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You’re looking at the issue through the disclosed lens of someone who has been through a relationship breakdown.It's either a place-holder or a loaner. An engagement ring should absolutely be returned if the wedding never happens. Strangely I don't feel the same about wedding rings. After the divorce it's a memento, though I don't see why anyone would want to keep it. I sold mine for peanuts at a jewellery hock shop in Melbourne.
But a broken engagement - there's no we-tried-our-best in that. Give the ring back and walk away.
I personally think that there is way more too it. Surely there are milestones and situational attribution that needs to be taken into account ?