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Yes, whoever is dumped keeps the ring unless it's an heirloom.
The engagement ring represents a contract. The groom is saying to the bride, "I promise to marry you, and in the meantime here's this ring." The bride may have turned down other offers of marriage during her engagement. So if he then dumps her, she gets to keep the ring.
A friend of mine who is divorced had the stone from her engagement ring made into another piece of jewelry.
The couple must also return any wedding gifts they might have received if they split up. This is why you shouldn't use any of your wedding gifts until after the wedding.
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