Wholesale customer wants credit or exchange

Jewelry Discussion
1

I ran though several digests over the last week or so to read the
"How do you handle returns?" responses, but don’t think my
experience is quite the same. I couldn’t find the original question,
but it seems to relate to the problem of a customer returning an item
that was charged.

What I’ve encountered once already in the past is closing in on me
for another round with a different customer - if a recent
conversation I had with a jewelry store customer of mine is any
indication (and I think it is). Basically the issue is a bunch of
pieces were purchased, a year or so goes by and it’s time to
purchase more to fill in the gaps. The pieces remaining, for whatever
reason, have not done well for the customer and they want a credit
for them toward new inventory.

The first time this happened, I went back in to my account program,
found all the receipts that included these items, totalled them up,
and gave my customer credit for new purchases in the total amount
they paid for the pieces they were “returning”. I was a bit
uncomfortable with this, but this was a good wholesale customer, and
I didn’t want to become difficult.

Now I’ve got a local jewelry store suggesting September might be a
good time to stop in… “… most of your things have sold, but
perhaps we can work out a credit for them toward some new pieces.” Is
this a common practice? I’m not sure how I feel about getting back a
bunch of pieces that I thought were “sold”. This is a relatively
new issue for me, so I’m just looking for some idea of the norm. If
this is the cost of doing business, I’ll just suck it up and get used
to it. But it just seems like it shouldn’t be my responsibility to
determine what might appeal to their customers… that they know
their customers best and should choose accordingly. Should it be part
of my policy to pay the price for their poor judgement? I dunno.
That’s why I’m asking :slight_smile:

What’s YOUR policy under these circumstances?? Would it be reasonable
to substract a “restocking fee” percentage from the total of this
credit? What percentage would be reasonable? I don’t have a policy…
have never felt the need. However, I’m thinking, perhaps with your
help, it’s time to write one!

Learning as I go,
Karan

2

Interesting, when I sell jewelery it is not rented or returnable
when the client tires of it I suggest they sell it on Ebay and use
the money earned to purchase new pieces.

Exchanging jewelry as the season or whim indicates is not really how
we all work is it?

Teri
Silver & Cameo Heritage Jewelry
www.corneliusspick.com

3

Basically they are asking for sale or return. We do this for several
outlets and use a different pricing structure to take this into
account. However, even when giving a lower price for an outright sale
with only returns for defective items (usually customers breaking
them) we still get pieces we are asked to take back. It depends how
much repeat business you are likely to lose by putting your foot
down. We have so far acquiesed when asked because the store was good
business for us generally. It would be nice to be able to afford to
say no but I suspect you are in the same boat. Therefore, you will
take it back for a credit.

Nick

4

I could ask the question “Why are you selling them pieces that they
can’t sell, you should know your customer better”. They have no
better idea what will sell than you do. “They should know their
customer best”, huh, what? Psychic retailers? Anyone with a retail
store knows that some things we like sell, others sit there for
years. We can get better over time having more success as we learn
what kind of customers we attract and what we are likely to sell
faster, but retail is a crap shoot. We carry jewelry artists, some
artists work sells all year round some sell only at holidays, some
new artists work we sell a lot of at first and then it just does not
move at all. I have about 8 artists represented at my store. All
will do trade outs. If you want to keep doing business with wholesale
accounts you have established, 100% trade back for unsold work helps
you and I don’t see the downside. “pay the price for their poor
judgement” is not exactly humility or gratitude. These are the
people that are supporting you, you can acknowledge their support
with understanding the concept of what a win win situation would be
for both of you. By taking back work, you are not out anything, you
just go sell it somewhere else. I have a retail store, but I also
have work that I sell wholesale and I have work on consignment at
galleries. Trading back works with galleries or stores that sell your
work, I did not say galleries or stores that show your work.

If you have accounts that are 100% sell through and are clammering
for more and you cannot keep up with the overwhelming orders, you do
not need to trade out with people who are not selling your work. You
need to stop selling to them.

Richard Hart

5

Congrats on doing so well in wholesale! Interesting problem. I
haven’t run into it yet and I just assumed they paid for it and it’s
non-refundable unless defective. I have a wholesale form my customers
sign indicating what items they purchased at wholesale and that they
are reselling the items, thus responsible for sales tax. I mayl be
adding a non-return clause as well. If they discounted non-sales
items to their cost or close, they will get rid of the items quickly.
It usually accounts for a small portion of items. If you would rather
keep doing that, however, I would charge a re-stocking fee.

6

Absolutely, at least a restocking fee…But a policy and contract at
the beginning when you hand over your merchandise is absolutely a
reality of dealing in the wholesale arena.

If you are Stuller, or Hoover and Strong, Southeastern Findings, etc.
you have programs in place that account for buybacks based on gross
sales…NOT WHIM…I urge you to get a Hoover and Strong catalogue and
read their policies to account holders doing a volume in the 500, 000
range and up, and apply it to your business… What they are asking is
not the norm so to speak, they are taking advantage of your good
nature and non-experience and, perhaps a degree of
non-confrontational ism.

So stand up to them charge them 25% to take it back…It cost way less
a year ago than now, not to mention the overhead, the product being
out on account that you could have sold in another venue, or
yourself…so they misled you as to their sales volume of your pieces,
or got in some cheaper goods and promoted them more fastidiously…
again, if you write me of list i can get an idea of what you need in
the line of business forms and send them out to you if you are
interested. I also have much more to say to you for your situation,
but would rather do it off list, so feel free to contact me.

I am currently a LOT behind on getting other peoples forms packets
out to them so know it will be at least one-two weeks before you
receive anything should you desire forms that are contracts,
agreements, sales related, vendor related, and supplier accounting
agreements too…also, promotional related, competition related, even
employee related and other matters of doing real world business -as
horrid as the notion is.

The need for a package/collection of forms seems great on Orchid,
with so many people that are new to business dealings and egal
matters , copyrights, intellectual property, cost control,
accounting, vendor policies, consignees and related matters, even
insurance and shipping, etc. So I am considering putting it on
digital media instead of using tons of my toner, and ink, and
transparencies, etc…or driving to the library to use theirs! ( 45
miles one way) !! so if anyone has any thoughts on whether or not I
should put together a digital media DVD, or CD, or publish a
collection of forms that can easily be reprinted I’d like some
positive opinions only…that means I don’t need to hear how I
shouldn’t do it, just how I should go about it…as I don’t have
anywhere near the resources Gerry Lewy has to mail things around the
world…in fact, mailing to the next town is a stretch for me at
times!..so since the requests have been coming in steadily since my
first post about the collections of forms I have- all legal in most
states (never sent any to AK!) and prepared by lawyers and
financiers- and whether I should ask for postage reimbursement, I’d
be interested at the consensus.

R. E. Rourke

7

From a retailer perspective: Although my database of clients has
grown to be is quite large, it still seems that it’s the same faces
that come in on a monthly or so basis. These are me “regulars”. They
like the service, the product, the price, the people. If they come
in my store and see the same product that they saw a year ago, or a
month ago they won’t buy. We switch cases, rearrange, redisplay,
etc… Sometimes it works, sometimes we have to stock balance. Nobody
likes to stock balance, but sometimes it’s necesary for the good of
all. Win-win right? Most of my suppliers will do a 1-1 stock balance
on items which have been paid for. Seems kind of fair to me. (not to
mention nice) Suppliers who don’t stock balance better have a really
strong price point. Otherwise like it or not, the relationship only
seems to last one or two visits. (restockings?)

Stanley

8

Hi - I used to own a gift shop that specialized in hand made items.
Once I bought it, it was mine - if I couldn’t sell it that was my
problem! It certainly never occurred to me to trade it back in like
a used car! That seems quite uncalled for to me - I’ll be interested
to see what those who own/run jewelry stores say.

Beth in SC

9 
100% trade back for unsold work helps you and I don't see the
downside.

Well, the downside is you have some old work back and new work
gone…

Isn’t it customary to trade back at a discount? That’s why the
gallery asked to “work out a return”. The percentage is negotiable.
Anything under 100% would feel better than just a straight trade!
Especially if the work requires “refreshing”, like if it is silver
and has not been kept perfectly tarnish-free.

Noel

10 
If you want to keep doing business with wholesale accounts you have
established, 100% trade back for unsold work helps you and I don't
see the downside.

I agree, My customers don’t have a crystal ball any more than I do &
I always call & ask how the jewelry is selling - you can always sell
something once, but business is in the reorders so if You have a
good customer Its in Your best interest to be sure they are moving
Your jewelry. I’ll take trade backs but with a restocking fee & an
exchange for jewelry I have in stock of similar value =AD Not unmade
jewelry that I would have to pay people to make. If Your jewelry is
collecting dust in their showcase they might not be so quick to place
another order.

Mary R

11

I understand your issue with this and think it is just wrong for a
buyer to put you in that position. I definitely do not think you
should feel like you have to take the merchandise back. Do you have a
list of terms and conditions? If not I would suggest you write one up
that clearly states that you do not take merchandise back after a
specific time frame. Mine states that upon arrival jewelry should be
inspected and sent back immediately for a replacement. I do not
accept any returns. What I have done for some good customers has been
to “re-do” the jewelry that looks “shop worn”…I will either re
polish or maybe swap a stone to make it look fresh. I do this because
I want to…I have offered and not been asked. My reason is because
I want the jewelry to sell as much as they do…if not then I could
lose the account. If you think you will lose the store if you are
unwilling to swap jewelry than it may not be worth it…perhaps
if you have “cash carry” on hand, you can pick out jewelry that you
do not mind parting with. If you decide to go that route then
ABSOLUTELY charge a re stocking fee…you should be compensated in
some way.

Laura J. Designs
Laura Jackson

12 
They like the service, the product, the price, the people. If they
come in my store and see the same product that they saw a year ago,
or a month ago they won't buy

I didn’t reply at first because I’m not retail. It’s pretty common
practice in what’s called guild stores to rotate inventory. Many of
the larger suppliers and diamond dealers have what they call
“programs” that let stores return unsold merchandise for fresh stuff

  • I believe Stuller has something like it. It’s a way of keeping a
    relationship going, and keeping sales up. If a store sells all the
    good stuff of yours, and the rest just lays there, they likely won’t
    be back until if/when it moves. Custom made is another matter, of
    course. If you have a line it’s probably to your advantage to
    participate, if you can afford it. Just take back one store’s stuff,
    send it to another, and vice-versa - fresh eyes and all that. It’s
    up to you if you want to get into it, but yes, it’s a pretty common
    practice.
13 
Once I bought it, it was mine - if I couldn't sell it that was my
problem! It certainly never occurred to me to trade it back in
like a used car!.......

Owning a store for over 20 years, as well as running stores for
others for 10 years previous, when I purchase items from a
wholesaler, it is mine forever more, unless the salesrep/mfg/whoever
states upfront that they have a stock balancing program. Watch
companies do it alot but considerably less so amongst jewelry mfg.
You’ve got to be a mighty fine customer to get this from a jewelry
co. Generally, when a store attempts to return old merchandise
without a previously agreed stock balance program, there is probably
an entirely different issue occurring, like poor purchasing
decisions, or bad financial condition and is looking for a way out,
at someone elses expense. Either way, its not your problem. Chances
are extremely good that even if you do the exchange/return/credit
that this account will never be a profitable scenario, as you are
probably dealing with dreamers instead of professionals.

Ed in Kokomo

14

Karan,

It looks like the jeweller expects a service without having to pay
for it, and without having to try very hard to dispose of old or slow
moving items, or take a loss on a few items.

If the ‘buy-back’ or ‘returns’ policy was not mentioned at the time
of the sale, then it is pretty forward in my view to assume a year
later that one does exist. Perhaps the jeweller is asking about it in
a way that puts pressure on you to say yes, and the pressure is real
because your answer will affect future sales to him.

You could say that you do have a returns policy, it is
this…(exactly how you would like it - selling price less 25%
and increasing with time, an influence in how he promotes your
stock, etc). To compensate you for the extra trouble all this
involves, your prices for the next batch of items has gone up. If he
baulks at the higher prices, you can then offer a reduced price for a
straight sale - a “no encumbrances, freehold possession” type of
sale.

Cheers, Alastair

15 
Once I bought it, it was mine - if I couldn't sell it that was my
problem! It certainly never occurred to me to trade it back in like
a used car!

Trading out jewelry that has not been subject to wear or abuse can
hardly be compared to a used car. And that it did not occur to you to
do it hardly seems like a good reason for anyone else who buys
jewelry
to not ask for that as a condition of the sale. And one other point
to
ponder, there is a lot of competition out there, if you do not
exchange unsold merchandise, I bet there is someone whose work will
sell as well as yours, and they trade back for exchange, who am I
going to do business with? My experience is that a retailer who buys
your work and promotes you is worth doing trade backs with.

There are two reasons I can think of for why someone would not want
their old work back. One is you don’t want that stuff back, or you
cannot afford to take it back and not make a sale. One diamond
company I worked with traded back as much as you could buy, trade
back $2000 as long as you bought $2000.

There are a lot of people, large and small businesses who do trade
backs. It is more common than not for the type of jewelry businesses
I do business with. You know how you would feel if a store you were
shopping at had a sign, no exchanges, no refunds for any reason. You
might not want to buy anything. Selling jewelry involves as much
creativity as making it, if not more.

Richard Hart

16

I do trade-backs, now with a 10% restocking fee. Why would I want a
store to stall out on the sales of my jewelry due to picked-over,
old stock that their repeat customers have seen in the cases for
season after season? That would be the end of effective sales in that
store. I do ask that the store display the work for an entire season,
preferably over 6 months. I have not had anything that I would call
an abuse of this system. I found that buyers at the Rosen wholesale
shows expected this service, and were more willing to buy from me
when they found that I would, in fact, provide it.

The one thing that I do not like to see when I get the work back is
an excessively high mark up price put on the work. I sometimes feel
that could be the reason it didn’t sell. But some stores have higher
overheads, and want to mark up more than 100% (buy for $1, sell for
more than $2). If those prices work for them, fine. Good for them.
It may be paying for good health plans for the sales staff. But if
they can’t sell work at that level, then we need to talk. But, as I
said, I have had very few problems.

One thing that I really enjoy about this process is the frequency
with which I find that another gallery needs the exact same piece
that just came back from someone else in a trade-back! “Ha!”, I say.
I always get a kick out of that. (Well, you’ve got to take your fun
where you can find it.)

M’lou Brubaker
Minnesota, USA

17

I work in a jewelry store and every store has jewelry that just don’t
sell. If we buy from a vendor and after a reasonable time, we find
that certain pieces don’t sell, it is really good relations between
us if they will take the items back and exchange them. I agree that
it has to be a reasonable time frame, within the year at most…For a
small manufacturer, this may be difficult but in these times, if it
is an exchange and you can resell the items…are you losing? Not
every store sells the same items well, what may sell in my store may
not sell 10 miles away. I think it is good for more business for you
if you will have some sort of exchange policy. Set your parameters so
the time and amount of jewelry is reasonable in the exchange.

18

Been watching this thread for a while. Basic law of business; “a
deal is a deal”. Unless otherwise agreed, you buy it you own it stop
sniveling.

Having said that as a retailer I appreciate a willingness on the
part of my suppliers to swap off. Some will do it 1:1 others 2 or
3:1.

I am rarely interested in trading 2 or 3 to 1 on a line that isn’t
selling, dah, whats the point! We have been around 30 years and have
alot of return business during our high season (July-August). Often a
line will sell like crazy the 1st year then die the second.

Ironically if the line is selling its more in the supplier’s
interest to swop. Have had a good experience with Stephen Webster and
Nouveau 1910

Richard