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How Should This Store Owner Handle an Exchange Request on an Item She Donated to Charity?

The purchaser’s wife wants something “more her style.”

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LINDA WILLIAMS LOVED her community. In fact, over the years that she had owned Williams Jewelers, her favorite part of being a small business owner had become participating in local charities and giving her time (and store merchandise) to benefit people in the surrounding area.

ABOUT REAL DEAL

Real Deal is a fictional scenario designed to read like real-life business events. The businesses and people mentioned in this story should not be confused with actual jewelry businesses and people.

ABOUT THE AUTHOR

Trace Shelton is the editor-in-chief of INSTORE magazine. He can be reached at trace@smartworkmedia.com

This was also a quality that her team at the store recognized and appreciated about Linda, and they loved to be involved in “giving back” locally. From her salespeople to her bench jewelers, part of the value they felt from their employment at Williams Jewelers was the good feelings they experienced from contributing to so many charitable efforts.

Local charities knew that when they needed to raise money, Williams Jewelers was one of the first businesses to call. In fact, it finally reached a point that Linda felt the need to limit the store’s charitable gifts; they just couldn’t afford to support every charity that came calling. She convened a team meeting and asked her team for ideas about ways that they could focus their giving.

As a mother of three, Linda had always felt a close connection with charities that served kids and teenagers in any capacity. She shared that with her team, and to a person, they all felt that giving back to local children seemed like the perfect way to focus the store’s charitable efforts. Linda began working closely with organizations that had a stated goal of benefiting young people. While she felt bad about turning away other charities, Linda was energized by the feeling of putting more money and effort into a cause that was near and dear to her heart.

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So it was that when Get Well Soon, a local youth hospital charity, approached Williams Jewelers about donating a piece of jewelry for their annual black-tie gala, Linda not only agreed to contribute a piece, but she and her staff wanted to design something in-house especially for the event. After meeting as a team, they decided to create a pearl and diamond necklace at a retail value of $4,500 (which was published in pre-event press).

Unfortunately, Linda was unable to attend the gala herself because of a family commitment, but Get Well Soon was thrilled with the necklace donation, telling Linda that a gentleman had bid more than double the retail value of the piece. Linda shared the news with her team, who were all excited that their contribution had been so well esteemed by the gala attendees.

However, about a week later, a woman named Allison Glass walked into the store and brought the necklace out of her purse. Linda’s heart sank when she saw that it was the necklace that Williams Jewelers had donated to the gala auction. She said that her husband, Gordon, had cast the winning bid and had gifted her the necklace. She explained that while it was a beautiful necklace, it “just wasn’t her style.” She knew that the necklace had a retail value of $4,500 and that her husband had paid more than twice that, so she asked Linda if it would be possible to exchange the piece for something else in the store.

Linda was at a loss. The necklace had been designed specifically for the event and wasn’t the type of piece that could easily be placed in the showcase and sold. There was obviously no vendor to return the necklace to in exchange for another piece. If Linda decided to take the necklace back and allow Allison to choose something else — even if Allison agreed to an exchange for something that was near the $4,500 retail value of the necklace, rather than the $9,000-plus that her husband had paid — the store would be out thousands of dollars in the cost of the second piece, in addition to what it had cost to design and build the custom necklace in the first place.

The Big Questions

  • Should Linda accommodate Allison’s request?
  • If so, what form should that take?
  • Is there any way to donate custom jewelry to a charity without the risk of finding oneself in this predicament?

 

Robin H.
Pennington, NJ

A resounding NO, small businesses are often put on the spot like this. It has happened to me in my store. The jewelry store should have made the donation with fine print. Most small businesses like ours just cannot afford that kind of loss, and she was kind enough to make a grand donation! I have a client that won a Porsche Boxster in a raffle years ago. Car was not changeable or exchangeable!

Peter L.
Ithaca, NY

Take it back instantly. Do not let her think this is an imposition on you. Let her know that if she doesn’t want it, you don’t want her to have it, either. Reason No. 1: A customer has an expensive piece of jewelry from your store that she is unhappy with. That sentiment needs to be dispatched instantly. Get her something she loves and will rave about, instead of denying the return and give her something to complain about. Turn this into a positive experience for her and she will never forget it. Build TRUST! Reason No. 2: Hubby just spent $9K on a necklace. He loves to spend on her. It was a high-profile purchase. Do right by her and him and you’ll have a good customer for life and maybe more residual customers through word-of-mouth. This is a chance to provide awesome customer service. Don’t mess it up. The potential “loss” (you donated it, remember?) is far better spent providing excellent service and winning a big client than any other form of advertising. Win-win.

Richard S.
Seattle, WA

This was a gift, therefore, no monetary value to the store since no profit was received as a result of the sale. The woman should have a conversation with her husband about donating the piece in kind to their favorite charity and be as generous in her actions as the jeweler was in making and donating the piece.

Eric L.
Allentown, PA

No exchange. Her husband was going to donate $10K anyway to the cause. The client can put the necklace up for sale and enhance her husband’s donation.

Bill M.
Old Saybrook, CT

First of all, she should have made it very clear to the charity that she donated to that “this item is a gift from x jewelers to x charity and is not eligible for exchange or return, and it is your responsibility to inform the winner accordingly.” We always include this statement in the paperwork accompanying any charitable donation that we make. Secondly, she designed something specifically for this event that otherwise would be a difficult piece to sell — big mistake! Donations are a great way to move dated merchandise, estate pieces and other items with low cost and high margin. Considering that the recipient does not appear to be an existing customer, the owner needs to evaluate whether she can convert her to become one, what PR damage may result from not accommodating her, and if she can break up or modify the piece to make it more saleable. But she should allow the woman to pick out a piece close to the $4,500 retail value and make the exchange.

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Bruce M.
Milton, MA

We donated a special pair of earrings I made for the hospital’s gala, and the lady who purchased the winning ticket wanted to exchange them for something else. I didn’t realize the hospital had given her tax papers on the value of the earrings, and she was pissed. When I offered to only give her $1,000 for a trade-in, she blew up and has badmouthed me for a decade! Remember, she only paid $25 for a raffle ticket, so she had no investment. Why try to win something you don’t like? In our case, it was the taxes she was so upset about. And yes, we lost a customer, but there was no way I would give her any more money than what I had invested. Since there would be no winner in this fight, I decided to protect my checkbook.

Leo A.
St. Louis, MO

Having raised more than $1.6 million dollars doing what is in this scenario, I have experienced this exact thing. I always allow exchange, as it’s the store’s image and charity’s image at stake. I am clear that anything above the retail value they paid was their donation, which they are still giving to the charity. In many cases, I just tell them they can pick any item with the same cost. This way both our donations are intact.

Don D.
Tampa, FL

I’ve had similar incidents with donated jewelry to charities. Eventually, I started giving gift certificates. To answer the question, my typical response has been, “I’m sorry, but we donated the item to the charity with the expectation that only people interested in owning the item would place a bid. If you want to trade the item in, we will give you $4,500 credit toward any in stock item selling for an equal additional amount (meaning $9,000 or more).” However, if this were a longtime customer of my store, I may have taken a different approach. I believe the husband is entitled to a charitable tax deduction for any amount over the $4,500 value.

Amy C.
Grove, OK

This is probably pretty common — it actually happened to us! The woman who purchased the item decided she wanted something different after all. I stood firm, thanked her for donating money to the charity and told her that was a gifted item to the charity and she would not be able to exchange it. She could donate it back to the charity, however. I think my incredulousness at her request (and her realization of such a ballsy request) must have come through, because she never spoke of it again. She was not a customer of the store — if she had been a good one, I might have traded. Maybe.

Deb L.
Appleton, WI

This is a very tough situation for Linda to have to deal with. First of all, it does take nerve for the customer to come in and want to return it, knowing it was specially created and donated for a special cause. And the fact that her husband thought that she would look amazing in it, that alone should be reason enough for her to want to keep it. I believe that Linda should explain the truth to the customer about how much time and money was put into it to be made for this occasion. Tell her that it would be hard to sell being a one-of-a-kind masterpiece and that the customer should be proud to wear it. When we donate anything to any organization, we tell them that there is a no return or exchange policy with donated items. We also have this information printed on the receipt.

Stew B.
Natick, MA

Hds this happen once. Was not nearly that value nor custom. Since that time, I require that the advance publicity and auction program clearly state the piece is for this auction/raffle, etc. and may not be returned or exchanged. We also do not give rings. The one time turned into a nightmare sizing situation. Experience, the cruelest teacher.

Jim D.
Kingston, NH

What you see is what you get … it would be best to include a business card with the donation that states that the item can be exchanged or if there is a cost for sizing, lengthening, etc. I have had a few people try to return items after buyer’s remorse sets in, but I politely refuse. Try that at Tiffany’s after buying something from Sotheby’s. At one time, I donated gift cards from my shop, but I stopped that after people assumed what they bid (and won) at the auction should be the new value of their gift card!

Susan S.
Tulsa, OK

I have been in this position in the past myself. It is very awkward. My solution later on in the donations I gave was to stipulate that the piece would not be returnable for the same reason, that the piece was made specifically for that auction. But I did give the charity the idea that if someone else was bidding on the piece, they should call them and see if they were still interested in owning it and tell them it was available again at the original cost. The charity would need to return the remaining money to the original winner of the auction, or perhaps not. Fortunately, I never was faced with this predicament again.

Joseph V.
Austin, TX

There may be two possible solutions here. First, let the individual know that the item was uniquely designed and made for the charity event. Therefore, the item is not returnable. However, we can offer the following: 1) Offer to take in the piece on consignment to resell, or 2) offer the individual a store credit of $4,500 (which was the stated value of the item at the gala) towards something in stock. At least this way, the individual has been given a few choices and not just a flat out “no we cannot help you.” In the end, it is really the charity organization that is the client and not the bidder (Allison Glass) from the charity event.

Geralyn S.
Chico, CA

Giving back to the community is something that I am very committed to also. Often, auction items are “won” for less than the retail price. She had said her husband paid $9,000. But, this doesn’t appear to have proof of purchase. Even though he may have paid $9,000, I would explain the importance of the piece being created for the fundraiser and promotion of the event with press in the media with images and details was specifically for the charity to raise funds. The amount was donated to the charity and is a tax deduction for the buyer. The store donated the item to give back and support youth in their community. It’s a win-win for the charity, which was the reason both parties gave their donations. I would remind her the item was a custom piece for their event, therefore it is not eligible for return or exchange, and thank her for supporting the community and the charity.

Greg T.
Murfreesboro, TN

Absolutely, take it back on store credit for $4,500. This was a custom design the store thought was beautiful enough to properly represent the quality of merchandise the store is proud to produce, and it should be something that could be sold out of the showcase. If you custom make something at the customer’s request, it’s all sales final.

Jo G.
Oconomowoc, WI

We have had this happen several times, and the answer is always the same. “No ma’am.” You bought it from the charity, only they can refund your money. It was a donation to the group, and only they can return it. People feel giddy and kind when plied with pretty food and cocktails aplenty, but the reality in the light of day is something else. They want to be big payers in the eyes of the charity, but not in reality. Be kind. Be firm.

Marcus M.
Midland, TX

The obvious and simple answer here is NO. This has actually happened to me before, and my answer is always NO. People that do this are disrespectful and tacky and it makes me sick. They will never be your customer and just want to use you. It’s not your fault the husband bought something she doesn’t like, so how does that fall back on you? Dummies. Is making them happy, losing money and your integrity worth it for someone as unappreciative as this? Absolutely not! You can politely explain to them that it was a custom piece given for free to a charity event and that you’re unable to exchange it. If they can’t accept that, then they need to leave and you need to tell them so.

Tracy W.
Sierra Madre, CA

We’ve had something similar happen on a smaller scale, but with a stock item. The best I would do is to offer to consign the piece. If I can sell it, I will put that amount toward any new purchase. Since this was a one-of-a-kind piece, intentionally created for this event, we simply cannot take it back. Perhaps the woman who received it knows someone who would love it, although pulling it out of her purse is kind of disrespectful. Explain that it was designed for this circumstance and it is not normally the kind of item your store sells. Make doubly sure it is all intact and in new condition before taking it back. Did the charity place that auctioned off the piece have a second or third runner-up for the necklace? If the wife of the auction bidder is willing to take a loss “for charity,” maybe it can be sold this way.

Robin J.
Colorado Springs, CO

I have been down this road! I told the winner that we created the earrings (in my case) specifically for the event and we had no return or exchange privilege. I recommended the recipient re-donate the earrings to the same cause next year. The following year at this same fundraising event, I ran into the above-mentioned winner, and she was proudly wearing the earrings we wouldn’t take back and they had become her favorite pair of earrings!! Funny how things turn out.

Stuart T.
Reisterstown, MD

Under no circumstances should they give in to the request. This piece was designed and manufactured specifically for this event. We once many years ago had something similar happen, except that our customer got a bargain on the piece. In our case, the wife was nasty and rude to us and our help. Like in this case, she tried to make her problem ours. When you give a donation, it is not open to return or exchange, it’s a GIFT.

Lorah A.
Honolulu, HI

The charity piece should have stipulated that it was a special piece custom designed for the charity and regrettably is not available for return or exchange.

Keith J.
Vancouver, BC

Absolutely not. This was a custom piece created for a custom event. End of story.

Peter T.
Show Low, AZ

My knee-jerk response would be somewhere between “no” and “no way in hell!” However, since we have to pretend to be nice to even the most self-centered idiots, a gentler response would be in order. I would thank them for supporting the charity — just like I did when I donated the time, money and materials that it took to make that item especially for the event. If she’s not going to wear the jewelry, she might want to further support the charity by re-donating it back to them, but I would not be able to accept it as a trade-in.

Elizabeth Blair K.
Harbor Springs, MI

When you donate a finished piece, you need a disclaimer! Such as, “This is NOT a gift certificate. this was commissioned and made especially for …” When challenged in this way by an exuberant bidder, I also say that 100% of their generous bid went to the organization and that the organization was the owner of the piece. It has nothing to do with my shop any longer. I think people TRY to push the envelope and actually know better and are just trying to see what they can get away with. Of course, if it is a regular client of yours, I would make an exception and honor the retail value of $4,500. They are writing this off anyway; it isn’t the store’s responsibility. Gift certificates also need to have a very large, clearly stated “use by” expiration date. And finally, try not to make a piece that would not be in your normal inventory.

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Gloria H.
Topeka, KS

“This is a custom-made, non-returnable necklace. The only thing we are able to do is adjust for size, such as adding an extender for a perfect fit!” Then talk up her husband on how generous he was to go above and beyond to help the charity that is near and dear to our hearts.

Bill M.
Granger, IN

As a business owner, there’s not much more frustrating than having your gift horse’s mouth thoroughly examined and rejected. Alas, we live in a political world, and finding a compromise is often the best course. Don’t offer to exchange it … ever. But offer to consign the item at a reduced commission to cover your administrative costs. Prepare a signed agreement that states the ‘net proceeds must be applied as a store credit.’ The auction winner gets a new piece they love and your cash flow is intact as you are simply trading one sale (with a small profit) for another that meets your target margin. Win-win.

Megan C.
Poulsbo, WA

Anytime we donate an item for charity, we always place a disclaimer that the donated item may not be exchanged or returned. If Linda didn’t include language stating her policy, she’s in a sticky position. She needs to be clear with Allison that while she values her as a client, this piece is a custom designed piece that was created for a specific purpose; it cannot be returned or exchanged. However, the situation doesn’t need to be black and white. We try to find ways to say “yes” to clients, even if we want to say “no.” Could the item be placed in the store on consignment? Could Allison pay it forward and donate it to another charity? I’d try to be creative with the client, but I wouldn’t take it back or exchange it outright.

Jeffrey J.
Greenwood, IN

We were faced with a similar situation when a “prize winner” from a charity golf outing tried to exchange a very nice watch we had donated. I pinned him down, and he reluctantly admitted that was a “big ask”! We now with EVERY donation provide a form stating the item is “non-returnable and non-exchangeable”… No problems since! My reply would be to her: Donate it to another charity auction!

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