A few months ago I wrote about a jeweler that had a bad problem (This Really Happened, June 2016). She had a customer that wanted to marry about 12 or 5,000 elements together from pictures on Pinterest into her totally RAD, one-of-a-kind, custom wedding band. Once finished, her customer had changed her mind and wanted her money back and was just going to order something cheaper online. She called me and asked for my opinion on how to handle the situation. Most importantly, she wanted to know if she should refund the substantial deposit that her customer put down (that she had already spent on having the ring made)? I told her I didn’t have a clue, but I would write about it and ask our colleagues across the country for some advice. Here are a few of the answers in your own words.
• “I have been going through some of the same customer issues as you wrote about. The smart thing is that she got the money for a deposit and it is non-refundable. I am up front about that. The money stays with her. It is going to get ugly and they are going to say bad things about her. They will even write a bad review on Google about her, which should be outlawed in all states. But at the end of the day that is just how it works.”
• “What a great article. We do a ton of custom design as a retailer as well. We have experienced this and it’s simply a matter of realizing that you really don’t want this customer to come back anyway and you have to stick to what your agreement was in the first place. They own the ring and they get nothing if they don’t simply pay for the ring and pick it up.”
• “I have had a few of these customers. It’s a real let down if you thought you did it all right. When I find myself in this position, if they look like a problem, I make the price really high and let them be somebody else’s problem. Sounds hard, cruel and cold, but I’m just not willing to be that desperate anymore. It’s hard to stand firm with a new customer, and it’s hard to be the mean guy because you know they will tell 10 people. That is called a bully. Don’t let the bully win! Just my 2 cents for your friend.”
• “First of all, what an awesome descriptor! Frankenstein sure describes some of the rings we’ve been asked to design. I have a client, Gen Y, who received her custom designed wedding ring with a 1.50 ct square cushion (memo’d in just for her fiancee) and she isn’t happy with it. She lives several states away which is compounding the issue. I’ve offered to recast the ring & change the diamond to one that meets her specifications. But, the one thing I won’t do is accept the ring back because it is CUSTOM for her. She & I are taking a break from talking at the moment. I feel the pain of the jeweler described in your article.”
• “Being completely honest is usually the easiest answer and such is the case with this situation. I would explain that we have invested considerable time, money, and effort into her ring in order to serve them. I would explain that it is not realistic that we would be able to find another customer to purchase such a customized ring or recoup any of that investment of time and money. I would then explain that for these reasons, the deposits are non-refundable, and remind them of the commitment they made when they decided to go ahead with the ring. I require 1/2 down when they commit to make the ring.
“Most likely they will not be happy, and this is where you have a chance to turn this all around. You look them in the eyes and you say, ‘I am still completely committed to making sure the ring turns out exactly as you envisioned. You will never own anything that you will see on a more regular basis, or have as long, as you will your engagement ring. Also, understand that unlike online sellers, we will always be here to stand behind your decision to buy your engagement ring from us.’
“Basically the problem is that there is a hurdle that you still have to overcome with them. Maybe it is simply the price, or maybe the ring didn’t turn out the way they expected. Whatever it is you need to figure it out and solve it. Yes, it will cost you more to do it this way, but some margin is better than no margin. It is also better than losing money and refunding a deposit on a ring that you will never sell, let alone the damage it could cause to your reputation.
“I know some people are saying, ‘but that is so much work and I’ve already had it up to my neck with these people.’ To you I say live with it. You are a jeweler and hopefully you are there because you enjoy what you do, and enjoy hurdling issues to help your clients. This is how you develop your reputation. This is why clients trust you. Your best salespeople already know this.
“So once the customer finds out that they will not be receiving a refund on their deposit, hence the purpose of the deposit, and that you are committed to them and their experience, usually they will go ahead and finish the process with you. If they do not, then that is their choice, but don’t kick them in the rear on the way out. Wish them the best of luck and offer to help out any way you can in the future.”
• “In regards to your latest article, for the CAD project, the deposit is (should be) non-refundable. Your friend, our colleague, needs to stand firm, keep the money, pay her designer, return the diamonds if possible, and scrap the metal. S**t happens sometimes, cut your losses, stop wasting time.”
• “If there is language on the custom forms with signatures stating they are approving the design process & understand they can change their minds after approving the wax, but the deposit is being kept to cover any expenses up to that point, then I think the jeweler has a strong position to hold on to. Hopefully there is language stating a certain amount of money is kept once a customer approves the design & production. Profit may be lost, but costs can be covered. Good luck!”
• “As per your question in this month’s issue, the purpose of a deposit is to insure yourself that the patron will follow through with their end of the deal. If they back out after you have completed the product or during the production, you are entitled to withhold at least the amount that you have invested in the project. Otherwise, why require a deposit in the first place and why have them sign anything. Hopefully somewhere in all the documents they signed, was the language that this would occur if they didn’t honor the agreement.”
• “First, I love your article. It is always the best part of the paper. It comes from real life, and there are many situations I can relate to, cringe/laugh at. Not sure what to say about this. If they are told that the money is non-refundable right up front, then stick to your guns. You (the owner of the store) are not responsible for the public’s shopping habits. If they change their mind after ordering a custom piece, it is still on them. Would it be handled any different for a car? No. Order a new car with bright pink leather and just try to return it! I have an extra step in place where people try on the wax model before moving on to the next stage, so at least then the money lost if they back out isn’t so much. If you are using CAD/CAM and have to job it out, then have a set amount for this step, separate from the finished piece.”
• “Hi, I really enjoy reading Chuck’s articles, most of them seem like he either works at my store, or has a live-feed camera hidden somewhere. About his question on the custom ring, I had something very similar just happen, I was lucky that I got at least half down for a deposit. After the customer saw the finished ring, he really liked it, and was going to do a lay-away on the balance. He came in about 2 weeks later and said that the wedding was off, they had broken up. He was wondering what to do about the ring. Since this was not my first day at work I gave him 2 options.
Plan A was he could finish paying for the ring and take it, but I would have felt bad forcing him into buying something he really didn’t need. Plan B was that I would keep his deposit and put the ring out for sale, and then I would return his deposit when it sells. The customer went for plan B, which I think was the best plan. For his sake I hope it sells quickly, but it isn’t costing me anything to have it in the showcase until it does.
“I’m thinking things like Chuck had in his article are going to happen more often in the future due to this ‘entitled’ generation and the internet. Their needs come before all others. They are my only customer and I should stop drop and roll every time they come in. I am starting to see that with repairs as well.”
• “We have a policy, with signatures, that states that special orders are special for you, no refunds, exchanges or credit. If the customer does not want to sign that document, then there is no exchange of money and no job for us. We have been burned before. We don’t need to do it again.”
• “Although we would like to donate all of our time to every customer; there comes a time where we must cut our losses. I have encountered this situation many times, even back in the day when the technology wasn’t quite as offering. Before CAD, when I would have to hand carve our waxes, I learned quickly to see this type of customer coming down the track like a steaming ‘loco’ motive. (LOL). When customers want to reinvent the wheel to that severity; you must nip it in the bud. If I saw a customer come in with maybe two or even three photos that they would like to incorporate, then of course this is something that can logically be executed. But if I saw a customer come in with a stack of magazines, or in this case with 50 photos, then I would be totally apprehensive. In your article I knew from the start that it would wind up like this. This is a customer that no matter what she saw online, in a magazine or on any billboard, would not be satisfied. As professionals, we need to recognize this from the start and with polite strategy, turn them away. This is a headache for your competitor down the street. But, that does not get us out of the situation that we were not savvy enough to avoid.
“At this point I would just offer them a $1000 credit to use later for their wedding bands and call it a day. If for some reason they fight you on the deposit and that is not satisfactory, then I would work my way down the ladder and offer them one half refund and one half credit. I think we have the responsibility of owning this for not having the proper sense in the first place. Unfortunately, it’s a costly lesson learned. Remember if you upset the customer to the point where they go online hurting you, it’s not worth the $1,000 or whatever the cost is. Of course when you part as friends you make your customer understand the loss you just suffered by letting them know all of the costs that went into bringing them that first design. But suck it up; you have just improved your vision by 100 percent.”
• “I have been in the business for 45 years so I can afford to do this. I would tell both of them thanks for coming in but I would not be able to provide the service they need.”
And lastly, my advice to her was, “Oh, Hell no! Not in a million years!”
Chuck is the owner of Anthony Jewelers in Nashville, TN. Chuck also owns CMK Co., a wholesale trade shop that specializes in custom jewelry and repair services to the jewelry industry nationwide. If you would like to contact Chuck or need a speaker or instructor for your next conference/event he can be reached at 615-354-6361, www.CMKcompany.com or send e-mail to email@example.com.