actually like the fact that a diamond carat is rounded down more easily than it is rounded up. It seems to me that the private customer might even come out with some extra carat points for his money this way. However, there’s no doubt that if instead of rounding down from 0.008 carats and less, diamond weight would be rounded down from 0.005 carat and less, while 0.006 and more would be rounded up, the diamond polishing industry could in fact have higher profits.

So now the big question is – Is a new carat grading policy going to be implemented in the near future? In my opinion, diamond polishing companies will probably continue to pressure diamond grading institutes in the hopes that the permissive rounding down policy will change, but the GIA will surely think long and hard before it abandons its long implemented guidelines.