If you are a fan of Aretha Franklin, you may remember her hit song from 1971, “Until You Come Back to Me” (by the way, if you are not a fan of the Queen of Soul, I’m not sure we can be friends). At the moment, I can’t get this song out of my head, and its all due to an unfortunate jewelry story, that of course, has a happy ending.
My neighbor’s son bought an expensive engagement ring from a jeweler in his home town, and sadly, a few weeks later, the engagement was broken off. Confident in the knowledge that diamonds are a great investment, he took the ring back to the store where he purchased it, only to be told that the best they could do was to refund half his money!
The young man, now disgusted with all things jewelry, called me for an explanation and some guidance. I knew the store where he bought the ring and said I’d make a few calls.
“Yup, that’s our policy,” the store owner told me when I finally got him on the phone. “We’re not in the business of loaning out jewelry and we don’t want to encourage returns. It says right on our sales slip that all sales are final.”
I thanked him for his time and thought I’d get a second opinion on the matter. I called a friend of mine who is one of the sharpest retail jewelers I know, gave him the scenario, and asked what his policy is and what my young friend should do.
“You know what my biggest expense is?” my friend asked.
“Your condo in Aspen?” I asked, acknowledging his success.
“Close!” he said. “But the truth is, it is the cost of making a new customer. All the advertising we do, all the sponsorships, all the events and marketing, its not for our existing customers, they already shop here. It’s to attract new customers! And, here is this jeweler, who was lucky enough to have a new customer, but with his idiotic offer of half your money back, not only lost this customer, but probably ruined him for the rest of us forever.
“Obviously, we handle situations like these on a case by case basis. In this case, I would have told the young man that for the diamond, we can offer a 100% refund in the form of a store credit, and for the gently worn custom mounting, there would be a modest return fee of some sort.
“This way, we keep the customer, soften the blow for him, and while its not an ideal situation for anyone, we know he’ll come back to us. And, until he does, we can periodically remind him of the nice store credit he has with us.
And, that’s about the time Aretha’s tune started playing in my head. “So what should my friend do at this point?” I asked, echoing the melody of the song.
“Even though he didn’t buy the ring from me, I’m always eager to make a new customer. So, have him call me, and I’ll pass along the same offer to him.”
So, how do you like that? One friend has a new customer, and another has a credit at one of the nicest jewelry stores in the country.
Accountants do a pretty good job of telling us where our money goes – rent, electric, advertising, etc. But, being accountants, they are not so good at putting these things into concepts that are important to us, such as, “How much does it cost me to make a new customer?” Smart jewelers know that is one of the most important uses of their resources.
Savvy jewelers also know that 24 Karat Club Members are experts in their fields. Members are chosen for their leadership and contribution to the jewelry industry. Have a problem that needs an independent point of view? Feel free to contact any of the members of The 24 Karat Club who can offer fresh perspectives on a wide range of jewelry related topics. A membership list can be found on the website, The24KaratClub.org.
Making new customers is one of the hardest and most expensive things we do in business. So, it is disheartening whenever we hear stories like this. I hope you are busy making new customers this holiday season, so you can thank them for their business, and sing along in your head with Aretha and look forward to the day “until you come back to me…”
Howard Kelrick is President of Finger Mate and a board member of The 24 Karat Club, SEUS. Finger Mate manufactures and installs expandable ring shanks and sells to retail jewelers throughout North America. Contact Howard at 954-458-2700 or e-mail Howard@FingerMate.com.
