The diamond industry uses an industry-wide system of grading to inspect and evaluate individual loose diamonds. This ensures that each loose diamond is held to the same standard as the rest so consumers will have a true indication of the quality of the diamonds they want to purchase.
Not every diamond retailer will use this grading system, the ones that do will offer certified diamonds which is an indication that the diamonds they sell have indeed been graded.
Most diamonds are graded in an independent gemological laboratory. The most reputable, and widely-known diamond laboratory is the Gemological Institution of America; also known as the GIA. The grading scale they used is based on a number of different characteristics all diamonds have.
A diamond’s color is graded by comparing it other diamonds (Called a controlled group) that has already had their color determined and certified. The gemologist will make the comparison and determine the color of the diamond being grade by giving it a color grade that is the closest match to the color of the diamonds in the controlled group.
A gemologist will examine the loose diamonds, and look for inclusion and blemishes; imperfections that were naturally created in the diamonds when they were formed deep within the earth’s crust. The number of imperfections and where they are located on or within the diamond are noted. The imperfections are and then used to determine the clarity of the diamonds.
Many people falsely believe that cut refers to the shape into which a diamond is cut, but this isn’t true. Cut actually refers to the quality of the cuts made by the diamond cutter when he shaped the diamond, not the actual shape.
All diamonds have a refracting quality which means a diamond will bend or distort the light that enters into it. If the cut is a good quality cut that light will enter the diamond at the top surface, travel down into the stone where it bounces around before traveling back up and out of the top surface again. This is also what gives a diamond its dazzling sparkle.