JewelerProfit tip-Could you afford to write a check for $100,000?
Could you afford to write a check from your checkbook RIGHT NOW for
$100,000? With nothing in return?
By now you probably now I'm outspoken and I can defend myself very
well. There are only a few things I have a tussle with when speaking
to store owners and it concerns customer's values of their jewelry
while it's in your store in a job envelope.
I'd say over 75% of you DO NOT give the customer a receipt with a
stated value and description. You think it's too much work and you
"don't want to give out free appraisals." Many of you think you're
saving yourself by writing on the receipt "yellow metal, white stone"
and no value or value is $75.00 or less. "Hey, they signed it!".
"Look here, David. We can't be expected to know what every
customer's jewelry is, whether it's real or not. We're busy."
Funny, you wouldn't let a supplier sell you goods that you didn't
expect first, would you? You're supposed to be an expert in the
jewelry business, so be one.
The reason I asked you if you could write a check for $100,000.00
with nothing in return is I just spoke to a jeweler who did. He had a
loss and it came out of his pocket (no this is not the jeweler I
spoke of 2 weeks ago-update to follow).
I just hung up with a jeweler who was burglarized (seems like they
all call me). He had a dial up burglar alarm, a backup cellular
phone, TL-30 safe and insurance. They came in from the roof, cut a
hole, disarmed the phone lines and then disarmed the cellular backup.
In addition, destroyed the bell so when it did go off, it didn't make
any noise. They were professionals.
Then they used a laser torch of some type and opened the safe. All
undetected in the dark of night. Took $325,000.00 that was in the
safe of inventory.
They also took all 100 job envelopes-customers jewelry.
The jeweler was reimbursed for the inventory-dollar for dollar. He
had a point of sale program with each piece listed.
He was under covered for customer's jewelry. Why? He NEVER ASKED the
customer they value.
He had to pay $100,000 out of his pocket. In his words "Thank
goodness we are a strong company, otherwise it would have put me out
of business." This store does about a million a year in volume.
If you do a million, could you write a bunch of checks that add up
to $100,000.00 just because?
See if this sounds like you. He USED to use the coin envelopes with
the numbered stub on top that is given to the customer. No
description at all and of course no value.
Phew! That's an easy way, isn't it?
And it cost him, out of pocket $100,000.00! Guess what? That was
only 100 job envelopes.
Now he does EXACTLY as we had done and I have been preaching for
1. He bought from Impact Specialties (they sell my job envelopes and
our designer forms (800) 543-4264 or www.isiprint.com
three part job
2. He fills in the description of every item in the envelope.
3. He gets a value from the customer, OR corrects the one the
customer states if it's too crazy, OR he tells the customer what its
4. The customer gets one copy.
5. The other copy is REMOVED for safe keeping and placed someplace
Leaving the envelope, with and jewelry inside. Now he
knows the values in the store, periodically adds them up so he can
tell the insurance company how much to insure his customers jewelry
for while in his possession.
This is exactly what we did (thank goodness we never had a problem).
On any given day we had 450 jobs in house. I was petrified of the day
we would have a robbery or burglary and I had to face FOUR HUNDRED
AND FIFTY Mrs. Smiths and Mrs. Schwartz's about their lost jewelry,
much less not having money to pay for it. By the way, the insurance
company doesn't give you a profit on replacing their jewelry and
guess what else? If Mrs. Smith gave you the ring to have a new shank,
you lost THAT INCOME TOO.
He found what I found. On the AVERAGE you can figure each envelope
was worth $1000. We insured customer's jewelry for $450,000 all year
long with an additional $150,000 at Christmas as we remade a lot of
customer's jewelry for presents.
In addition to buying coverage for our customer's jewelry, we bought
an additional amount to cover customer's jewelry OR OUR goods while
out of the store that we sent to a vendor.
I knew one store doing $350,000 in business that had the same thing
occur. He under insured customer's jewelry by $150,000 because he
didn't get values either. Unlike this fellow, only took him 2 years
to declare bankruptcy.
There's a 2 store chain I know (can't tell you who) that does over
25 million in sales. One store was held up at gun point before
opening and the safe was emptied. They had under estimated customer's
jewelry for over ONE MILLION DOLLARS. They could afford it.
They now ask for customer's value with signatures.
I want you to train the staff to start getting values. Not next
week, not after Christmas but NOW.
Here's how. After writing it all up, ask this question just this
"What value shall I put on your jewelry while we have it in our
Notice I didn't ask what's it worth? (The only come back from the
customer would be 'I don't know, what do you think?') "What value
shall I put on your jewelry while we have it in our store" gets you a
more direct response. If they say "I don't know", it's either
1. They don't know, or 2. They want to see what you think.
If they don't know, ask "Do you have it covered under your
homeowner's policy or have an appraisal?" or maybe "Do you remember
what you paid for it?"
If they say "What do you think?" come back with:
"We're not trying to do an appraisal, just having values for our
insurance coverage. Do you remember what it cost you?" See how I went
past the question?
If all else fails "Well, in our store this type of item is tagged
for around $900, I'll put that down if it's O.K." Most times it will
You're not trying to be precise. You just need "close is good
enough". The customer is not going to TAKE YOU. Even if they did,
could they get you for $100,000? Don't think so.
What if they have a 3/4 carat round, J, SI2 and tell you $15,000?
Briefly educate them about what it sells for in your store. If they
don't back down I've told people politely "We are responsible for
theft while in our possession but that amount is way beyond what we
deem necessary. We'll have to decline working on your ring, I'm so
sorry." That usually solves it.
We'd do almost 9000 jobs a year and probably didn't have 6 problems
a year with this procedure.
So start getting descriptions and values keep receipts separate from
job envelopes and add the values up 4 times a year.
This is one area you probably have a slim chance of having big
problems (burglary or robbery) but if it happens, this are could wipe