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Real Deal

Real Deal: The Case of the Costly Mistake

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THE CASE OF THE

COSTLY MISTAKE

An in-house jeweler damages a diamond while setting it. The clients leave happy, but how does the store handle the jeweler and shop manager?

 

This article originally appeared in the November 2016 edition of INSTORE.


Melissa Lawrence and Nick Moss had been together for nearly 15 years before finally deciding to make their relationship official. Nick knew that Melissa had a specific vision of what she wanted for her engagement ring. Though they were both ardent online shoppers for most items, they agreed that their engagement ring was too important to be ordered with a click, so they set about researching the best fine jewelry stores in their area.

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The top store on their list was Winchester Jewelers, a third-generation, family-operated business that had an outstanding reputation for quality and service.

EDITOR’S NOTE

Real Deal scenarios are inspired by true stories, but are changed to sharpen the dilemmas involved. The names of the characters and stores have been changed and should not be confused with real people or places.

They went to the store one Saturday morning where they met Anne Perry, one of the three Winchester siblings currently running the store.

Nick and Melissa felt instantly comfortable with Anne. She began by talking with Melissa about the style of ring she wanted and quickly helped her zero in on the perfect style.

After doing his homework, Nick was specific with his diamond requirements. He had seen one listed on Winchester’s website that seemed perfect. It was a 2.02-carat round, F color, VS2 clarity with a GIA report and an “excellent” cut grade. At slightly over $27,000, Winchester’s price seemed competitive.

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The 2.02 round Nick saw in the listing was sent on memo from Winchester’s supplier and was ready to show when he and Melissa arrived at the store Monday. The diamond was everything they wanted, and the sale was closed. The price including the platinum halo ring Melissa chose was $32,560. Anne promised to have the ring ready Friday.

The job was completed Thursday afternoon, and when it was handed to Anne for approval, she noticed a hazy film on the diamond. She knew what had happened but checked with the diamond cutter Winchester used to confirm her suspicions. The stone had been “burned” during the setting process.

The diamond had been set by Winchester’s master jeweler, an old-school craftsman who was trained to use the laser machine in the shop, but who steadfastly held to his preference for traditional hand work.

He told Anne that he needed to redo the platinum prongs on the ring to secure the diamond properly and that he had to do the prong work with the diamond in the ring because it “wouldn’t fit otherwise.”

The ring had been finished by the shop manager, who said that he didn’t think it looked 100 percent right but assumed that the diamond just “wasn’t good quality or had fluorescence or something.” Anne was mortified, both over the prospect of an upset client, and over the obvious issues in her shop that would allow something like this to happen.

Anne’s priority was to take care of her client. She contacted Nick, explained that the diamond had been damaged in setting and promised to get another diamond, 2.02-carat or larger, with identical quality specifications. He was disappointed with the delay but impressed by Anne’s honesty and willingness to make it right. He and Melissa picked up their new ring (with a 2.05, F, VS2, ideal-cut center) 10 days later and were more than pleased.

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Since the damaged diamond was a memo item, Winchester had to buy the stone from the vendor. They had it re-polished (requiring a 2 percent weight loss to maintain its cut grade), taking it down to 1.98 carats, and sent it back to GIA for a new quality report. All in all, Anne estimated that they now owned a 1.98-carat diamond they would need to sell at a loss, in addition to having made very little on the replacement diamond and ring that was sold to Nick and Melissa. While this was the most costly error she could remember, Anne was well aware that the frequency of quality problems in the shop had been on a steady rise over the past year.


THE BIG QUESTIONS

1. What safeguards can be put in place to avoid the series of events that caused this problem in the first place?

2. How should the management team deal with the jeweler?

3. Should either the jeweler or the shop manager be held financially responsible for the loss to the company?


EXPANDED RETAILER RESPONSES

 

John P.

Bend OR

A jeweler does not think like an owner. Seems the jeweler brought up to Anne that the stone would not fit and new prongs would be needed. Both should have known putting a torch to a platinum piece will frost your diamonds. The safeguard was there as is evidenced by the jeweler bringing this to the owner’s attention. Her not knowing what to do with the information is the problem. If the owner knew her jeweler does not like using the laser, she should know better than giving him work that can only be done with a laser. Fire him? No! Hire a younger replacement so he can train him and send the younger guy to as many classes as you can find to get him the skills you need.

Does your jeweler or shop manager participate in profit sharing? Are you compensating them well enough where having them pay for this mistake wouldn’t cause them to find another job? Can you really pin this on either one of them? Maybe you could purchase insurance against such costly mistakes? Jewelers Mutual has a “workmanship coverage” that would cover up to a $10,000 loss after the customer’s $1,000 deductible. … Just an old bench jeweler who couldn’t get compensated for what I did or what I knew.


Roxanne P.

Stratton Mountain, VT

Allow the master jeweler to execute only certain types of jobs if he is not going to use the laser. Find a class and offer that the jeweler may take it at the cost of the store.


Tina S.

Burnsville, NC

I would be very disappointed in the jeweler and the repair manager because they did not come forward and just say what went wrong. But I know the store has insurance to pay for this. Just a cost of doing business. Just pray it does not happen much.


Ira K.

Tallahassee, FL

You can’t hold your employees financially responsible, but they should get a strong lecture.


Tyler K.

Manchester, IA

If your bench jeweler consistently has issues, perhaps it’s time to start delegating the harder jobs to someone else. Working on jewelry is not an exact science, and your jeweler is only human.


Amy C.

Tulsa OK

The very first thing to do is set a rule that all platinum jewelry (with stones not removed) MUST be worked on using the laser. It is far too expensive a tool to be sitting idle during a job like this.


Shevvy B.

Louisville, KY

Both should split any losses to the store. I am assuming that this loss was turned over to their insurance for payment?


Jeff N.

Brownsburg, IN

Let’s face it: The jeweler was good for them for 30 years. Sometimes as a owner you just have to take the good and the bad. If anything, I would give the jeweler a private talk to help him get over his frustration and regain his confidence.


Kim N.

Webster, TX

Unless you have a clear understanding contract of who is responsible for the damage, it’s pretty much the store taking the loss. Check with your insurance company.


Alexander R.

Brockton, MA

The only thing to do is to take that individual off of platinum and assign all platinum jobs to a laser person. If there is no laser person on staff, than it should be sent out. That should be the responsibility of the shop manager to assign jobs to the person with correct skills, even if the correct person is not on staff.


Aida L.

St. Michaels, MD

The statement “most of the time” tells me it’s time to say goodbye to a longtime employee. After 30 years he knew that the chances of damaging the stone were high and that doing the work and not alerting someone as to what had transpired to the stone is just dishonest.


John W.

Jersey City, NJ

The answer lies in the last sentence of this story: Since the quality of the shop has declined steadily in recent years, a change in personnel is required in order to maintain the reputation of the store.


David O.

Gettysburg, PA

Shame on management for not insisting the jeweler use modern techniques. Furthermore, re-tipping a brand-new setting is not ethical, no matter the deadline. Even then, why did everyone wait until the last minute to get this job done? Maybe management was trying to put 10 pounds of diamond into a 5-pound setting?


Stuart S.

Galloway, NJ

The REAL issue is that the jeweler KNEW he damaged the diamond and didn’t bring it to anyone’s attention at the time of this unfortunate incident. At this point it comes down to his existing skills and a willingness to grow. If either is a question, it’s time to think about moving on in a different direction.


Stuart T.

Bel Air, MD

When I first started in this business, the store owner (who was also a bench jeweler ) gave me a platinum diamond ring for me to put new prongs on. This was well before the invention of the laser. So what happened? Of course, the diamond got frosted by the high heat. New to the business, I didn’t know that this would happen, but the store owner should have. Fortunately, he took the blame, or I would not be here today. Similar to this situation, did the jeweler know? Did the shop foreman know? Did the owner know? There is plenty of blame to go around. Knowing that the jeweler was old-school and would use a torch, Anne as well as the shop foreman share responsibility. IF the shop is important to you as it now functions, then I would take responsibility for the loss, have a meeting with both the jeweler and the shop foreman and explain what happened, why it happened and what it cost the store.


Jane Z.

Great Neck, NY

There seems no way to avoid such incident except that the setter needs to buy insurance for setting expense items. Similar practice should apply to diamond-setters as to medical doctors for we are human beings.


Marcus M.

Midland, TX

I would definitely have a chat with all members in the shop and tell them if mistakes keep happening then it’s going to start coming out of their pay. I know accidents happen, but if it’s on the rise then something needs to be said. Can you give them incentives to not screw up? Maybe give them several reasons to pay more attention and not botch their work? And I get that the jeweler likes his old-school methods but I’d find a way to push him towards using the laser. Maybe he’s not comfortable and needs more training with it?


Michael M.

Little Rock, AR

Evaluate the timeframe since losses started to occur until today. If the total net profit generated by the mistake-maker exceeds the the loss, discus the issue but without jeopardizing the relationship. If not, obviously then it’s time to let that person go.


Daniel S.

Cambridge, MA

I don’t believe you ever charge any employees for mistakes made in working on something you’re selling. Since I have been selling stuff made only in-house for over 30 years and have had numerous employees (who have screwed up many things), I can assure you that it is not the right way to do business. (It scares the hell out of the other employees, if nothing else, which isn’t particularly effective: They just screw up more then). The loss is always on the owner.

That being said, the bench jeweler should be fired immediately. IMMEDIATELY. If he doesn’t know that you can’t use platinum solder around diamonds then he’s a complete idiot, especially when a laser welder was available. Plus he didn’t see the damage after he did it. Did I say IMMEDIATELY?

As for the shop manager he could use some time in some educational programs so he knows what he’s looking at, and when he’s unsure he should check with someone else.


Kevin L.

Naperville, IL

Figure out what the actual loss will be and offer to have the jeweler pay, even if it is through a payment plan. If he balks and pouts and gets defensive, let him go. Your reputation also was damaged. Even though the customer was taken care of, there is a mark now. Future referrals could be affected not counting the thousands you lost in profit.


Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at [email protected].

 

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