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Ask INSTORE: November 2008

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Rules of playing music in your store, dealing with an aging employee, the pros of a jewelry-specific-POS system, and more.

[h3]Purchased music not permissible as store soundtrack[/h3]

[dropcap cap=Q.][h4][b]I’m allowed to play CDs or music from my iPod in my store, aren’t I?[/b][/h4][/dropcap]

[dropcap cap=A.]You may have thought you were taking ownership of that CD and its music when you handed over your $20 in the store or to iTunes, but in reality you were entering into a legal agreement that would have done Creedence Clearwater Revival’s original record company proud. Strictly speaking, you must pay royalty fees to the artists, or you run the risk of legal trouble if you broadcast those tunes in your business, at a sales presentation or even as “hold” music on your telephone system. There are exemptions for small guys.

According to the Fairness in Music Licensing Act of 1999, if your store is less than 2,000 square feet or has fewer than six speakers, you’re in the clear. If you’re bigger than that and want to stay on the right side of the law you can pay licensing fees directly to the organizations ASCAP and BMI. “Yet it’s easier to go through a music provider who pays licensing fees on your behalf,” says Jaya Schillinger, president of Inspiration, Inc., a strategic coaching company. “Some music companies that meet compliance are SIRIUSBusiness (not the home version), Muzak and DMX. There are also companies that will create customized mixed CDs designed to enhance your brand.” Another legal choice: Pipe in music from the local radio station.[/dropcap]

[componentheading]EMPLOYEES[/componentheading]

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[contentheading]Signs of Aging[/contentheading]

[h4][b]One of our employees is starting to show signs of his age. He’s losing his hearing and seems to be getting more forgetful. He wants to work to age 70 — three more years. What do we do?[/b][/h4]

This is a tough one. You want to be loyal, and don’t want to be perceived as cold-hearted but you and your business can’t afford sales-floor errors or to allow other employees see you tolerate costly mistakes. The best strategy is to stay focused on performance, not the person.

Treat your older associates the same as you would your younger ones. “Deal with issues for what they are — not for the reasons behind them,” says Kate Peterson, president of Performance Concepts. For example, if your older associate hears something incorrectly and his actions lead to a customer problem, address the immediate issue — the customer problem — regardless of the underlying cause. A person can easily deny that his hearing or memory is failing but he cannot deny the obvious outcome. If you decide your store can’t continue to support a failing employee, consider investing in a retirement package. Perhaps you could employ the associate as a “goodwill ambassador” for your store.

If you decide it’s time to part ways, ensure every detail is handled correctly. “Clearly defined performance standards, daily coaching and fair rewards and consequences must be applied consistently for all associates. You can’t terminate an employee for failing hearing or memory — but if necessary, you can for continued failure to deliver to the job requirements,” Peterson says.

[componentheading]DISCOUNTS[/componentheading]

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[contentheading]Retail for Retail[/contentheading]

[h4][b]What kind of discount should I give my bookkeeper on my merchandise, given that she knows exactly how much I paid for it?[/b][/h4]

We’d say very little. Your bookkeeper should be a pro who understands how discounts impact your bottom line. If she asks for a “good price,” offer her the employee discount or trade merchandise for her services. That’s what Connie Kasper of Phillip Randolph Jewelers in Corpus Christi, TX, does. “To keep it fair for both parties, we trade full retail for full retail,” she says. Unless your bookkeeper is willing to discount her services, you should not feel obliged to cut the price of her purchases. Final finger wag: Stop feeling so defensive about your margins. Consider Nike’s cost of goods sold — $3 for a pair of running shoes made in Vietnam. And the final retail price? Let’s just say they don’t have a line of shoes called “Keystone.”

[componentheading]SOFTWARE[/componentheading]

[contentheading]Jewelry-Specific[/contentheading]

[h4][b]Can I get away with a cheap general retail POS program, or should I stick with the jewelry-industry-specific ones?[/b][/h4]

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Experts are almost unanimous on this one: Go with the jewelry-specific software. “The jewelry packages will have features such as job-bag tracking and specific fields for jewelry that a jeweler would miss,” says Robin Gambhir, founder and CTO of OpenBlue Networks Inc. If your budget is a concern or you’re just starting out “there are a lot of good online solutions like www.freshbooks.com that represent the future as software moves off of the desktop and onto the Internet,” he says. Freshbooks handles invoices, time tracking and other basic service in return for a monthly fee. Ultimately, saving money on software is like trying to cut corners on health care — just not a good idea. To be sure, there is expensive and not particularly good software out there, but that just means you have to do your research. “If you feel you can’t decide between two packages, check out what kind of support you get,” Gambhir advises. “Great companies will give you the mobile number for a senior tech to be used in emergencies. Just knowing you have that says volumes about how they see their product and their clients.”

[componentheading]APPRAISALS[/componentheading]

[contentheading]Picture Perfect[/contentheading]

[h4][b]Is one photo enough for an appraisal? I’ve seen some people argue you need a dozen or more.[/b][/h4]

One is usually enough, says Gail Brett Levine, executive director of the National Association of Jewelry Appraisers, quickly adding, however, that her endorsement comes with a long string of conditions and exceptions, starting with the quality of the image. It has to be “one that fills up the viewfinder, so you can get really good detail of what the piece is about.” And then there are those exceptions: “For instance, for a double-strand pearl necklace — say 20-inch — it really doesn’t help to use only the photo that encompasses the entire piece. We usually also include a close-up photo of the clasp and five to eight cultured pearls on each side.” For rings, separate top and side views are typically necessary, especially with the newer micropav mountings, Brett Levine says. “When it comes to brooches — if there is something unusual about the reverse — like with Aletto Brothers that has diamonds set on the rivets, we show a photo of that. Or if it has detachable elements that converts to pendant/brooch/dress clips, we show detail of that.”

[span class=note]This story is from the November 2008 edition of INSTORE[/span]

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