By educating yourself about how diamonds are graded and priced, you’ll more easily know how to get the best bling for your buck. By demonstrating you know what you’re doing, you’ll better protect yourself against a dishonest dealer.

Wholesale diamond prices—for both mined and lab-grown stones—are largely determined by size and grades for cut, carat, color, and clarity (“The Four Cs”). For example, the diamond-pricing Rapaport Price List reports the price for a “perfect” internally flawless, colorless diamond as nearly four times the cost of a nearly colorless one with slight flaws invisible to a naked eye. But for those of us who don’t hang out with loupe-equipped jewelers, the less pricey stone would work just as well. When shopping, pay attention to the Four Cs, but don’t assume better grades are worth higher price tags: You’ll find you can spend a lot more money for a higher-grade stone when a lower-grade one will do.

Cut

A diamond’s shape merely describes its geometry, such as the traditional round, square, rectangular, and emerald, plus trendy or novelty shapes like Asscher cut, cushion, and heart. Cut describes the interaction of several attributes, including angles, dimensions, and symmetry, all of which influence how well the diamond reflects light (aka “sparkle factor”). A skilled gem cutter can maximize brilliance and improve brightness.

The Gemological Institute of America (GIA) grades only round brilliant diamonds for cut. Because cut has the biggest effect on a diamond’s appearance, when shopping for a round brilliant stick to diamonds with excellent cut. You’ll pay more, but you’ll get a noticeably better product.

The GIA offers the most meaningful measures of cut, with five grades from excellent to poor. They’re assigned based on factors including brightness, fire, polish, and more. Some retailers try to pass off shape attributes as measures of cut; be very wary of outlets that don’t readily supply detailed information about how they judge and grade cut. Some retailers create their own grades, such as “Super Ideal” or “Signature.” Typically, these descriptions are given to diamonds that would fall into the upper end of the GIA grading categories, but you can’t count on it.

Carat

Diamonds are weighed in carats, with one carat equaling 200 milligrams, or 100 “points.”

Because there’s higher demand for larger stones than small ones, and because large gems are rarer than small ones, weight has a disproportionate impact on price—for mined stones, a three-carat one might be priced six times higher than a similar 1.5-carat one, rather than simply double the price.

Popular weights also affect pricing. Because many shoppers tell stores they want diamonds with minimum weights that are often round numbers (say, one carat), a stone that weighs 1.05 carats will cost disproportionately more than one that weighs 0.98 carats. So consider shopping for diamonds that weigh a bit less than popular one-third-, one-half-, one-, and two-carat sizes.

Because many diamonds are cut to maximize weight (and price) at the expense of cut, be wary of stones that are cut exactly at one-tenth of a carat mark. Also be wary of diamonds that weigh in at 1.01 and 2.01 marks.

If you want a bigger-looking diamond on a smaller budget, consider shapes other than round. Shapes with elongated dimensions can create an illusion of a larger diamond, particularly marquises, pears, and ovals. They’re less expensive, per carat, than the most-popular rounds.

Color

A diamond’s color is rated from D to Z, with D representing absence of color, the most valuable grade. Diamonds graded E and F are also described as colorless, while G- through J-grade stones are considered nearly colorless. K through M have faint color, N through R have very light color, and S through Z have light color.

Mined diamonds can earn grades beyond Z; these stones are considered “fancy” colors. Yellow and brown are the most common fancy colors, and therefore the least expensive. Red, blue, and green hues (especially deeply saturated ones) are very rare and very expensive. Lab-grown diamonds can be treated to take on various hues.

For diamonds ranked a few grades apart—say, a D stone and an F stone—it’s nearly impossible to discern color differences with the naked eye or even side-by-side with a jeweler’s loupe. But you will see big price spreads, especially when comparing high-quality stones. For one-carat, internally flawless mined stones, diamonds rated as D color typically cost two-thirds more than Fs; for stones with many imperfections, the price difference is about 15 percent.

If you’re buying a single diamond for an engagement ring, it doesn’t make much sense to purchase one with a grade higher than F. In the store, under perfect lighting, you might (but might not) see that a D or E stone is brighter than an F. But in the outside world, no one will suss out the difference, so it’s not worth paying up to two-thirds more. For earrings and other types of jewelry, color grade is even less important.

When evaluating color grades, also consider the setting. With a yellow gold or rose gold setting, opting for a less expensive color grade makes even more sense because these metals’ hues mask slightly yellow diamonds better than platinum or white gold do.

Clarity

Clarity describes inclusions and blemishes within and on the surface of the diamond—black specks, chips, cloudy areas, and fine (or not so fine) lines trapped within the stone. Diamonds are sorted into 11 different clarity grades, ranging from “Flawless” to “Included,” with several categories for “Slightly Included.” The categories are Flawless (FL), Internally Flawless (IF), Very Very Slightly Included (VVS1 and VVS2), Very Slightly Included (VS1 and VS2), Slightly Included (SI1 and SI2), and Included (I1, I2, and I3).

In general, clarity flaws aren’t visible to the naked eye until the level of I1. But, as with color, even though you can’t tell the difference between a lower- and higher-graded diamond, price differences are huge. For a one-carat mined diamond, the difference between an SI1 and VS1 G-colored gem is usually about 25 percent, or roughly $1,800. Pay the higher price and you’ve shelled out for a difference you can’t see. One jeweler we spoke with said he would never personally purchase a diamond with a clarity level higher than slightly included (SI1 or SI2)—he called it a big waste of money.