Return of consignment piece

Jewelry Discussion
1

Good day everyone,

I have a bit of a dilemma and need a few opinions please.

A consignment piece of mine sold, yippie! Received a check for it a
month or so later.

Customer came into the store after I cashed the check ( a month
after it was sold) expressing some regret about the purchase,
thought she might not wear it enough to get her moneys worth…
clerks talked to her and she said she would see…another 3 weeks
past and she did return it to the store.

I am not sure if the store gave her a credit or her money back.

Question…Where do I stand. Am I obligated in giving back the
money or does the store now own the piece because they decided to
take it back after nearly 2 months.

I have not spoken with the owner as of yet. Personally…I feel that
my piece is now owned by the store. And I owe nothing.

Please help.
Thank you,
Laurie

2

Hi Laurie,

Your return policy vs. the clients store policy don’t need to be the
same. That said, you both should agree on terms for situations like
these up front or establish a policy for this now. What you don’t want
is the store to withhold payment from you for a long period just to
cover their own butt in case of a return. In this case months have
gone by and the piece was paid for by all parties and probably was
worn.

Personally as a store owner, I wouldn’t ask for the refund… My
decision becomes my store stock…but that’s me.

My philosophy is be good to my vendors and they will be good to me.
(Wow I found religion) I own an emerald cut diamond from a dealer that
I thought was sold and the customer changed her mind…My dealer had
already paid the guy he got it from. I could have stuck it to him and
gave the stone back but then I’d be finding a new diamond dealer or it
would cost me in the long run. Anyhow, it’s a nice stone. lol.

Good luck,
Mark

Ps Some vendors will occasionally ask for all their memo merchandise
back to clean up what is owed and because some retailers don’t pay
for the memo goods sold until they have to.

3 
Am I obligated in giving back the money or does the store now own
the piece because they decided to take it back after nearly 2
months.

No and yes…but,

Take into consideration who your client is in terms of your overall
business. If they buy (not just carry your consignment but actually
BUY) a lot from you, you might think about a ‘feel good’ settlement.
Maybe take the piece back and offer a credit, not a refund. Or swap
the piece for something of their choosing from your line. Extended
privileges have to be earned by giving you money now and then. The
basic question is how much are they worth to you?

Two months after the retail sale?..its a done deal I think. The
retailer waited a month to pay you, mostly so they would know if the
sale stuck. I think its their problem now.

But I would wait til they approach you. Who knows, you might be
concerned over nothing.

4

Laurie,

The store created their own return policy and now they own the
piece. You are not obligated to do anything except enjoy your check.

Karen Christians
Cleverwerx

5 
Where do I stand. Am I obligated in giving back the money or does
the store now own the piece because they decided to take it back
after nearly 2 months.

What is the store policy for returns? What agreement do you have in
writing signed by you? I sell (mostly) Colorado jewelry artists work
that is on consignment. Store policy is exchange only. Posted on the
wall, on the credit card receipt and the sales slip. The return
period is ten days. We pay on the 15th of the month. On the
occurrence of a return after payment we would just work the return
amount against future artist sales. There is no basis by which a
customer can expect to return anything for full money back. All sales
are final legally unless defect or fraud I believe the practice of
being able to return merchandise other than for defect was started by
department stores. Customers think they have a right, sometimes even
if they do not see the sign, read the sales slip, or the credit card
receipt. Sometimes I have to educate a customer politely but firmly
what the policy is, why we have it, that we have a right to the
policy we have…and then I politely ask them why I should change my
policy for them. They always have an answer. However, I politely tell
them that changing my policy does not work for me…do you want to
pick something out or a credit for another time?

Richard Hart G.G.
Jewelers Gallery

6

The most common way that this is handled, in my experience, is that
the gallery/store/venue refunds the customer according to their
policy (in house credit, cash refund, etc.). The gallery then owns
the piece and can either resell it at whatever price they like, add
it to their collection or donate it to an auction or fund raising
event.

The artist keeps their commission (the wholesale price).

If the return occurs more closely to the sales date, the situation
might be different. But after 2 weeks, I’d say that the deal is done.
Certainly after the artist has been paid.

Hope that helps,
Andy

7

Here are just a couple of answers to your questions…

I do not know the stores return policy but I will find out tomorrow.
They have contacted me and want to “talk” about the piece which was
returned.

They are a very small store and I have a handfull of pieces in there
for sale, all on consignment.We have had a friendship for years and
have no “formal” agreement of any kind…My mistake, I know. Never
mix business with friendship…lesson lerned.

Don’t know if it matters but the check to me was for almost $800.00.
If we were talking about half this I could almost understand and give
the money back, sort of… but, this is a lot of money to me.

Thank you everyone for your wonderful words of wisdom. The
conversation tomorrow will be interesting and I will post the
outcome.

8

I imagine it would all depend upon what you and the store owner
agreed upon. This is why getting an Consignment Contract is so
important to both the designer and the store owner. With a contract
that lays out specifics, from compensation for a sale,
responsibility of theft, return policy, agreed time between
refreshes, etc., neither of you will have a question when problems
arise.

Who is responsible for lost, damaged or stolen merchandise? Are you
covered under the store’s fire/theft insurance policy? If so, make
sure to get a Certificate of Insurance listing you. If not, then what
happens? Are items warranteed or guaranteed? There is a difference.
Learn it and know what it means to you.

If they are warranteed, is it for repairs and defects only or abuse
too. If so, for how long? If guaranteed, for how long? 7 days? 30
days? Forever? For cash refund or store credit?

These and many, many more questions should be addressed between both
the consignor and the consignee. Merchants are basically getting
stock for free. IT should be treated by them as if they paid for it.
If they have no responsibility towards it, then why are you leaving
your product with them? Work up a contract, and you can keep a
working relationship for years. Without one, and the first sign of
trouble could cost you big time.

Just my 2 cents as an ex legal secretary who specialized in
Commercial Litigation. :slight_smile:

Michele
MikiCat Designs

9

all depends on what you have in your written consignment agreement.
also what the published policy is of the shop that you consign to.

john

10 
We have had a friendship for years and have no "formal" agreement
of any kind...My mistake, I know. Never mix business with
friendship...lesson lerned.

I dunno, I prefer to work with friends and have done so very
profitably for many years. Some of my best business has been with
some of the best friends I have ever known, and has been totally
devoid of any formal agreements. When there have been problems, we
talked about it and worked them out. That’s what friends do. I’ll go
so far as to say I don’t do business with people that aren’t friends.
But I’m of the Will Rogers school of thought, I consider everyone to
be a friend until they prove me wrong.

From a retailer’s perspective, they held your money for one month to
ensure the customer was pleased, and after that the sale should be
considered final. If they couldn’t afford to give a refund, they
shouldn’t have given one, and they certainly should not expect you to
without checking with you first. No diamond dealer would give a
refund two months after the sale, nor would any other wholesaler. If
they insist that you pay to cover for their generosity, their
insolvency or at worst, their bad judgment, you have found out what
kind of “friends” they really are.

And don’t for a second think such a “friend” would be deterred from
asking you to pony up if you had a contract. Such folks don’t let a
little piece of paper get in their way. A friend wouldn’t do a friend
that way, contract or not, no good business person would either.
That’s why I don’t do business with people that have shown they
aren’t friends, and it’s also why I don’t do contracts. Unless you
are willing to go to court, contracts are pretty much worthless;
people that don’t respect you or your jewelry aren’t going to respect
a contract either, and if you do find yourself in a courtroom, a
friend will be your witness, not your adversary.

Just another of the 1001 reasons why selling wholesale beats selling
on consignment.

For an old friendship’s sake or if it has been a profitable
relationship that’s worth giving in a bit, maybe a compromise could
be worked out that would work for both of you, but the bottom line is
this - after the thirty day holding period (which is quite generous
on your part by the way, and certainly is the act of a friend) it is
the retailer’s problem, not yours. If they made the decision to give
a refund to their customer after their thirty day return policy had
expired, and did so without your input, they need to live with that
decision, without your output.

In your original post, you indirectly indicated that you don’t know
if you are going to be asked to refund your payment. Don’t borrow
trouble. It may be that the retailer ate it already and has no
intention of dragging you into their generous return policy and
maybe they just want to talk about it and get your input about their
policies going forward. Or maybe they want your input whether they
should get a margarita machine or just have beer and wine at the
summer party. In any case, don’t go looking for or expecting a
fight, you might just find one and lose a friend in the process.
Incidently I’ve faced this very scenario many times, and never once
even thought of asking the consignor to refund my purchase. Once I
write the check, it’s my baby.

Dave Phelps

11 
The gallery then owns the piece and can either resell it at
whatever price they like, add it to their collection or donate it
to an auction or fund raising event.

Your neighbor comes and knocks on your door and says, “I put up a
new fenceand your half is $5,000, here’s the bill.” You say, “Thanks
for the free fence.”

A friend walks up to you and says, “I bought this camera for you,
here’s the bill for $500.” You say, “Thanks for the free camera.”

The store decided to take a piece back, they never asked you, never
talked to you, and as several people pointed out it’s beyond a
reasonable time for returns. That has nothing to do with you - it
was the store’s decision.

They own it. That’s what negotiation is about, having agreements
before action is taken.

It’s like the old post office ad where an Eskimo gets a fan (or
something, don’t recall) in the mail, holds it up and says, "Gee,
Thanks!’ And the voiceover says, “If you ever get anything
unsolicited in the mail, you own it, lock stock and barrel. It’s the
law…”

12 
The store created their own return policy and now they own the
piece. You are not obligated to do anything except enjoy your
check.

I agree, my thoughts exactly.

You are not in control of the third party conversation, what the
gallery people did with their customer is just that, something that
they did with their customer.

Good for them.

Mark Zirinsky
denver

13

I hate to say or even think this but sometimes I think people buy
nice pieces of jewelry to wear to a particular event and then
afterward try to return it for the very reason your customer said,
“not going to wear it enough”. In my opinion 2 months to have a
piece of handmade jewelry is more than enough time to decide if you
should keep the piece, but you have a lot to weigh in terms of the
relationship between your gallery and your customer, etc - I guess
every situation is different, but something smells foul to me.? I do
the show circuit and I know for me taking pieces back is a big
headache because the money is usually already spent, but sometimes
you just have to to save your relationship with the customer,
although I always attempt to get them to exchange for something else
if I can - hopefully that way no one takes a loss. Tough call.

14

All,

This is an excellent reply. Everyone, I mean everyone should read
this thoroughly. At a SNAG conference years ago, I headed a panel of
galley owners and jewelry artisans to address just this point.
Contracts for artisans at that time were thought of evil and
unnecessary. The adversarial responses from the audience were
astounding. It is good to see a new responsible way of doing
business has resulted and that store owners as well as artisans are
speaking up.

Expectations between an artisan and a store owner should be discussed
up front and signed on the dotted line.

The from the link below was available to all artisans
before the panel discussion, but SNAG with the generous assistance
of Harriette Estel Berman, drafted up contractual guidelines for
artisans as a result from their conferences including a special day
on Professional Guidelines. It is a wonderful resource to help any
artisan.

http://www.snagmetalsmith.org/.docs/pg/10025

Karen Christians
Cleverwerx

15

bonjour Laurie,

if I understand, the customer kept your piece for about 6 weeks
before she returned it to the shop… This much more than the usual
one month return policy of most shops.

As a shop owner I wouldn’t have taken the piece back after more than
a month.

As your piece has been sold… it is not in your ownership any more,
nor is it in your responsibility.

In my opinion, you shouldn’t do anything about it. Keep the money
you earned.

Juliette Arda

16

Laurie,

If you’re like most jeweler/artisans the money from that consignment
sale went straight back into inventory so you can carry on the
business of making jewelry. If you accept too many returns you won’t
have the cash to operate your business. If someone has buyers remorse
a few days to week after their purchase you may wish to accept the
return, as long as the piece is unworn and not damaged, to maintain
good customer relations. But after two months the customer owns the
piece. Try to return your new car to the dealership after two months
after you bought it, they will only buy it back as a used car.

You may wish to write a sales and return policy for the stores that
you consign goods to so that there are no misunderstandings in the
future.

Good luck
Ian Davidson

17

The Professional Guidelines is indeed a wonderful and important
resource for all artists across a multitude of media.

However, as the Contributing Editor-- and former liaison to the SNAG
board-- of the PG I feel that I must set the record straight.

The PG is the brainchild of Harriete Estel Berman. Over the years
several arts professionals have reviewed documents as they have
evolved and have helped fine-tune the content.

SNAG has acknowledged the importance of this series of documents and
now features it on the website but, to be clear, The Professional
Guidelines was conceived and implemented by Harriete Berman.

Take care, Andy Cooperman

18

Hi Laurie,

To be completely honest I think the store went about this return
totally the wrong way. Since it was your piece of jewellery and you
were technically responsible for it since the store didn’t buy it
from you they should have asked you first if you would be willing to
accept the return, especially since the customer only came forward a
month after the piece was sold to her. With that in mind I think the
best course of action would be to contact the store and find out
what happened. It’s more than likely the store has taken possession
of the ring and subsequently sold it at their own price, cutting you
out of any other potential profit that you possibly could have gained
from the piece’s sale.

Cassandra.
www.persephoniestudios.com

19 
Since it was your piece of jewellery and you were technically
responsible for it since the store didn't buy it from you they
should have asked you first if you would be willing to accept the
return, especially since the customer only came forward a month
after the piece was sold to her.

Sorry, that makes no sense to me. I could understand the store going
to the maker if the piece needed repair or something, but it’s the
store that made the sale and established the return policy. I don’t
see that the consignor has any obligation after the merchandise is
sold, unless a written consignment contract says otherwise.

However, the Uniform Commercial Code doesn’t seem to address this
question (though state versions might), so the sensible rule is Put
It In Writing!

Al Balmer
Sun City, AZ

20

Hello everyone and thank you very much for you comments and in
helping me think things out a bit more clearly.

Unfortunately, after talking with the owner of the store
today…long story short, I am taking the higher road and will be
sending her a “refund” check for the piece which was returned.

I told her my side of the “story” which was what everyone here had
mentioned…it sold, she wore it, took to long to return it…store
owner is responsible, not mine, etc…

Her side of the story was a bit different…customer purchased
it…called and said she was having second thoughts after a couple
weeks…took another couple of weeks to really decide she didn’t
like it…was given a store credit. This is a long standing
customer of this store, over 15 years and the store owner was not
going to jeopardize that over my consignment piece…this I
understood, BUT…she would no concede to what I was saying and
therefore, I decided to be the bigger person, call it stupid or
crazy.

I now know what kind of business person she is and will have a
different attitude going forward with our "business arrangement"
which will be changing I will assure you of this. Hard lesson
learned. I hope this might have helped ward off any future
misconceptions any of you might have with your galleries and stores.

Thank you again everyone for your helpful advise.
Laurie