Hello!

I've been here last year when I've just discovered fancy coloured diamonds  

My fiance and I managed to find a lovely stone in the colour we wanted (it's brownish-orangy-pink, sort of like a salmon, nude  ) and bought it from a reputable dealer (0.30ct, modified rectangular brilliant-cut with GIA cert of course). We talked to him about the setting: simple 4 claws, 18ct rose gold, size 5.5 and he told us it would be about £500.
We didn't have enough money to go for it straightaway so said we'll be back - that was in October 2010.
Now, we came back to set the diamond and he said it would be £970   basically double the price!
To be honest, I think he offered us this price because he noticed how excited we were to finally set our stone, after waiting for so long...But he said that it's because of the VAT increase (2.5% since last year...) and the price of gold is higher and that it's bespoke etc., etc.

Well, we're not specialists but it's a MASSIVE difference and we're both students   we're thinking of taking the stone to get it set with another jeweller - is it a good idea? what should we do, since he's not very willing to negotiate the price...

Well, part of the increase is certainly justified... but it should be only about 15% based on the price of gold, VAT increase and inflation (there are labour and energy costs as well as the metal), not 100%.

One thing that I wonder is whether - had you gone ahead with a "proper" estimate in October - it would really have come to £500. It sounds relatively cheap for a custom setting in the UK, no matter how simple. Of course if it's a pre-fabricated setting done on a large production run, it makes more sense, but we'd need more detail than you have disclosed (or even than you have at all) to understand whether the price made sense in the first place.

The most significant benefit of having everything from one place is that there is clear responsibility for any problems - unlikely though they are - if the stone or the ring are lost or damaged during work. Until you have paid in full, you can argue, the goods are the jeweller's property and should be covered by his insurance or liability. Another benefit (typically) is that you can negotiate a little more by giving the merchant a little more margin.

However, by splitting the transaction as you have (and leaving 6 months in between the two parts) you have broken the psychological link between one sale and the other one, and the vendor is treating them as separate: does he want to go to a lot of trouble for less than a grand (and in fact probably £200 in margin)? Probably not. We can argue it's short-sighted, it's not very polite to break one's word, it's downright wrong, but that's what I think is happening.

At least getting a quote from someone else is probably worth it, if only to go back and negotiate from a position of greater strength (or at least market knowledge). I'm sure David could do an excellent job on setting the stone, but I don't know that it's worth your time, expense and VAT to ship things to the US and back, however with the USD so weak it may be worth a chance. Call David and explain the situation.

Mass production isn't necessarily bad - and hand made/custom made isn't necessarily good. This applies to your current jeweller as well as any other supplier you may consider. There are some very expensive settings that are what I would call "mass produced", but still manage very very high standards of quality. And if you look at the "fugly" thread on this forum, there's plenty of hand made stuff there.

I suggest you talk to a couple of other people and see what you get - if others are giving you quotes of (say) £500-600-700, you can easily go back to "your" guy and say "We'd rather have you do it; you quoted £500 for the job six months ago, and we understand prices have gone up (all told) by about 20%, as per a couple of competitive quotes we have. If you are happy to do it for £600 (or whatever), we would be very happy to work with you." If in the process you find somebody who is delightful to work with and fits your price criteria, bring it to them directly; if your jeweller feels he has no "contract" with you to honour his prior estimate, I don't see why you should feel bound to your word that he would be the one to do the work.