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Real Deal

When An Unhappy Support Staffer Releases Confidential Pay Rates, A Retailer Is Dumbfounded. What Would You Do?

An unhappy support staffer takes aim at an owner by releasing confidential information.

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As an office manager, Carrie Hannah was competent. As an employee, she was difficult and inflexible. As a team player, she was … well, she wasn’t.

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

Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at kate@performanceconcepts.net

Carrie had been with Jack Marcus Designs for almost ten years. Carrie started as a part-time salesperson, but was moved to the bookkeeping position in her second year when it became clear that Jack could no longer handle the day-to-day office operation along with the design part of the business. It was also clear early on that Carrie’s detail focus was greater than her sales ability.

Jack appreciated Carrie’s loyalty and her ability to keep the store’s paperwork in order. Over time, he trusted her with more and more of the details of the business as he focused on growth and expansion. She always managed to get the job done, but her general attitude had been an ongoing problem. At the root was a simple premise: Carrie hated — and, Jack thought, feared — change in any form. When a new person was hired, Carrie was the first to be critical and challenging. When Jack chose to install a new POS system, Carrie resisted every step of the way. When they moved into their much larger, very cool new location, all she did was complain about things that didn’t work properly and the additional 10 minutes she had to drive to work every morning. He knew that in most cases, she would eventually come around if he just gave her time to adjust, but he also recognized that as the years went on and Carrie got closer to retirement, age wasn’t making the adjustments any easier — and their “spirited discussions” seemed to be getting louder and more frequent.

Things came to a head several months ago when Jack decided to shift to an incentive-based compensation system that would allow all of the company’s employees to benefit from the continued growth at Jack Marcus. Under the new system, salespeople would be paid a base hourly rate plus a percentage of their individual gross profit production, and support staff (including Carrie) would be paid an hourly rate and would earn incentives based on the total company’s productivity vs. goal each month. Support staff incentive percentages were set so that overall, everyone would earn the same as last year if the store produced the same gross profit dollars. Going forward, increases in income would be tied directly to increases in business. 

Jack knew that Carrie already thought she was worth more than she was being paid (she had been grumbling about it for several months in advance of her annual review), but he underestimated the vehemence of her reaction. She was furious over not getting the substantial base pay increase she had expected and was even more annoyed with the fact that part of her income would now be incentive-based. 

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During their conversation, Carrie complained about being undervalued and underappreciated, and she made it clear that she was expecting a lot more. The conversation ended with Jack holding firm but asking her to consider the numbers (as the company was still on a strong growth trajectory) before deciding that the new system wouldn’t work for her. He committed to meeting with her again the next morning to answer any additional questions she might have.

Carrie spent the rest of the day angry and sullen, working at her desk and avoiding any interaction with Jack or anyone else. At 6 p.m., she took care of her usual closing duties and left without a word. When she and Jack met the next morning, she very calmly told him that the new structure would not work for her and said that unless he was prepared to offer her a base increase of 20 percent, she would have to resign. Jack felt he had no choice but to accept her resignation. He told her he would see that her last paycheck was mailed to her home, escorted her back to her desk, let her pack up all of her personal items and walked her to the door. 

That evening, Jack picked up an email from Dennis Healey, his top (and highest paid) salesperson. Dennis forwarded a message that had been sent to all 16 of the company’s employees by Carrie. It said, “As of today, I am no longer a part of the Jack Marcus team. Since you are all having to deal with the impending changes to your pay, I thought I might offer this one last favor before I go. Here’s how you stack up relative to your peers.” She then provided a list of every employee and his or her current hourly pay rate.

Jack was mortified. He had never made any rule about keeping compensation confidential, but he couldn’t believe that anyone thought it was OK to actually discuss pay rates. He didn’t have a fixed standard for hiring, and over the years, he most often just paid what it took to get the people he wanted. That philosophy had worked pretty well for him, as most everyone typically delivered to his expectations — but he couldn’t deny that there was a wide range represented in that list, and he was certain that a number of his people would be more than a little upset.

The Big Questions

  • How should Jack respond?
  • Should he send an email to all of his employees, or should he wait until morning to face them?
  • What is his best course of action with regard to his team going forward?
  • Does Jack have any legal recourse with regard to Carrie’s actions — and if so, is it worth the expense and effort?

Expanded Real Deal Responses

Denise B. Waynesboro, PA

Sorry Jack, but you should have seen it coming. You should have nipped this attitude issue in the bud years ago. A certain amount of flexibility is required from any employee, and that needs to be made clear from the get-go. Coddling this woman for years on end just allowed her to think she had every right to dictate her terms as an employee. I’m not a lawyer, so I won’t comment on the “legal” recourse. Having said that, the “emotional” ramifications are huge. Why should two people doing the same job (at the same level of quality) be paid differently? Eventually, they will find out and somebody is going to be resentful. Give them all the chance to earn well and be up front about their worth as an employee. If the company does well, reward the people who made that happen. If the company tanks, so does their job. People understand that.

Valerie W. Kingston, NY

I would call a staff meeting with all the employees. One, to inform them that you are looking for her replacement, and two, that she left angry and you understand she compared salaries and compensation to each of you. You may also explain that salaries are based on time, individual skills and performance.

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Also, I would set an individual meeting with each employee to hear their personal response and if they have questions as to how they can increase their pay scale. I always value the team working as a team and removing any sore feelings they may have towards each other and you as their leaders.

Bruce A. Sherwood Park, Alberta, Canada

Last question first: Do not initiate legal action. Middle question: Talk directly to his team! This is not an email situation and it deserves his complete and personal response.

Jack should have dealt with Carrie years ago. One team member acting like a petulant child could have been far more destructive to other team players. Jack got off lightly for his resistance to not deal with the issue years ago!

Marcus M. Midland, TX

Oh boy! Carrie was a cancer that Jack knew about years before this happened and he allowed it to grow. And he gave a lot of access to a person that he knew from day one wasn’t a team player? No bueno. If I was Jack, I would wait until the morning and take on any issues and questions then, but I would be prepared for a war. I don’t know exactly what I would do because you don’t really expect things like this to happen. As for legal action, I would definitely look into it. If you have some ground to stand on, then I would pursue it. Carrie sounds like a conniving human being and she did you a horrible injustice. I would make her pay (literally) if there’s some merit behind it.

Ralph H. Richmond, IN

The “boss” needs to be the boss. It appears that Carrie’s attitude has been a problem for a long time. It and she should have been dealt with years ago. Call a store meeting, soon, but not tomorrow. Call your lawyer to cover all bases (follow his suggestions, maybe have him at the meeting). Get an employee manual prepared; everybody signs, including the boss. Deal with discussions of “equality” of pay and that pay level is not discussed. Bring employees into the pay discussion, but decide and live by the choices. Carrie violated informal policies, but likely no liability (an old farmer’s joke about “kicking the cow pie” applies). This is an example of “success” from larger operations bringing larger complications along with larger revenue. If you want the “big store,” be professional about the complications; if not, go back to small! Treat everybody fairly. Do not confuse friendship and employment; they are disparate concepts. As an aside, this applies to customers as well. Don’t be unfriendly, but don’t forget the difference.

Stacey H. Lincolnwood, IL

Jack should have offered her the opportunity to stay at the same pay scale OR choose to opt into the new “package” within the next 2-3 months based on her observations about how it would affect her pay. That said, she quit and violated his trust, and she undermined his position with 15 people he employs, so now he has to fear that the rest of the staff may mutiny. He needs to call a meeting to explain that he will be discussing the situation with a lawyer and let the staff know that if they are unhappy about their pay, he will speak to each person individually about their concerns. He should be prepared to lose the five lowest-paid employees and replace them; they’re sure to leave in the aftermath. The employees who stay should be asked to keep peace by keeping quiet when new hires start. The next bookkeeper should be told that the books are not hers to discuss with anyone else, and that confidentiality is vital.

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Dennis P. Johnstown, PA

What a can of worms. I would approach the bookkeeper with the same attitude as I would someone accusing me of “switching” a diamond. Have an attorney review the issue and determine if any financial damages resulting from the malicious breach of information could be attributed to the bookkeeper. If there is cause, I would litigate for any untimely compensation increases that had to be given for the continuity of the store. Definitely put safeguards of written confidentially agreements in place.

Marc F. Houston, TX

The damage is done for Jack. He should first change all employee emails to prevent further damage. Second, call each team member to understand their mindset, then have a company meeting as soon as possible. In the meeting, he and his accountant should show and demonstrate how this plan was designed with their best interest and the income projections for the company as a whole. The team will either be on board or not and there could be a shake-up; that’s what happens when you just go and flow with key employees like Carrie. Now the learning part: what have you done to maintain control of company communications? What fail-safes do you have to block unwanted transmissions from internal/external actors? Do you have an employee contract addressing confidential company information? Sounds like a good New Year’s resolution!

Cammie M. Ocala, FL

Wow, I’m always amazed as a business owner how you can be so good to your employees and how quickly they can turn on you. I’m glad she was let go; bookkeepers tend to be so controlling because we trust them with everything.

I definitely would meet with the entire staff face to face ASAP, and you’re probably going to have to make adjustments to hourly pay because of her. I’m not an attorney, but I would try legal action for sure, even if it cost you! I would be curious how it was handled and to know Jack’s plan of action to replace her.

Ira K. Tallahassee, FL

Jack’s biggest mistake was not letting Carrie loose a long time ago. Too bad we can’t go back in time. That said, he probably can’t do anything legally, but he could check with his attorney. As to the staff, have a group meeting tomorrow explaining that by working as a team, everyone will make more money. Follow that up with a one-on-one with every member of the crew. Let them vent as they will and explain your old hiring policy. The new way WILL WORK to everyone’s benefit.

Glyn J. Victoria, TX

Jack should send an email to each of his employees and hold a general round table discussion with all present. He should explain why this incident took place and get feedback. Jack should tell his employees that if they were dissatisfied with the way the operation was being handled, they are free to turn in their resignations. They should all remember it is his operation and he makes the rules. He can’t make everyone happy, but he should allow feedback without any repercussion.

Jonathan L.Draper, UT

I would send an email to all the employees and let them know my vision for the future and the fact that they should all make more than they were before based on growth. I would have a follow-up meeting as a group and then individually as needed. You may lose a few employees, but those that see your vision will stay. Anytime you change things, people will not see it your way. That is OK because you need to have unity on the team, and real team players catch the vision of the future. You will find people who fit and will thrive. Change is hard, but if you have a good plan, you can win in the end.

Mark R. Ottawa, Canada

Carry on like nothing happened. Call all employees for a meeting with coffee and donuts. Thank all for being associated with you. Ask each employee in the presence of others if they are happy with their present employment and pay rate.

Listen carefully, and if needed, adjust pay/conditions to the rate of performance. Thank all again and carry on like nothing happened. Make sure the TEAM is happy.


Kate Peterson Tells the Rest of the Story

As many of our Brain Squad members were quick to point out, this whole situation could have been avoided if Jack had dealt with Carrie’s behavior issues early on.  Like most business owners, though, Jack came to rely on the “good side” of a problem employee, and waiting out her bouts of resistance seemed to be much easier than finding, training and trusting someone new.

Jack’s first move was to talk with his attorney.  He learned that it’s a violation of free speech to restrict employees from talking about their own compensation.  Carrie’s distribution of confidential company information might have been actionable, but since she was not under any sort of contract, attempting legal action would likely have been a costly and ultimately unproductive adventure.

Jack’s approach with his employees was an effective one.  In an attempt to avoid escalating emotions, he sent a brief note to everyone that night apologizing for Carrie’s disruptive actions and asking them to reserve judgment till they could all meet the next morning.  Once he had everyone together, he explained, as Valerie Whitworth suggested, that individual pay rates are based on a variety of factors, but that he has always, in good conscience, tried to be fair to everyone.  He also explained that the new system was specifically designed to allow each one of them to share in the success of the business, giving them all essentially unlimited earning potential.  Further, he offered to meet privately with anyone who wanted to discuss the matter or their individual circumstances in greater detail.

What he learned in the meeting surprised him.  He found that despite a few rough spots, the people who were upset were upset with Carrie for her betrayal – not with him.  As a group, they made it clear that they felt that he – and they – had put up with her childish behavior for too long and that they were glad to see her go.

What’s the Brain Squad?

If you’re the owner or top manager of a U.S. jewelry store, you’re invited to join the INSTORE Brain Squad. By taking one five-minute quiz a month, you can get a free t-shirt, be featured prominently in this magazine, and make your voice heard on key issues affecting the jewelry industry. Good deal, right? Sign up here.

Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at kate@performanceconcepts.net.

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Real Deal

A Vendor Raises an Item’s Memo Price After It Is Sold. What Should This Store Owner Do?

The ring was sold for less than the vendor now wants for it.

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GUILD AND STONE WAS a second-generation, high-end store in the Pacific Northwest. Store owner Dean Callen had used his 28 years as the company’s general manager to expand on the strong reputation his father built with an extensive vendor network and a local client base that included most of the town’s VIPs.

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

Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at kate@performanceconcepts.net

Back in April, Sharon Sanderlund, president of a local construction company and one of Guild And Stone’s best customers, came in to talk with store manager Jennifer Lee about finding a pendant to match the fabulous Art Deco citrine earrings she had just inherited from her aunt. Since there was nothing workable in the store’s estate collection, Dean recommended that Jennifer contact Ed Ansell, one of the store’s regular estate vendors who specialized in vintage colored gemstone pieces. Jennifer spoke with Ed and he agreed to memo several pendants for her to show.

The day the package arrived, while it was sitting on Dean’s desk waiting to be opened, Jennifer received an email from Ed letting her know that in addition to three citrine pendants, he had also included a number of other pieces in the shipment, all from an estate he had recently purchased and all on memo to the store. Since the lot was very well priced, he thought she and Dean might want to keep a few of the pieces for stock.

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When Dean opened the package, he was surprised to see that it contained a total of 13 pieces. As he checked them in, he had to agree that the prices were great, but he was further surprised to see that there was one item in the package — a vintage aquamarine and diamond bracelet — that was not listed on the memo. He contacted Ed immediately to report the error. Ed apologized and emailed an updated memo within the hour.

Later that week, Sharon Sanderlund came in to look at the pendants. She chose a beautiful art deco citrine and diamond pendant from the memo and a vintage chain from the store’s collection for a total of $4,550. While she was still in the store, Jennifer remembered the additional items that Ed had sent and brought them out of the safe to show Sharon. Sharon was immediately drawn to a Victorian sapphire and diamond ring — a cushion-shaped sapphire surrounded by 13 Old European Cut diamonds in 18K gold. Jennifer checked the memo and saw that the store’s cost for the ring was $3,500. She checked with Dean, who assigned a retail price of $6,100 to the ring — then promptly sold it to Sharon.

The next day, Dean sent Ed an email reporting the sale of the two items, adding a list of three more pieces from the lot that he wanted to keep for stock and asking for an invoice. Ed called back an hour later to let Dean know that there had been a mistake on the memo. He said that he had mixed up two rings from the estate — that the sapphire in the ring Jennifer had sold was unheated and that the actual cost for the piece was $7,500, not $3,500. He told Dean that the invoice would reflect the $7,500 price. Dean struggled to remain calm and rational while he very clearly explained to Ed that the ring was sold based on the memo price, and that was the price he would pay. The conversation got rather loud as Ed suggested that Dean contact the customer to get the ring back — something Dean flatly refused to do. The call ended with Ed insisting that the ring would be invoiced at the $7,500 price and subtly suggesting the possibility of legal action if Dean chose not to pay.

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Dean remembered thinking that like the rest of the lot, the ring was a great value at $3,500 cost, but he did not believe that price to be unreasonably low for an estate item. In an effort to be fair and to preserve a vendor relationship, he called Ed back the following day and offered to split the difference — to pay $5,500 for the ring. In his view, since the ring didn’t need sizing, that would leave him with a small profit once he paid Jennifer’s commission. Unfortunately, Ed refused to move off of his demand that Dean pay the invoiced amount for the ring. Dean hung up when Ed mentioned that as a professional, Dean should have noticed that the price was not right for a ring of that caliber in the first place.

The Big Questions

  • What should Dean do?
  • Is it reasonable to think that Ed might be right — that someone at Guild And Stone should have noticed that the price was too low for the ring?
  • Should Dean contact Mrs. Sanderlund and explain the situation in an attempt to either recover the ring or to re-sell it at a higher price?
Kevin P.
Newark, OH

When you write down a price on paper or write it in an email and send it, that is your responsibility to be correct. Once a vendor or a retailer gives a price, it is a done deal. In 40 years, I have never backtracked on a sale. A few times, I made mistakes in my calculations, once using per carat instead of net price to figure my cost.

In this case, I would call back the vendor and reiterate your offer to pay the $5,500 for the ring, as well as the second item and buy the three additional items. Remind him of the business you have done and may do in the future and ask him if he is willing to forget that. If he does not agree, I would send the amount he is asking for the two items and return the rest, and ask that your account be closed. There are other vendors who will behave in an honest and straightforward way with integrity.

John T.
Atlanta, GA

It was the vendor’s mistake and the vendor’s responsibility to catch and correct it before the sale was completed. The offer to split the difference from the jeweler was more than fair. Pay the memo price, and not a penny more, then find a new estate dealer; this one is crackers.

Oscar V.
Chicago, IL

Pay what is on the memo.

Stuart T.
Bel Air, MD

I always try to be fair with my trade partners, BUT in this case Ed is being unreasonable. Dave made a very fair offer to split the loss, and Ed refused to bend at all. Dave could have kept the Aquamarine and diamond bracelet but he was too honest to do so. Ed doesn’t have a leg to stand on, so let him sue, and loose a customer as well.

Michael J.
Port Charlotte, FL

I know the fine print on most memos says items are not to be sold until invoiced, but this can be argued since virtually no company actually holds to these words, so precedents have been set. The fact that Dean offered to split the cost at all was more than fair to the vendor, and in my opinion, should have been accepted without hesitation, especially if he had any desire to salvage the business relationship. The fact that Ed vehemently declined the offer means it should be rescinded and a check mailed for the price on the memo.

Albert D.
Fords, NJ

This is cut and dry. The store would only be liable for the original invoiced price. The fact that they were willing to give more was a very generous. I think the original vendor should have accepted their offer, considering that they know the ring was sold.

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Colleen Z.
Hershey, PA

Ed is absolutely in the wrong here. It’s his duty to correctly identify and price his merchandise — and to eat the loss if he makes a mistake. If he ever wants Dean as a customer again, he needs to honor the original price on his memo. Dean should absolutely not let his client know what’s going on — it’s not at all her responsibility to deal with and it ruins the magic of the purchase. If he ends up having to pay the full cost so she can keep her ring and he can avoid legal action, then so be it. However, he should never work with Ed again. Dean went above and beyond to compromise, and Ed clearly doesn’t value the relationship in the same way. If his customer service is this poor, I wouldn’t trust Ed with other items. Dean should contact his lawyer for advice to handle the situation but above all else — keep Sharon out of it!

Jay S.
San Diego, CA

The retailer tried so hard to be fair. The supplier made the mistake and should live with it. When the supplier was not willing to work with his customer, I would have told him to sue me, and then I would have told him to pound sand!

David B.
Calgary, AB

When is a deal a deal? On both ends. Dean cannot go back to his client and ask for more. It makes him look unprofessional. It may even cost him a client. His offer to eat some cost was very fair. The consignor showed no professionalism. And getting an offer to split the difference was very fair. When I was a traveling salesman, this situation happened to me. I did not go back and ask my retailer for more money. I ate the loss and practiced better accounting. Further, the consignor making threats about court action is ridiculous. I know a fight is expensive, but where do you draw the line? Retailers get kicked in the backside at every turn, and even when it is a clear mistake, why are we expected to make it right? Dean needs to hold his ground.

Stewart P.
Lansing, MI

It is truly unfortunate that we all make mistakes in a variety of different ways. With 45 years in the trade under my belt, I can honestly say that I have paid a small fortune for the errors in judgment that I have made in an attempt to retain or strengthen the integrity of my business. I could have paid much less if I had chosen to place blame on others and refused to accept the responsibility. In the instance described, the error was clearly in the vendor’s corner. The retailer was completely blameless and should not be punished. We cannot function if we cannot rely on quotes and estimates from our vendors as written or stated.

Joe K.
Lantzville, BC

A deal’s a deal. The cost on the original invoice is all that should be paid. Looks like Ed is a little lackadaisical in his invoicing. Suck it up, Ed.

Jim G.
Champaign, IL

The ring as invoiced stands correct. If they had picked up the phone and told the new price before the ring was sold, then the new price would be in order. Too bad for the vendor.

Rex S.
Houston, TX

It is basic contract law. The items were sent out on consignment to be shown to a retail customer and allowed to be sold to retail customers based on the offer price listed on the memo. The retailer sold the item to the retail customer based on the price that the vendor sent to the retailer in good faith. It should also be noted that the vendor had previously told the retailer that this lot was an exceptionally well-priced estate lot; therefore, the retailer was reasonable in not questioning the pricing of the items. The retailer absolutely should not be asked, nor should they contact the retail customer, as that customer bought the item in good faith from the retailer and this has no duty to resend that sales contract. In short, the “memo” is in fact an offer to sell, and the retailer accepted that offer.

Norbert M.
Nairobi, Kenya

Especially in gem and jewelry trade, the customer is always right and therefore should not be bothered. Also, why should the initial seller want to unscrupulously transfer his error to his jewelry broker friend? This is wrong! He should accept the loss as his mistake and use the mishap as a future strength-point! Going to a court of law will only break their wonderful business association. Furthermore, 1) the untold truth is that estate jewelry is often bought at extremely lower price to exploit the owners and to sell off fast to make a quick buck! 2) the money involved is too low to cause the fuss considering the long-term business relationships. In a nutshell, for all the parties, let it be what has already been and move on. Hope I don’t sound too blunt!

Jim S.
Kauai, HI

Dean in good faith sold items based upon a written memo price. That the wholesaler made a mistake is not his fault. His offer of a compromise showed integrity and fairness. Ed’s response showed a lack of both.

Dianne H.
Eldon, MO

They must leave the satisfied customer out of the deal. That part is finished. The customer did nothing wrong. Neither did the jeweler. Carelessness by this supplier shows as the one bracelet was not even on the original invoice. Now the jeweler should prepare to get legal advice and not be bullied by the supplier! $10 payment per month FOREVER!

Marcus M.
Midland, TX

Dean should not pay a dime over $3,500. That is the price listed on his memo sheet, and if Ed tries to take any legal action, then Dean has the proof of the price Ed originally gave him. This is Ed’s mistake and should be his loss, not Dean’s. Also, Ed should probably realize how much money Dean was about to send him and be happy that he could probably recoup his mistake. If I was Dean, I wouldn’t do a bit of business with Ed again. There’s lot of estate dealers out there; go find another one who is more professional. And there is no chance I would call a great customer and ask her for the ring back or to pay more money. You would lose her for good if you did something like that.

Joel M.
New York, NY

Estate jewelry is tricky on value. We receive from our dealers and trust them to value the pieces. Thus, the store owner is not liable and his dealer should have taken the offer to split the profit.

Stuart S.
Egg Harbor City, NJ

This is an estate ring and could have just been an amazing value. Dean was very generous to split the difference. If the ring had not been sold, I’m sure Dean would have either returned the ring or agreed to the price. I feel bad for Ed that he made the mistake, but he has nobody to blame but himself. Ed no longer deserves the benefit of the split. Obviously Ed does not have the same respect for their business relationship as Dean!

Jon P.
St. George, UT

Ed’s mistake. Ed should eat the difference.

Tom C.
San Marcos, CA

You live with your mistakes. An error in pricing is the sender’s fault, not the buyer’s. It may affect any future dealings, but so what? If you can’t trust the sender’s memo pricing, what good is it to solicit goods from them?

Bruce A.
Sherwood Park, AB

Dean is required to pay the $3,500 plus applicable taxes. Anything greater than that requires a visit to his lawyer. When the dust settles, Dean should let Mrs. Sanderlund know the incredible deal she received and offer his services to appraise the item. Mistakes happen to all of us, and Dean’s offer of $5,500 was overly generous. Once rejected, I believe a judge would rule in Dean’s favor.

Valerie S.
Champaign, IL

If I’m not mistaken, this was fictionalized based off of my post on the Jewelers Helping Jewelers Facebook group. Fortunately, the wholesaler honored their memo price and we all moved on.

Ira K.
Tallahassee, FL

Let me see if I understand this correctly … The memo said one price, the vendor changed it (doubled), and then Dean offered to meet Ed halfway. Dean is a mensch; and Ed is a _______! (fill in the blank as you deem appropriate). I would send a check for the memo price — I would not buy the other three pieces that looked good and probably not buy anything else from Ed.

What’s the Brain Squad?

If you’re the owner or top manager of a U.S. jewelry store, you’re invited to join the INSTORE Brain Squad. By taking one five-minute quiz a month, you can get a free t-shirt, be featured prominently in this magazine, and make your voice heard on key issues affecting the jewelry industry. Good deal, right? Sign up here.

Continue Reading

Real Deal

A Teenage Girl Steals Silver From a Store, But the Owner Recognizes Her. What Should He Do Next?

He’s concerned about offending past and potential clients if he pursues her.

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OVER NEARLY A century in business, Wheeler’s had become an institution in their small-town community and a fixture in the growing downtown shopping district. Like his mother and his grandfather before him, Ross McGovern enjoyed his role as “the jeweler” in his hometown and was committed to both the traditions that sustained them and the innovations that would enable future growth for the business.

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

Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at kate@performanceconcepts.net

Ross and his sister Nicole worked hard to maintain merchandise that was moderately priced yet fashionable enough to keep town residents shopping locally. In addition to a strong bridal business, they’d built a significant fashion presence that included a variety of national brands across a broad range of price points, and had introduced some trendy fashion items directed at young women in the community. Most Wheeler’s customers had been doing business with the store for at least two generations.

In the past year, Ross had overseen the completion of two major projects for Wheeler’s. First, after several years in development, the new Wheeler’s website had launched the previous February. The new site offered a full range of “bells and whistles,” and, thanks to the advice of his 16-year-old daughter, was fully e-commerce enabled. While they hadn’t yet sold much from the site, both Ross and Nicole were pleased with the increase in foot traffic. More significantly, Ross had spearheaded a long-overdue renovation of the store interior that was finally finished in June. Designed by a local architect, the new store included an updated layout and showcase design, a state-of-the-art, visible-to-the-public-shop for his three jewelers, and a good amount of “experience space” for lower-end product that customers could touch and try on without help from a salesperson.

One particularly busy Saturday morning, Ross was working with a couple at the engagement ring counter, Nicole was in her office meeting with a diamond vendor, and their two salespeople were tied up with repair customers when three teenage girls came in. Ross acknowledged them, and they asked where they could find the silver and gemstone necklaces they’d found on the Wheeler website. Ross directed them to the tabletop display across the store from where he was working. They clustered around the table, trying on several necklaces and bracelets.

Trying to keep an eye on things while not distracting his diamond customer, Ross looked up and thought he saw one of the girls slip a piece of jewelry into her purse.

Ross was just at the point of closing his sale and the other two salespeople were still tied up at the service counter when the girls abruptly turned to leave. Rather than derail his diamond sale and make a scene over the $100 item that might have been stolen, Ross decided to deal with it later. He was sure he recognized one of the young girls (not the thief) as the daughter of a regular customer and golf buddy, and thought that if there really was a problem, a simple call to her father would easily remedy the situation.

After the store closed for the day, Ross and Nicole sat down to review the security video. As he suspected, one of the girls did, in fact, drop a silver and amethyst necklace into her purse, along with the matching bracelet. Ross was sure that he’d met one of the other girls at the club with her father. Nicole also recognized all three as classmates of Ross’s daughter and her son at the local high school, though she didn’t know their names. They went home with a plan that had Ross contacting his golf buddy in the morning.

Once he got home, however, Ross began to have second thoughts about the plan. He wondered how he might react if a store owner called him with the same kind of information about his own daughter and her friends, particularly if she denied any knowledge of the situation. He considered showing the video to his daughter and nephew, asking them to identify the actual thief, but then considered the consequences associated with putting them in such an awkward position. Talking to school administrators to get an ID was a possibility, but involving them would most certainly get the girl at least suspended from school and get him labeled as some sort of villain among parents. Of course, he could go directly to the police, but if he was going to be honest, he’d need to identify the girl he knew, running an even greater risk of creating a difficult situation with her family.

He found himself torn between the desire to do the “right thing” — deal with the theft directly to recover the merchandise and avoid the label of an “easy mark” — and his concern over the possibility of putting his kids in a difficult position and offending a social acquaintance and longtime customer of the store along with countless other parents in the community. He finally fell asleep that evening wondering if he should just let the incident go, thinking that there was no way this situation ended well for his business.

The Big Questions

  • Should Ross approach the father of the girl he recognized and tell him that his daughter has been hanging out with a thief?
  • Once he knows who she is, is it appropriate for him to contact her directly?
  • Should he involve the school or the police?
Ila  S.
Block Island, RI

I had similar situation. I contacted the girl privately and let her know exactly what was on camera. In an effort to HELP HER, I told her to bring back what she took and it would stay between us — no police, no parents, etc. I treated her seriously, but kindly. We met the following day.

She did return the item and we had a good talk at the ice cream shop next door (my treat).

This was a turning point for this kid; we are on good terms years later.

Steve L.
Irmo, SC

Contact her father and ask for him and his daughter to visit your store after hours to discuss a matter. Show them the video and let dad take over. We actually had this happen on a $5,500 piece about 15 years ago with a teenage young lady whose family shopped with us. We knew the family well, and they became even better customers after this. The young lady matured into a wonderful woman, and we later sold her fiancé her engagement ring.

Ralph H.
Connersville, IN

If there is no question that the camera images will identify the thief, the store owner should call the girl he knows and perhaps the father. Ask them to stop by, as there is something they should see. Let the tape speak for itself. They would know that their friend stole the items without the owner making the accusations. Just say, “I need some help here. If the items are returned within 24 hours, I’ll consider the case closed; if not, I really have no choice. Any help would be appreciated.” Everyone gets a “way out,” even the thief. Maybe you keep a kid from a life of crime? Oh, and put the darned jewelry back in locked showcases (don’t ask how I know this).

Jim G.
Champaign, IL

Have the police view the camera video. Let them handle the whole thing; they are the law. The school will allow them to identify and push the girls to confess. This type of shoplifting must be dealt with now. If left to go on longer, it becomes a serious problem for retail and society.

Chris J.
South Milwaukee, WI

As a jewelry store owner and a father of four kids who are often in the store, I would contact the police to report the theft, provide them with the video and what information I could, and let them contact the parents. If my children were involved in such activities, I would want to be made aware and take action before the scenarios worsened. We’ve all seen the unattended and undisciplined wiping their noses on our glass cases!

Kevin P.
Newark, OH

I would contact the school administration. I would show the principal the video, then identify the student. I would then ask the school to announce that a student took jewelry from a local jeweler, and the jeweler has video of the incident. I would offer that if the student returns the jewelry within one week, no charges will be filed, and the student’s name will not be revealed. Otherwise, the authorities will be contacted and they will follow up as they must.

This way, the student(s) can learn from the situation without the harsh consequences of the legal system, the other students all realize they cannot get away with stealing from Wheeler’s, and the customer relationship is preserved.

Pushpa R.
Marrero, LA

In this incident, I would talk to the girls directly and let them know of their behavior. Tell them you have video of this incident as solid proof, and to kindly return the jewelry within three days. If not, turn in this recording to police. In the future, these girls won’t have sticky fingers.

Jim W.
Fergus Falls, MN

Your fault since the merchandise was not secure. It was a temptation to the young girls. Just write it off as mysterious disappearance. You can’t win going after the girl. Forget it.

Janne E.
Cocoa, FL

Take the video to the police and let them track down the thief. They’re the ones with the resources to identify people. That way it’s not “personal”; it’s a store owner recovering stolen merchandise and making sure future potential thieves will think twice.

Stan G.
Charlotte, NC

I would get a positive ID on the perp and send her parents an invoice for the stolen jewelry along with a thumb drive of the video of her “in action.” A nice note saying you’d rather not get the police involved for a petty juvenile crime, marring her record, but need to recuperate the loss incurred at the hands of their daughter.

I have a feeling they send the daughter in there personally to “settle” the transgression. Oh, and make it clear only a payment will suffice. No worn and returned jewelry will be accepted.

Marcus M.
Midland, TX

Ross needs to do what is right and that’s find the identity of the thief and call her out. If he does nothing, he’ll beat himself up over this for years. More importantly, he’ll be doing this young girl a disservice. If she doesn’t get called out now and pay the price, then what’s next? He has a chance to possibly right her ship here, and he needs to put his worries aside and do what’s right. I don’t think there is a need to call the police and school, but he needs to call her out directly and make her parents aware of it as well. Our nation is losing its civility and it’s because of kids like this getting let off the hook. Hammer down and make her pay for her actions. She’ll thank you — maybe a ways down the road — but she’ll thank you.

Glyn J.
Victoria, TX

I believe the owners should ask the father and daughter to the store to view the video. Then explain he would like to have the property back and all would be forgotten. The father might be very upset with you, but explain the results that could take place if this was left unattended. Do not mention the future happenings that could take place if the stealing continues unchecked.

Bryce H.
Emeryville, CA

Ross should first try to identify the girl by going through their kids. Once he has that info, he should reach out to the girl directly to ask her to do the right thing and return the items. If she denies or refuses, he can show the video footage, but at that point, he needs to escalate by contacting the school. He should also find some way to secure the “play area,” just in case something like this happens again. This is a good lesson, for Ross and Nicole and their children.

Troy L.
Irvine, CA

Do the right thing, or this behavior will continue. I would show my kids, so they know who they are not allowed to hang out with and can help me identify them. Once I know who it is, I would call the parents or guardian and explain the situation and how they have her on video and that they please have a chat with her and to return the item promptly. If that fails, go to the police, as then the parents need a lesson!

Daniel S.
Cambridge, MA

Police. He should go to the police with the tape, show it to them and let them deal with it. The girl needs to be taught a lesson, and she isn’t going to jail over this. It also keeps him away from all of the personal stuff. He can just say to anyone who asks that he didn’t know/recognize the girls and that he gave it to the police to handle. They weren’t there during school hours, so it isn’t truly a school issue. But it is a police issue. If the girls were over 21, would he be worried about going to their college administrations?

J. Dennis P.
Johnstown, PA

I would contact my insurer, ask their thoughts and explain that my plan was to contact the parents. Full disclosure and transparency are necessary here. There’s a life lesson here for all three girls involved, which in itself would be valuable from here on out.

Stacey H.
Lincolnwood, IL

Ross should show his daughter the security video and ask her to tell him the girl’s name and get her phone number. He can call the perpetrator and tell her that he has video of what she did, and to come back in immediately to return what she stole, or else he will call the dad and show him the footage in front of the police. If she refuses, he should call her dad, ask him to come in to see the video and pay for the theft. (Leave out the police.)

Buddy B.
Wynnewood, PA

This is a dammed-if-you-do and dammed-if-you-don’t situation. I would show video to local police and get their opinion. It’s a shame to soil a teenager’s reputation and shame her, but if you do the crime, you do the time. The police will be a good source of information and may have had this happen before. If you handle it yourself, you risk an outcome that you might not like.

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Real Deal

A Client Wants a Refund and Their Trade-In Back — But It’s Already Sold. What Should the Owner Do?

The client is threatening legal action.

mm

Published

on

JEFF MILTON, OWNER of Infinity Jewelers, loved his new location. Just eight months ago, he and his brother Andrew moved their third-generation store from its 25-year home in a dying mall to a great corner spot in their town’s newest outdoor lifestyle center. Though a number of their longtime customers flatly refused to make the move with them, the new location came complete with great visibility, walk-by traffic and exposure to a whole new clientele.

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

Kate Peterson is president and CEO of Performance Concepts, a management consultancy for jewelers. Email her at kate@performanceconcepts.net

Jeff and Andrew worked hard to make the most of their new visibility and took care to create attractive vignettes in the display windows that dotted their storefront. Since the move, they’d actually made several significant sales to first-time customers whose interest was drawn to Infinity’s windows on their way to the coffee shop on their left or the women’s fashion clothing store on their right.

One morning in early July, Joel Greer, a prominent local attorney, stopped at one of the windows as he was walking past the store and looked at the magnificent ruby and diamond ring Andrew had just put on display. Mr. Greer had never shopped with Infinity before, but he was impressed by the bright, rich color of the ruby and he thought the ring would make a perfect 25th anniversary gift for his wife. When he went inside to take a closer look, Jeff explained that the ring was 18K white gold, and that it contained a 2.10-carat Burmese ruby accented by two oval cut diamonds, both G color and VS2 clarity, weighing 0.75 carats each.

The price on the ring, $27,700, didn’t seem to bother Mr. Greer, but he did ask if Jeff would consider taking an 8.00-carat diamond bracelet his wife no longer enjoyed wearing as a trade-in. Jeff agreed to look at the bracelet, and Mr. Greer brought it in the next day. The bracelet had been purchased at a reputable local competitor and was in keeping with Infinity’s quality standards, so Jeff agreed to take it in trade for a $6,000 credit toward the ruby ring.

A bit concerned about his wife’s track record of not liking his jewelry gift choices, Mr. Greer asked about Infinity’s return policy. Jeff explained that it was Infinity’s policy to take the best possible care of their customers — and that if Mrs. Greer were unhappy with the ring for any reason, he could bring it back for a refund or exchange. Satisfied that he was making a good choice, Mr. Greer left the bracelet, paid the difference and took the ring home.

Nearly five months passed, and it was just before Christmas when Mr. Greer and his wife came back into Infinity, complaining that Mrs. Greer was not at all happy with her ring. The diamonds looked dull to her and the white gold mounting had begun to yellow. She had taken it to another local jeweler (the one who had sold her the bracelet that Infinity had accepted in trade), where she was told that “good quality white gold” should not be changing color, especially so soon after purchase. She was also told that the reason for the diamonds’ dull appearance was that they were inferior in color, and the manufacturer failed to polish the setting under the diamonds. In addition to all of that, Mrs. Greer really did miss the diamond bracelet her husband had traded in. It was a present for their tenth anniversary, and though it was much smaller than the jewelry she typically wore lately, it still held a good deal of sentimental value for her. Though she and Joel had discussed the possibility of trading it in before he bought the ring, she really wasn’t ready to give it up. She wanted her bracelet back.

When Jeff explained that the Infinity return policy covered the purchase for 30 days, Mr. Greer reminded him of his stipulation during his sales presentation that if Mrs. Greer was not happy with the ring, he could bring it back for a refund. He noted that there was no mention of a specific time period associated with the refund policy, and since he was given nothing in writing to spell it out, his request was well within the bounds of reason.

Jeff felt that he needed to defend the quality of his merchandise, especially after learning in conversation that Mrs. Greer did wear the ring daily, including during the two hours she spent each morning swimming in the health club pool. In addition to discussing the impact of chlorine on gold, he also had to explain that Mrs. Greer’s bracelet had been sold out of Infinity’s estate showcase several weeks ago.

In an attempt to resolve the already dicey situation, Jeff offered to take the ring back and refund the Greers the full purchase price by check.

The Greers were not at all interested in Jeff’s explanations or his offer. All they wanted was to return the “inferior quality” ring and to get their money — and Mrs. Greer’s old bracelet — back. Mr. Greer stated emphatically that Jeff had no right to re-sell the bracelet, as his offer of a refund was left wide open. He demanded that Jeff contact the customer who purchased the bracelet and get it back, threatening to marshal his resources in legal action and in community influence if Jeff did not comply.

Stew B.
Natick, MA

And this is why I have my return policy on an 8 x 11 engraved plaque, clearly printed on my receipts and printed under the signature line on the credit card slip. Had the store done this, they’d be able to point to the agreement the client signed. Now it’s “he said-she said.” But, the scenario got me thinking. I have to develop a written policy to reflect the disposition of trade-ins used as tender and print that on store receipts as well.

Barbara W.
San Diego, CA

I am so sorry, Mrs. Greer, that you are not happy with the purchase and trade-in deal your husband worked out five months ago. I wish you had brought it to my attention sooner.

Let us make a new setting in platinum. The metal will not yellow and we will let you look at the mounting before setting the stones to ensure it is up to your standards. Please feel free to come in at your convenience for inspection and cleaning of the ring whenever you feel like it, as diamonds are natural oil and dirt catchers. Even hand lotion can dull a stone. I was not aware you were a swimmer. What a great way to exercise.

Secondly, as there is nothing we can do about the bracelet since it has been sold, I would love to get similar bracelets in to look at, so you and your husband can pick one together. I will work out the financial aspect with your husband. We both want you to be happy.

Ira K.
Tallahassee, FL

The sale is gone.

Joel and his wife are unreasonable to think that the trade-in will sit in a vault forever, and Jeff’s offer for a full refund is as good as it will ever get. In fact, it’s more than he had to do.
In the future, when buying off the street (and yes, trade-ins are considered a buy by the police), the owner signs off the rights of ownership when the jeweler fills out the proper paperwork.

Stan G.
Charlotte, NC

No obligation of a refund here. One bad “customer” isn’t going to ruin their reputation. As far as a repeat situation goes, I wouldn’t do anything differently to avoid that. Touchy situation with the trade-in (and resold) bracelet, but:

1) If someone threatens legal action, I would say “see you in court, now please leave my store.”

2) Five months passed … what do the Greers expect? If she really loved the bracelet, the idea of a trade would never have happened or she would have been in the store to recover it immediately if he had acted without her knowledge.

If the Greers were decent people, I’d bend over backwards to “rewind” the deal and offer a premium credit or refund to the buyer of the bracelet and get it back. Since they are not decent people, anyone they know probably already realizes that and I’d let three generations of happy customers stand up for my reputation versus one miserable couple.

Drue S.
Albany, NY

First and foremost, they must have the return policy printed on their receipts. We do and that eliminates any customer coming in after 30 days. If a client is being very difficult, we may allow an exchange after 30 days, but only if the piece truly was not worn. We stipulate that on our receipts also.

In this case, I think it’s unreasonable for the purchaser to expect the store to hold the bracelet indefinitely, and unfortunately, since it’s been sold, now what? The owners put together another bracelet and give the money back? Also, since the ring shows wear and tear, the clients are being unreasonable.

This one is a puzzler! And one that may require a lawyer. Do any of us get to borrow a car or any other large purchase for six months?

Bruce A.
Sherwood Park, AB

This issue pivots around the sales receipt provided to Joel Greer at the finalization of the original sale. It should have indicated the two distinct parts of payment, cash and credit for the bracelet, with the latter succinctly covered by stating that it was now the property of Infinity Jewelers. Jeff is being more than reasonable with his offer of a full refund, well over what his state may require under their consumer laws. Worrying about defending the quality of his merchandise is a battle not worth fighting; however, battling this unreasonable customer is! If it means a day in front of a judge, Jeff should step up to that plate. If it is the Better Business Bureau, his very reasonable offer will stand him in good stead, as will a social media response if the Greers choose to go that direction. He needs only to tell his incredible offer in the same reasonable tone that he has employed thus far.

Marcus M.
Midland, TX

Jeff is not obligated to refund these animals and there is no way he can save the sale, but he can definitely save his reputation. This clown “Mr. Greer” is an unreasonable bully who is using his attorney power to intimidate Jeff. Jeff should stay firm in his return/exchange policy and with the sale of the bracelet to another customer. This jerk is trying to get him to cave and Jeff needs to show some backbone and stay strong. FIRE THE CUSTOMER! Mr. Greer might threaten a lawsuit, but I really don’t see how he has much ground to stand on. From now on, though, Jeff and Andrew are unfortunately going to have to put everything in writing. It stinks that this is what business has come to, but it’s because of bullies like Mr. Greer.

Barbara P.
Conroe, TX

Oh, how many scavengers are out there today. In my opinion, Jeff has no obligation whatsoever to refund anything to this man who touts that he is an “attorney.” The ring has been worn for five months, whether she swam in it or stuck it in a box in her closet. It can no longer be sold as new. And as far as the bracelet, he had no obligation to sit on merchandise that was traded in, as he has to replenish his merchandise as well.

I would not accept the ring back. I would not offer to try to sell it for him because it’s a losing situation. If he knew his wife loved the bracelet so much, he should have just bought her the ring and left the bracelet at home.

I would tell the guy, “I’m so sorry you made the decision to bring in your wife’s bracelet to trade. I was not required to hold the bracelet, and that was not in writing, either.”

Alan P.
Wilmington, NC

He messed up by not explaining the return policy. He will never forget it again. He should make a new bracelet and offer to give that to her or try to buy back the old one ASAP.

Joe D.
Columbus, OH

Unfortunately, the retailer sounds like he’s going to eat this one. He made an exception to the standard return policy as a condition of the sale. So he is right to take the ring back. As far as the bracelet is concerned, however, I think you could easily argue that they accepted the bracelet’s value as part of the sale as well, and there was no promise of returning it as part of the return. So writing them a check for the full sale amount (including the trade-in value of the bracelet) is correct. They might want to contact the buyer of the bracelet and offer to replace it with a new one of comparable quality at no charge to get out of this mess, but depending on what they sold it for, that could be an expensive remedy, just to save themselves from the bad reviews.

Buddy B.
Merion, PA

The customer is always right. However, in this case, the client is dead wrong. There is no jury that would find the jewelry store liable; I would defend to the end.

Gregory I.
Johnson City, TN

The receipt must have in writing the return policy. Also, a clear dialog with the customer about how long they will hold the trade-in piece in case the purchase is returned; usually the length of the return timeframe.

Gabi M.
Tewksbury, MA

If there isn’t a return policy and no customer signature on said return policy, then there is no argument. Even when a business has a perfectly clear policy list, customers still try to find loopholes. There’s no excuse to not have one in this day and age. If I was in Jeff’s position, I would do my best to get that bracelet back, issue a refund, and take the loss. After that, I would create a thorough policy list and make sure it gets printed and signed with every future transaction.

Dennis F.
Poughkeepsie, NY

Jeff cannot go back to the purchaser of the bracelet. Did he refund the original price of the ring less the $6,000 credit for the bracelet or the full amount? Jeff should request the matter go into mediation. If that fails, he should get a good attorney. This is a classic example of balancing giving a customer too much information versus not. He definitely should have discussed and written his return policy and made it clear that the bracelet was going to be resold.

Tim W.
Yorktown, VA

I believe that the store owner was well within his legal rights to sell the traded bracelet. It was obviously held long enough to cover any normal return and sold to recoup the money that was not paid for the ring. We would have returned the entire purchase price and this was right thing to do.

Now, he could find a diamond bracelet that was equivalent to the quality that was sold and offer it for a price that would not generate much profit to try to satisfy the new client and try to keep it close to the traded value. The customer could use the traded money received to buy it back. In the end, he was refunded more than what was paid, so there is not any loss on the customer’s behalf. We would never contact the estate customer and ask to buy it back.

Steve W.
Clearwater, FL

Obviously, the jeweler in this case did nothing wrong and the client is being totally unreasonable. For him to expect the jeweler not to sell the trade-in bracelet is unreasonable, and furthermore, no one would ever contact the client that you’ve already sold the bracelet to and ask for it back. I think he went above and beyond just to refund the ring after six months. On his receipts, he should have his return policy clearly printed out.

Ralph H.
Connersville, IN

The key word here is “attorney”. Hire this bozo to file a major libel suit against your competitor and make that part of the deal. He’s already given you all the evidence you need to prove financial loss and loss to your reputation (and the competitor lied). Whether or not you are required to comply with these ridiculous demands depends on the law in your state and how much of a fight you want. The bigger the sale, the more important the “notice of policies.” Better put up signage, and add your “policies” to stationery, sales slips, repair envelopes, etc. and have customers sign them, especially on a big sale. Of course, this is not “right,” but we all screw this up sometimes; hindsight’s 20/20. Oh, and can this customer mess you up in court? You better believe it. Good luck; maybe this is not such a friendly town after all.

What’s the Brain Squad?

If you’re the owner or top manager of a U.S. jewelry store, you’re invited to join the INSTORE Brain Squad. By taking one five-minute quiz a month, you can get a free t-shirt, be featured prominently in this magazine, and make your voice heard on key issues affecting the jewelry industry. Good deal, right? Sign up here.

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