This refers to the number, position and size of the inclusions that occur naturally inside diamonds. The fewer and less obvious the inclusions, the more valuable the diamond. Here is an illustration that shows the clarity grading scale that has been established by the world's foremost authority on diamonds, the Gemological Institute of America (GIA). Note: Diamonds are shown under 10X magnification):

It is these inclusions or blemishes that give each diamond its own unique fingerprint, making your particular diamond truly yours. In fact, the independent grading report that comes with every diamond we sell will show a diagram indicting any characteristic your diamond, indicating any blemishes your diamond may have, as well as their location. The most important thing to remember when it comes to clarity is that a diamond's inclusions should not be noticeable to the naked eye, nor should they be so excessive that they affect the diamond's durability.

A diamond's ability to refract and reflect light is what makes it so brilliant and so valuable. The way it does this is by allowing light to enter the top of the stone, reflect off the facets that have been cut by a diamond craftsman, and reflect out the top of the stone to your eye. So, the fewer obstacles to this pathway there are, the greater the diamond's clarity will be, which increases the diamond's value (all other characteristics being equal).

Most diamonds contain some blemishes (crystals, clouds, or feathers), which can be found inside the stone (called inclusions). Surface blemishes are not considered a major concern, since they can often be polished away. Crystals are mineral deposits trapped inside the diamond; clouds are small specks or hazy areas that give a milky appearance; and feathers are small cracks that are shaped like a bird's feather.

Naturally, inclusions that don't impede the light's passage through the diamond or visibly decrease its beauty will not have a substantial effect on its value. It is more important that any blemishes do not affect the stone's attractiveness or durability, than that the diamond be 'perfect'.

A diamond's clarity is measured using a jeweler's loupe (a small magnifying glass used to view gemstones) under 10-power magnification. The FTC requires all diamond grading be done under 10-power magnification; any inclusions not detected under this magnification are considered to be non-existent.

The bottom line

A diamond's color also has a great impact on its cost. Since ''colorlessness'' is the most sought-after trait in terms of color, diamonds that are higher up on the color scale (e.g. D, E, F) will have a greater value. If a diamond with a specific cut, clarity and carat weight is moved to the next color grade, it's possible to see a significant increase or decrease in the per-carat price--all other factors being equal. The idea is to choose a diamond that is as high on the color scale as your budget will allow, taking all 4Cs into account.