Is your 1.25 ct certified by GIA or AGS? If not, then there is no way of telling if the diamond is truly I color, VS1 clarity. Furthermore, do you know about the cut parameters/spec (GIA Excellent or AGS ideal)? Without this information, there is no telling about the true worth of your diamond. If the color and clarity are off, and the cut is not ideal, it will be very difficult to sell your diamond on your own and be able to recover most of your money. In that case, then you are better off trading in your diamond, if and only if your jeweler can find you an ideal cut diamond at a fair price. Chances are that your jeweler may charge you a lot for the new diamond.
For your information, here are the current prices for ideal cut (GIA Excellent or AGS 0 ideal) diamonds.
1.21 I VS1 $9441
1.23 I VS1 $8900
About $8000 if cut is slightly less ideal.
1.51 I VS2 $13,554
1.53 I VS2 $13,920
About $11,000-$12,600 if cut is slightly less ideal.
If you paid $7990 plus tax for something less ideal or non-GIA/AGS certified diamond, then you most likely overpaid for your diamond. If this is the case, don't frown, because most of us (including me) had the same experience. Moving forward, we just need to make sure that we do it right on our next purchase (which usually means higher price and thus more important).
By the way, the diameter is 6.8mm for an ideal 1.25 ct and 7.4mm for an ideal 1.50 ct. If you really want to have a 2-ct diamond eventually, it is better to wait and not take little steps. Reason is that these little steps (e.g., new setting) cost money, which can better be used towards your ultimate diamond.