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When Adding Diamonds to a Luxury Watch Can Decrease Its Value

Paul Altieri

Many people believe that adding diamonds or gemstones to a watch will invariably increase its value. In some cases, this is correct since the intrinsic value of the added materials will augment the value of the watch itself. However in other instances, the watch in its unaltered, all-original condition is worth far more than the material value of the added diamonds, and customizing the watch in any way actually becomes detrimental to its overall value and desirability.

Adding Diamonds
Adding Diamonds will add value to your watch, right?

Adding Diamonds: Yay or Nay?

When it comes to luxury watches, there is a big difference between factory diamonds and custom-set diamonds. Factory diamonds are placed in watches by their respective manufacturers during the production process, while custom-set diamonds are installed by a third party at a later point in time, once the watch has already left the factory.

Many luxury timepiece manufactures have their own in-house jewelers and gemologists to ensure that the precious stones used in their most premium watches are of the utmost brilliance and quality. These manufacturers produce a relatively small number of gem-set watches each year; however the watches that they do produce are near perfect in execution and only set with the finest gemstones available.

Adding Diamonds
Diamonds by Rolex are nearly perfect.

Quality vs Quantity

A huge range in quality and execution exists among watches with custom-set diamonds, since the gemstones could have been added by virtually any entity after the watch was initially manufactured. A world-renowned luxury watch manufacturer is not likely to use sub-par gems in their own top-of-the-line timepiece; however a local jeweler might very well use economy-class diamonds to meet the needs of a customer with a tight budget.

Wrong Watch

Beyond the quality of the actual gemstones themselves, there is still the issue of originality and factory-intended condition that can affect the prices of diamond-set watches. In the same way that a serious collector would rather have an entirely original, completely unpolished, a vintage Rolex Submariner than one that had been fully restored, a diamond-set Rolex is only of additional value to the purist collector if it was Rolex who supplied and set the diamonds.

Adding Diamonds
If you were to add diamonds to this vintage Red Submariner, it would reduce its value.

In some extreme cases, custom-set diamonds can actually detract from the overall value of a watch. If someone were to alter the original dial and bezel of a vintage Rolex Daytona by setting it with a slew of poor quality, low-carat diamonds, the end result would be a timepiece that was worth significantly less than what it was before the modifications had ever taken place.

Additionally, customizing or modifying a new Rolex watch will void its factory warranty, and in certain cases, make it ineligible for future factory services to be performed – unless the watch is also restored to its original, manufacturer-intended condition. While this is completely irrelevant to some Rolex owners, it can be of significant importance to others, especially if their watch was recently purchased and still has multiple years left on its warranty period.

adding diamonds Rolex Submariner 116613 ceramic serti
All of the diamonds that Rolex uses are of the highest quality.

Lastly, one additional matter regarding diamonds on a luxury watch that should be addressed is when a component with genuine, factory-set stones is installed on a luxury watch from the same manufacturer that was originally never intended to have that component. For some watches, this might be virtually impossible to tell whether or not the genuine diamond-set component was a later addition; however for other watches like Rolex, a quick check of the reference number will reveal that the watch was never intended to have that gem-set part.

For example, if someone has a genuine Rolex diamond bezel installed on their two-tone Datejust ref. 126233, the watch may still consist of 100% genuine Rolex components; however it will still be immediately obvious that the diamond bezel was not originally fitted to that watch. The first ‘3’ in the ‘126233’ reference number corresponds to a fluted bezel. If the same two-tone Datejust was manufactured with a diamond bezel, that first ‘3’ would instead be an ‘8’ in its reference number. Rolex Service Centers are known for taking issue with modifications/additions to their watches, and often require owners to restore their watches to the original factory-intended configuration (at the owners expense) as part of the terms and conditions of service.

Diamonds in a luxury watch are a great way to elevate an already premium product to an entirely new level of opulence and exclusivity. However not all diamonds are created equal, and in certain instances, improving your luxury watch can actually decrease the overall value and desirability of the timepiece.

Adding Diamonds
Do you think this is from Rolex or was this customized by a third party?

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Paul Altieri