What should I do if a gallery is not paying? I sent them their order
in March, sent reminder letters, called them, emailed them. First
they were surprised (“oh, you didn’t get the check yet?”), then they
promised (“the check goes out today and should be there Tuesday,
Wednesday at the latest”) and I am still waiting. Filing a claim at
the Small Claims Court is my next idea, the problem is only that I
have to file it in Philadelphia, where this Gallery is located, and I
live in California… The court appointment would then be in
Philadelphia. Is there any other way I can get my money?
When I wholesaled I always found that a personal visit (usually I
would simply sit down in the store and refuse to leave without a
check) worked wonders. Unfortunately you’re on different coasts so
it does present some problems. Perhaps you have a friend or relative
who could go in for you?
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
I am not a lawyer so do not act without consulting an attorney! That
said I can offer my 2 cents.
Reread your agreement with the gallery and make sure that the
language obligates them to pay within a specified time frame. Court
can only enforce the agreement which exist between both parties, so
the language is very important. It the language is vague, then you
definitely need a lawyer to pursue your claim under different legal
theory which may entitle you to recover you money.
If you have a solid agreement and the amount of money sufficient
to satisfy the legal threshold, because both parties reside in
different states, you can file your claim in Federal Court. Again,
attorney is required to determine validity of pursuing the action in
If amount does not warrant Federal Court attention, the gallery
may still fall under jurisdiction of California if “minimum contact
test” can be met. You would need an attorney to determine that, but
in a few words, if it can be established that gallery have some kind
of a business interest in California, than you can file a case in
jurisdiction, but probably not in a Small Claims. If they are
intentionally avoid paying you, there may be other claims which would
make it worthwhile of the attention of the Superior Court( or
whatever else it calls itself ).
If everything else fails, you can still file a case in the Small
Claims. If gallery would not show up for the proceedings, you will
win by default. You probably will not be able to collect due to the
lack of jurisdiction of California Small Claims Court over citizen(s)
of another state, but if they ever put themselves within geographical
boundaries of Small Claims jurisdiction, they may become a subject to
There may be other options available to you, so consult a competent
All of the above is for the illustration purpose only and should not
considered as a legal advice of any kind.
Go immediately to the store, retrieve your wares, ask on the spot
for a cheque. If they don’t produce it, continue on to small claims
court- unless your total is over 2500.00, in which case you’ll need
civil court…some places have magistrates that hear these matters
faster, but you’re apt to get a “bad” one, and then the justice
portion of the notion is moot…so civil court is always preferred
unless it’s a seriously backed up docket.( 3 months or more). If you
have tried everything and still no check…you need to STOP DEALING
WITH THEM ANYWAY! What did the agreement YOU HAD THEM SIGN WHEN YOU
CONSIGNED YOUR GOODS TO THEM SAY???..hmm, didn’t have one??..call
the fraud division in their town…the sheriff is ususally willing to
help collect on bad cheques…Even if you get, the sheriff’s name, USE
IT IN YOUR NEXT CALL TO THE STORE"S OWNER, and MANAGER - call both of
them. .I’m not one for dicking around when it comes to theft and
fraud…so stand up for yourself. Stop being so accomadating and
DEMAND your money via overnight wire transfer, western union before
the close of business today or, have any lawyer you know call them if
they refuse to comply with your requirements of payment
immediately…Oh, and when either of you talks with the with the
owner, and store manager, be certain to inform them of your
communications with sheriff X…even if you simply look up his
name…use it to your advantage; if they want to play low…name
dropping is right in keeping with their games…
I have had this happen to me several times and can tell you that
once they know you mean business they will most likely pay. I would
call again and speak directly with the owner. Tell her/him that you
have been more than understanding and cannot run a business this
way. Ask them what day you can expect the check in the mail and
inform them that if is not recieved by a specific date then you will
file a complaint with the Better Business Bureau…this has always
worked for me. You can also threaten to send them to a collection
agency which will really screw up their credit.
Why don’t you hire a collection agency? In your line of business you
should have one on standby.
What this gallery has done by not paying you yet is not fraud or
anything criminal. You granted them credit and late payers are part
of the game. When you grant credit you take a risk, and you assume
that risk. You’d be well served to develop a credit department, even
if its as informal as just checking references and credit ratings.
Think about joining JBT or D&B.
You’ve got quite a few galleries. What are you going to do when a
larger downturn happens and more galleries stall you? If you get too
personally involved in trying to collect by yourself, you will eat up
your physical and emotional energy that would be better spent
producing and distributing product.
It could be that this gallery is experiencing temporary cash flow
disruption from something beyond their control and are just too
embarrassed to tell you. If they would still be a good account in the
future you might think about working with them, a payment plan of
some sort. After they clear things up maybe grant future credit in
smaller portions until they show they are back in the black. If you
see they are just playing the shuffle then sever your cordial
You’re a business, think bottom line not ‘justice’.
You’re more than 90 days out from delivery of goods to them. Was
your agreement NET30, NET60, NET90 or something else?
If it was immediate payment for the goods delivered (not
consignment) or anything less than 90 days, here’s what I would do:
If you know ANY attorney, have them prepare a letter on their
letterhead indicating that the next step in the process will be to
turn the account over to a collections agency. Indicate in the letter
that they will need to also pay a late fee of $25 (for example) or a
percentage of the amount due. At this point, their payment needs to
be certified check, money order, or wire transfer. Let them know that
if resolution and restitution is not made by a certain date, you will
also begin publicizing your experience with them via trade groups
and, if necessary, in trade publications.
Contact the local BBB and see if they have any complaints against
the gallery (actually, this is something that you should have done
BEFORE accepting the order for your work, if possible - sometimes not
possible when taking orders at wholesale shows). Find out how to
register one and ask if they will contact the gallery on your behalf
to attempt to resolve the issue.
If none of the above work, see if you can find a lawyer or other
business rep in philly who will pay the gallery a personal visit on
your behalf. Call and write the gallery owner and let them know that
Mr. X or Ms Y is authorized to act on your behalf to retrieve your
work and the compensation for any works that have sold to date.
Failing that, depending on the amount of work you have there and
the value of the transaction, hop a plan to philly and deal with it
personally. If you do this and take them to small claims court, make
sure that you include your travel costs and court costs in your
Finally - for those of us in the Philly area who might be
considering dealing with this gallery, can you PRIVATELY share who it
is? (I have inquiries out right now to a bunch of philly galleries
and would dearly love to avoid a potentially costly mistake!)
I’m fairly astonished at the responses that are suggesting you offer
them the benefit of the doubt regarding their cash flow…It is not
your concern. What is your concern is having a lawyer contact them,
if not having already spoken with the owner and demanding an
overnight wire transfer, western union transfer or any of the more
common methods of having your money in your account as soon as
More astounding is that no one but myself has suggested removing your
goods from their gallery… Daniel’s brilliant advice of paying
them-in this case- a surprise visit- and not leaving /refusing to
leave without your cheque…you could pay her for her time as well as
outing the “gallery” and saving her having to deal with these
approaching criminal gallery owners /operators. That is for you two
to discuss, but a potential and swift remedy could be the outcome of
your calling and informing them that your representative is coming by
for the cheque as it has not arrived as promised, and you would
prefer it handed to a person you trust, as well as all remaining
inventory of yours from their shop. The gallery deserves no more
Whomever said this was not Fraud is absolutely wrong. Your agreement
was…for the gallery to pay for goods received -as they have failed
to do so it is a criminal act to steal from another party be it an
individual or a vendor…avoiding payment is equally reproachable in
most states and on a Parish or County level as well. Collection
agencies are generally not as effective or as swift as a call or a
letter from any lawyer or Law firm, and their fees usually
incongruous with the amount of time they take to retrieve your cash.
As far as the BBB goes, if they have no other complaints against the
gallery there is little they can or are willing to do for you in
general, unless you get a highly motivated BBB worker on the telley.
People have this illusion that a call to the BBB does more than
registering a complaint. If the company in question has no other
complaints yours BEGINS a process and only opens a file on that
Always get a gallery’s DUNS number or JBT number on the contract.
That is your primary and more effective (than he BBB ) defense
mechanism…A few bad marks in a D&B or JBT file equals their credit
ruination. Also to each of you entering into consignee status, or
branching out to retail from other forms of selling a Dun &
Bradstreet rating is worth the money, but their free DUNS number is
well worth the online submission time and is recognized throughout
the industry and in most banking, financial, and retail transacting
as well. I recommend everyone that is legally selling their wares
obtain one as quickly as you can if not in place already.
I would explain just that, once a small claim is won, the loser has
to pay all expenses, at least in Colorado. This would make them
liable for plane tickets, hotel room and rental car to pursue the
Whomever said this was not Fraud is absolutely wrong.
Then the hundreds of thousands of consumers who are 30 days late on
their car payments or credit cards have to worry about jail? Debtors
prisons were abolished long ago.
If one goes in person to collect and refuses to leave without it, be
cautioned that the store or gallery you are in is private property
and the owner ‘could’ ask the police to remove you, trespassing IS a
crime, being late is not.
Maybe I am by myself on this point but I believe in business its
usually better to keep a cool head and remain professional in
conduct. But certainly everyone is entitled to run their biz as they
If you are a jeweler it’s a good idea to belong to the JBT, the
Jeweler’s Board of Trade. The fees are $425 twice a year. You can get
credit checks on a gallery before you sell them. And then if you do
have problems getting paid they also have a claims service. Sometimes
just putting in a claim against a retailer who knows that this
will be available to others, is enough to get paid.
In criminal law, fraud is the crime or offense of deliberately
deceiving another in order to damage them - usually, to obtain
property or services unjustly. In this case, the owners received the
goods, which were provided under a COD (Cash on Delivery) agreement,
unjustly by not providing the agreed upon money in return for the
goods. They have profited from the goods being in their gallery for
several months, both in probable sales and in the intangibles of
inventory display. That’s quite a bit different from being late on a
payment on credit card debt, where the payments are negotiated to
occur over time.
The gallery is more than 30 days late and was in violation of the
terms of the agreement the moment they accepted the materials without
paying. Adding to that, they have apparently lied on at least 2
occasions regarding payment having “already been made” and “in the
Yes, it’s possible that the owners could have the police remove her
from the premises. It’s equally possible that the police will back
her in removing her work at the same time. And there’s no law against
standing outside the gallery on the public sidewalk and picketing, if
necessary. My guess is that the owners will be glad to get rid of her
and will provide her with her work and payment when faced with the
I agree that a cool head is essential in business. A firm spine is
equally essential to prevent others from taking advantage of your
good nature. We have no way of knowing, but this may represent a
significant chunk of this designer’s income for the year. It seems
appropriate to take the necessary steps to recover it… not jumping
to the “big guns” until everything else has been exhausted, but
understanding that they are there and how to use them if necessary.
I think honesty is best. Call them & ask if they are having cash
flow problems & you’d be willing to accept XXX$ a month til they paid
what they owed You. If You are willing to be flexible they might
appreciate it. I always recovered my money this way from late payers.
Fighting isn’t in my personality & this just feels right to me.
In this case, the owners received the goods, which were provided
under a COD (Cash on Delivery) agreement
I reread the original post and nowhere do I see reference to terms,
COD or otherwise. If indeed the shipment was sent COD I’d look to the
carrier, “where’s my check you pledged to collect”. The carrier was
acting as agent for the shipper, if they were negligent in fulfilling
the duties they accepted(getting the check) the carrier would
probably be liable.
Infact I just now called a nationally known carrier and they say
ultimately they WOULD be financially responsible. They have their
procedures…they try again to collect check or goods from the
receiver, if that fails the shipper would then file a COD claim
wherein the carrier would pay. all of which no doubt takes some time.
But essentially the carrier guarantees payment. The carrier would no
doubt subrogate against the gallery. You can bet they will do a
thorough job in collection and add their legal fees to the
receiver’s amount due. Something which might be pointed out to the
gallery if it indeed was a COD.
Now, it just occurs to me that this shipment may not have been a
"regular" COD afterall. If the agreement was something like, “mail me
a check after you receive shipment” and they received shipment and
neglected to send payment, then this would be the granting of credit.
Beyond terms certainly but also as certainly a civil not criminal
matter. The recourse here would be collection, either thru a
collection agency or an attorney or one’s own pursuits. If one tries
to collect on one’s own, one should be very careful to follow the
laws concerning debt collection.
but this may represent a significant chunk of this designer's
income for the year. It seems appropriate to take the necessary
steps to recover it
Indeed! But this designer also needs to manage her 87 accounts. From
the wording of her query it sounds like this is the first time it has
happened. A hard lesson to be sure but I would hope my earlier
suggestion to create a credit department does not fall on deaf ears.
Lest anyone think I am uncaring about her financial situation I have
taken time out of my day to research and compose when I could have
been working. If it ever got to court the plaintiff’s need for the
money would hold no sway, case would be decided upon facts and the
judge’s instruction to the jury(assuming there is one). And even
once she got a judgement she would still have to actually collect
from the gallery’s bank account (IF there’s money in it) via service
by sherriff which costs her more money up front.
That’s a lot of grief to go thru when working something out amicably
or turning it over for collection will make this businessperson’s
working life easier and more productive.
in some states partial payment is considered a full payment
I know partial payment on a bounced check removes the case from
possible criminal proceedings (because its now a credit situation, ie
a civil matter) but i hadn’t heard of it applying to regular debt. I
wouldn’t want to be in whatever states allow that.
I think honesty is best. Call them & ask if they are having cash
flow problems & you'd be willing to accept XXX$ a month til they
paid what they owed You.
It is precisely this type of sentimentatlity that assists the
non-paying gallery/galleries in continuing to defraud jewelry makers
that are less than business like about placing their merchandise in
these establishments in the first place…
Has anyone else noticed the male female division in opinions on this
subject…female respondents are more likely - in this thread- to be
passive and get taken, as if their time and materials costs are
negotiable…males, think a direct approach at retrieval best…other
than the few that say essentailly, “blow it off”…, The “blow it
off” contingent are eliminated from my tallying male or female…
When will honest confrontation be come an option??? Or is it that
most, of the people recommending give the “gallery” more time, etc
simply have no need of money in the first place and are doing this
as a form of therapy or some other non-business reason in which how
one “feels” is more important than how one makes a living, and
clearly demarcates the dividing line between business acumen and the
surrender of power along with an individual’s precious metal, stone
and time investments…
This particular gallery, does not deserve a payment plan, any further
considerations or anything other than legal actions at this point…
This particular gallery, does not deserve a payment plan, any
further considerations or anything other than legal actions at this
Twice now, I have had issues with non-payment. The first case, was a
small, privately-owned gallery, who I later found had a history of
slow payment, a couple towns over from me. I had even witnessed an
employee wearing one of my bracelets and telling me how she loved her
new purchase. When I called twice to ask for payment, they gave me an
office number to call (stalling tactic). I pulled the work. I simply
said “I’m taking my work in another direction” No other explanation.
The other instance was a gallery up in Mass. I waited about 6weeks
(I think). I called. The sales person was very terse. I took this as
a sign. The first time I simply left my name and number. Of course
there was no return call. I called again. This time I got “and what
is this referring to?” very tense. I simply said “it’s a collection
call, ma’am.” I got the check shortly after. I don’t know if it was
due to my calls or whether she was going to pay anyway, but my point
is…don’t make it personal. Something I could have said to her that
would be making it personal would have been “I’m sorry to bother you,
but I have to buy material next week and so I’m calling to see if
there is any way…etc” The second statement gives the other person
my power. In the first statement, I stay in the driver seat.
I have had great, great luck and support from the local non-profit
Art Center. I highly recommend non-profit institutions. The money has
no tie to the person who is cutting the check each month. I get a
check in the last week of the month, like clock work.
The only other point would be this…I don’t feel bad at all for
not having my work in the first 2 places anymore. I don’t give it a
second thought. Now, I’m able to send more work to the Art Center and
so, I sell more…and I always get paid.
It happens to everyone, but it feels a whole lot better to stand up
for yourself, even if it means pulling the work or having your
attorney send a collection letter.