Custom order gone bad

Jewelry Discussion
21

I know personally when we are checking out a business, no matter the
size, we look to see if they are BBB rated. A lot has to do with
perception and if potential clients see that (a) you have gone to
the time and expense to join BBB (and if you are online there is an
extra charge for their online rating but you get their logo and link
to your rating for your website…which we use) (b) you have a good
rating…it further legitimizes you.

It is one of those difficult things to know: how many potential
customers did you lose because you aren’t a BBB member, how many did
you get because of it and how many it didn’t make any difference.

Terry Binnion

22 
they said that I'd be rated and then people would be reassured
that I was on the level. I told them I was a tiny business and
didn't think it applied to me. I always thought it sounded like a
waste of $$$.

Well, Amery - and all - it’s only important if you think it’s
important. I receive almost no tangible benefit from being a member,
and yet I am. Somebody else mentioned the Chamber of Commerce,
saying it also is worthless. That’s not for me, but I know people
who are members, here.

I’ve been in this location since 1983 - 27 years. I’ve had dealings
with judges, district attorneys, movie stars, rockstars, pro sports
players… The reasons for joining the BBB are much the same as
the reasons for joining the Lion’s Club, the Shriners, the Masons,
the Commonwealth Club - to be a part of the community and to have a
higher credibility. And that’s especially when someone wants to buy
a $30,000 piece of jewelry. When I point people to my BBB sign over
my desk, I’m saying, “Look, I put myself out there for all to see -
that’s my reputation and I’m willing to take what people dish out,
and you can see for yourself, too.”

There was a time when I would have scoffed at the idea, too. But we
are established and known, and in some ways it’s like James Miller
signing with his goldsmithing credentials. “We are here, we earned
it, we care.” It’s not a direct benefit, and it’s not for everybody,
but it’s just another brick in having a presence in your business. I
wouldn’t say anyone working in their basement should bother with it,
but we’re located more like 5th Avenue in NY is (but upstairs). It
all matters.

23

After I was contacted by the caller whom I thought was the local
BBB, I did indeed check them out. Called their local organization,
the person who contacted me and relayed the bogus complaints was
indeed an employee doing recruiting.

We also joined our local Chamber of Commerce that first year. They
offered a lot of classes and seminars, and we thought it might help
us. We did attend a few and found them beneficial. However, we began
to realize that after we joined, the number of telemarketing calls we
received per day shot dramatically upward. Out of those calls (50
per day on average) roughly half on average were from people who said
they were calling on behalf of the Chamber. When we did not renew
(they doubled our dues year 2), the number of telemarketing calls
went to an average of 2-3 per day…we are a 2 person shop and we
really don’t have time to spend answering the phone for no good
reason! I wrote them a letter asking them why they were selling their
member list, and their response was that it was a legitimate way to
build revenue. Their membership documents stated throughout at that
time that they did not sell their lists… I then looked carefully at
how the US Chamber does not appear to support the little guy in their
lobbying efforts and that further cemented my decision.

We choose not to waste our money with either organization. All it
gets you is a ery expensive sticker to place on your store window.

24

Jennifer, Neil speaks very good advice. Sometimes it’s best to cut
your losses and be done with it, even when you are absolutely,
positively, got-it-on-video right. The sleepless nights, the ball of
butterflies in your stomach every time the phone rings, the constant
escalations, life’s just too short for me to even consider going
through that junk again. If you have the piece and you sold it once,
you’ll likely sell it again. She’s not ever going to take it now, at
least she’s not ever going to pay you anything more, unless it’s
because of a court order. If that happens, you can just endorse her
check over to your attorney on your way to the post office to send
her the necklace. Then you can rest peacefully in the knowledge you
were proven right, but you won’t have the money OR the necklace!

You will never get any goodwill from her ever again, and she’ll
never admit to any fault on her part. Not ever. If you let it go to
court, there’s no guarantee you will win, in fact if you still have
the necklace, your odds are probably pretty slim for the reasons Neil
listed. Courts seem to side with consumers a lot more often than not.
In any event, the lawyers tend to be the only real winners in such
cases, they get paid no matter how it’s decided. So why spend any
more time and energy on her? We only get so many heartbeats when we
are born. Don’t waste another single one of your beats on her. OK,
maybe a couple more high-speed ones as you write and mail the refund
check, but let those be the last.

I look at losses like this as paying tuition to the University of
Hard Knocks. But in this case, you really won’t have a loss, only a
longer time to wait to collect for your work than you bargained for.
Pretty cheap tuition for a very valuable lesson if you ask me. Soon
you’ll be a member of the UHK Alumni. They’re gonna hit you up for
dues every now and then though, and it seems the required concurrent
and refresher training never entirely stops. Just do your best to
avoid repeating courses.

Dave Phelps

25 
I will not be selling it at full price, but discounting the amount
I was already paid. My conscience is too strong and loud for me to
be able to sleep at night after pulling something like that

Would someone explain just why it is unethical to sell the piece for
it’s full price? If the piece was in fact worth the original price,
is it not still worth that price? If I come across an old ring with
a five carat Kashmir sapphire in a box full of junk jewelry at a
garage sale and buy it for $3.00, am I morally obligated to sell it
for, say $10.00 and no more? As long as my acquisition of an item
was legal, am I morally limited in my asking price if I choose to
sell it?

I believe that in the case in question here, the maker has incurred
a legitimate windfall profit situation. She wins both ways. If she
sells it at full value she reaps a profit premium. If she chooses to
sell at the original price less the deposit, she, theoretically at
least, can make a quick sale.

In the first case she is rewarded for the aggravation of having the
sale fall through. In the second she has put the deal behind her,
realizing the full profit and moved on. What say you?

Jerry in Kodiak

26 
Since I was paid half for the piece, I will not be selling it at
full price, but discounting the amount I was already paid.

I disagree with this, you should sell the piece for the full price.
Several reasons, 1 in my mind you owe the woman something, she may
call one day and want something at the price of the down payment, 2
you sell the piece for a lower price and then the buyers friend
calls and wants one and you charge twice the price, even with an
explanation she will be upset. 3 when you sell it at full price you
can send the old customers down payment back to be totally through
with her and cut off any further problems.

Bill Wismar

27

The non-refundable deposit on this custom order was a partial
payment towards the time and labor invested by the maker to create a
specific item for a specific customer.

The original client abandoned the commission, did not take delivery
of the object, and did not pay the remaining agreed upon balance due.
In this case, since the transaction was not completed, the client
forfeited the non refundable deposit.

The maker still owns the piece outright and is entitled to sell it
at full price to anyone they want. The non-refundable deposit is
compensation for the time and aggravation spent with the first
client.

This is a perfect example of why custom orders should require a
non-refundable deposit. 50% is reasonable and standard, although I
know a few makers who require payment in full in advance on all
special orders and commisions.

Michael David Sturlin
http://michaelsturlinstudio.ganoksin.com/blogs/

28 
Since I was paid half for the piece, I will not be selling it at
full price, but discounting the amount I was already paid.

If I follow this logic, consider this. I had my house up for sale
and the sale fell through. The buyer forfeited the earnest money
deposit. When I relist the house for sale, should I lower the asking
price by the amount of the earnest money that I received? That’s not
my plan. The earnest money is to compensate me for taking my house
off the market, my risk, etc. When I eventually sell my house, it
may be for more money or for less money than the original deal.
That’s my risk.

Jamie

29

the house on the market is a good thing to compare it to. i think
that you should NEVER sell the item for half because of some person
that didnt follow through, you even have terms for this very reason,
that its not refundable. lying about you to people and the bbb and
stuff, is rediculous, and should make u even more so want to sell
that same piece for FULL PRICE.

30

I just read over the thread on this.

yes there’s no reason to not sell it to a customer at your full
retail. The defaulted deposit pays for your time, effort and the
possibility that it doesn’t sell.

You are in RETAIL and in retail jewelry stores you have ONLY ONE
YEAR to sell it to make a profit. One year.

There’s a great chance this ring was loved by ONE PERSON and could
be harder to sell.

I’d put it in the case to sell at full price, if you get a bite on
it and its about “price”, tell them the store of the defaulted
deposit and if they buy it, you can give them the deposit as a
discount to sweeten the deal.

You have 1 year, that’s all. Monitor it.

I know people will post to the contrary but would you work for me
for $150,000 a year?

Good. I pay every June 30th. Now?

Lets say you do and next June 28th I tell you "Been a rough year,
can we delay your pay for… …just one MORE year?

lets say you say OK. Then next June 30th I say

“Great year because of your hard work. Thanks, here’s your
$150,000.”

Expecting $300,000 were you? Yeah, you want to COLLECT $150,000 a
year, even if its not PAID every year.

Same with jewelry. A $1000 ring that gives you $500 in profit should
pay $500 in profit every year.

Wait 2 years to sell it should pay $1500:

$500 was original cost
$500 was year one’s profit
and another $500 for year 2 profit

Total to collect after 2 years = $1500.

So I wouldn’t discount it right away because of the defaulted
deposit but use it as leverage.

David Geller
(404) 255-9565
www.JewelerProfit.com
Repair Pricing Gudie

31 
I believe that in the case in question here, the maker has
incurred a legitimate windfall profit situation. She wins both
ways. If she sells it at full value she reaps a profit premium. If
she chooses to sell at the original price less the deposit, she,
theoretically at least, can make a quick sale. In the first case she
is rewarded for the aggravation of having the sale fall through. In
the second she has put the deal behind her, realizing the full
profit and moved on. What say you?

I say you are absolutely right. If someone is going to have any
benefit from this very unpleasant situation, it should be the creator
of the piece, not the random customer who gets lucky then expects an
equally good deal every subsequent visit.

Noel

32 
Would someone explain just why it is unethical to sell the piece
for it's full price?

My original ethics reference should be taken in its context…that
of a court action if it got that far (my “legal implication” remark).
Courts settle contract matters based on money damages not on
righteous indignation. If the piece is resold, where are the damages?
It could also be argued that the piece was the stock and trade of the
maker, since the exact piece had been previously made by the same
jeweler FOR STOCK. Consumers are favored by the courts when there
isn’t a clear cut, well conceived contract. In this hypothetical
resell case the customer is out $XXX but the merchant has already
been made whole. In that case which one has suffered the damages? It
all depends on who sues who, though.

IMHO and in no way a legal opinion, just a layman who’s been around,
won here, lost there… the statement on the receipt that the deposit
is non refundable is too broad. Without specific language defining
the circumstances under which it is and is not refundable, I think it
would not survive challenge. I think language such as ‘liquidated
damages for non performance by purchaser blah blah blah’ might be the
kind of thing you need in your contract.

By literal interpretation the deposit becomes non refundable the
instant the customer signs. If she changes her mind 2 seconds after
signing could the maker legitimately keep the deposit for damages if
no damages are suffered?

At this point yes the maker has suffered damage. BUT, where are
‘damages’ defined?. The contract should spell out what happens when
where and if. It seems that there was no written contract at all, how
can you enforce that?

My contention is that you shoot yourself in the foot by reselling
the piece when there exists the possibility of ‘proceedings’. I did
not mean to imply nor did I say that reselling it was unethical in
itself…but one’s ethics are subject to review if it goes to court.
(think a minute on this scenario…customer doesn’t conclude deal,
you sell piece, it goes to court, customer comes in with money and
get piece to avoid court but you don’t HAVE the piece cuz you sold
it. Now who owes who? Now who is nonperforming?) Which is partially
why one should avoid court in matters like this. Without iron clad
preparation, when you go to court you roll the dice. Shake em hard.
Not a smart way to run a business.

Basically what I’m saying is that you can pay a lawyer to write you
an all encompassing contract that will survive legal challenge and
pay him to enforce it or you can defuse situations before they become
big bugaboos that just maybe bite you on the behind and interrupt
your commerce and cost you more in the long run.

Hopefully this present situation will exhaust itself before anything
else happens. I know I’m exhausted.

33

I totally agree with Bill- tell her that she can have store credit
or you’ll send her back her deposit when you’ve sold it for full
price.

Actually I might knock off 10% of her deposit if you are going to
give her $$$ back when it sells. But that’s just me.

let us know what happens.

34

Again a big thank-you to all who’ve offered advice. I was surprised
at how many people felt it was perfectly reasonable to sell the piece
at the regular price, and then when I shared the feedback with my
husband I found out that’s how he felt all along. I didn’t want to be
greedy and make any extra gains off of a full price sale, thinking I
had already been paid for it in part (for some reason it feels
slightly dishonest). I don’t want the piece to be hanging around
reminding me of the entire painful story. I also wanted to balance
that with making sure I’m not lowering the value on the original
piece (by selling this one for less), which could ruin my
relationship with the customer who bought the first one.

I think it was David Geller who said to offer it at full price and
use the discount as leverage to move it quickly. Not a bad idea. I’m
reconsidering how to price this necklace, but if it drives me crazy
maybe I’ll donate the piece to a local charity fundraiser and get it
off my table.

As a side note, I gave the disgruntled customer 30 days to decide
what she wanted to do. Either way, by July 30th I’ll be done with
this scenario unless it escalates. Strangely, I haven’t heard
anything from the BBB.

Jeni