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How Would You Feel?

Posted on Tue, Oct 12, 2010
 
used car salesmanA couple of years ago I bought an expensive watch from a prominent jewelry store for one of those milestone birthdays. I recently had to bring the watch in for repair because it wasn’t quite running right. I was impressed with the fact that they sent the watch back to the factory, cleaned it, and made it look like brand new factory condition. The service was expensive but I can honestly say I got my money’s worth because it looked like it was right out of the showroom.
 
But on my trip to the jewelry store, I decided to bring a 40 year old gold Rolex which was given to me as a gift from an aunt of mine whose husband had recently passed away. I decided that I would consider trading the watch in for something else. I was shocked to see the identical watch that I was wanting to trade. It was still on display and selling for $24,000. My first reaction was it was a smart move to trade it in. I told them I would be interested in trading it because I really didn’t need a $24,000 watch.

They took my watch and had it appraised. Then, they came back and said that the watch was only worth $1,700 because the watch would require a lot of work in order to get it into tip-top shape. I asked how much it would cost to do whatever work was required. They said that they would send it to the Rolex factory and we would receive a written estimate regarding what needed to be done and how much it would cost. I agreed and they sent it away, and I waited two weeks for the report. The report said that it would cost $1,600 to have it restored into factory condition. Now, at that point I questioned that if it would take $1,600 to have it restored to optimum condition and the new watch was selling for $24,000, then why did they offer me such a low price?

The bottom line: I started to question the credibility of the store. But then it got worse. I asked them, “Why would I invest $1,600 on a watch that was only worth $1,700?” I asked them to send the watch back to me without having any repair work done. Now I had to wait another two weeks before the watch came back, and when I went to pick it up they charged me $150. I said, “But you told me it was free to have it evaluated.” Their comment was it was free, but you had to pay for the freight and insurance back and forth. I asked how much was the freight? I realized that they insured the watch for $15,000, which meant I paid for a$15,000 watch going two ways.

What a rip off! I felt used, and my opinion of the store dropped significantly. Am I wrong? All I know is that I will never return to that store again because I simply do not trust them. This is the same store that I trusted to a point of buying $13,000 worth of products there. What would you do?

In the light of the release of the new Michael Douglas movie, the sequel to the movie “Wall Street” where the famous line was uttered “greed is good”, I realized that was how I was being treated at this jewelry store. Their greed was showing, and they lost my trust because of it. Trust is a powerful tool which can either turn on or turn off a customer.

Having said all of that, I am the first one to encourage retailers to work on the highest possible margins as the market will allow. But that doesn’t mean to be greedy. I don’t care what the price of something is as long as the value is there. No value equals no sale. Here is a store that spends a lot of money on advertising to attract me into the store and gain my trust only to have it thrown away during a brief encounter.

The problem in today’s business climate is that our reputations can be destroyed in an instant. Trust is a very delicate commodity and must be taken very seriously. Squander it, and you will never get it back.
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Comments

Hi, Rick - send me your duff watch, please. Pretty please.  
 
OK, joking apart, I think you've got to ask yourself what you would have done if the watch had been lost in transit.  
 
The store made an error in omitting to tell you how much it was going to cost to send the watch. They did the prudent thing in insuring it. But I'm intrigued. 
 
Here in the UK, if I pay to post a valuable item to the USA, it doesn't matter how much insurance I pay, I think the cover stops at the UK border. Further, if the item is jewelry, the big carriers won't carry the goods at all because of the risks.  
 
In those circumstances, paying $150 seems like a good deal IF the insurance would have paid out for a replacement watch.  
 
I hope you dropped a line to the store's management suggesting that you would love to do a training session for their sales clerks on the importance of letting the customers know the full costs of a "free" report. You're going to charge nothing for the training, but boy, oh, boy, your expenses are going to be out of this world!  
 
Best 
Margaret 
 
 
 
Posted @ Tuesday, October 12, 2010 1:58 AM by Margaret MacGillivray
Did you ask them about the insurance estimate for the shipping? And the only reason at all that I hesitate to 'side' with you instantly is that I had an issue with a lost package and learned the hard way... As a business, you must insure a customer's property for what it would cost you to go out and replace it if it is lost. Not the actual value per se, but what you will be paying out of pocket to go and get the customer another one, even if you have ot get him a brand new one...kind of like adding replacement value on your homeowners policy.  
 
Your 20 y/o tv may still work just fine, but if gets stolen and you have to go out and get a new one, the insurance company's $4 estimate of what a 20 y/o TV is worth is not gonna go very far in an electronics store. 
 
Either way, the store should have made you aware from the start that the estimate would be free, but there would be a cost to ship and properly insure the watch. And someone at the store should have been able to explain to you beforehand, or at least afterwards, why the shipping costs were so high (ie: overnighted, insurance, packaging, whatever) 
 
Posted @ Tuesday, October 12, 2010 2:01 AM by MJ
The store should have told you the freight was not included. Then you have to ask yourself how many times do they get the opportunity to mail a very expensive watch back? They were prudent in insuring it at $15,000 because if it was lost in transit many would expect it to be replaced.  
 
Communication is key here. You both are at fault. They in not telling you the freight costs and you not asking the question about the freight! See hind site is really 20/20!  
 
Dismissing the actual profit they may make on selling a used 40 year old Rolex. How long would they have to have their money tied up on it. If the new one has not sold one would think the old one would stay around.  
 
I would guess your aunt gave you the watch so you could wear it.  
 
I have been told some jewelry stores have huge mark ups well over 1000 percent. Asking price and selling price are usually a whole different story.  
 
Haven't you ever heard of buying low and selling high?  
 
Do not dis-pare,keep them as your jewelers It's only business!!
Posted @ Tuesday, October 12, 2010 5:55 AM by Cindy Welch
I want to talk about how quickly a customer can change their positive attitude about your business. Rick called it trust. When I had asked for ½ deposit (about $100), my customer asked if he could pay when he picked up his order (we do custom picture framing). We had developed a script for customers who make this request. “We will hold this for you. We can start the work when there is a 50% deposit, which you can make at your convenience.” That script has worked for our other customers. My customer’s face fell, and he said his immediate urge was to pick up the piece and go elsewhere, but then he calmed down and said he was going on vacation. Although I insisted he could wait till he got back, he paid the deposit. The customer had alcohol on his breath at 11:00 in the morning, (this was new), and I have previous experience with this particular customer not returning to pick up an order for several months. I might have agreed if he had a good history. But I wanted to get to Rick’s point; I could see how emotions change in an instant based on the customer’s experience at the counter.  
 
I agree with our other posters that communication is key. The customer has no clue about the cost of doing business. They understand there is an item and it has a price. When a business has a request that is not a straight sale of a good, that’s when a fee structure must be communicated clearly.  
Posted @ Tuesday, October 12, 2010 7:46 AM by Vicki heidorn
I own a jewelry store and often am in similar situations. If the merchandise is salable (and usually it isn't, although the customer believes that it is), then I have to determine if I want it, need it, and if it fits with my inventory. 
 
If I carried the Rolex line, I'd be interested IF it was a design that would turn. If I already had one in the case, is that style a best seller? Because I will not make my profit off of this sale until BOTH watches sell. I can not exchange this watch with the vendor if it doesn't sell. 
 
So, maybe the store really wasn't interested in the watch, OR it is possible they were greedy, OR it is possible they were just plain stupid! 
Posted @ Tuesday, October 12, 2010 11:06 AM by Debbe Fox
Rick, 
 
I don’t blame you for being upset with the jeweler – as I see it the lack of communication was only the symptom of a much bigger problem – the staff simply did not CARE enough (or the owners did not CARE enough to properly train their staff) to fully explain to you the details of the situation. 
 
Being a jeweler myself; I and my staff are asked almost daily about trading in or selling jewelry and watches and we treat this as seriously (if not more so) as we do any other sale. I have always felt that these are very delicate customer relations issues that require lots of hand holding. 
 
I would love to know how you would feel about the store if the jeweler had done the following: 
 
Upon seeing the new Rolex in the case and inquiring about selling / trading in your old one it was politely explained to you that while the new model is indeed worth 24k, a 40 year old model would be worth only a small fraction of that – much like a new Mercedes Benz might sell for 70k but a 20 year old one might only be worth 10k. 
 
At this point, judging from your reaction and our conversation, I may make an offer (again explaining fully why) or I may decline – explaining that I could not, given the circumstances, offer a reasonable price.  
 
If I made an offer you where unhappy with or declined - I would then offer a couple of suggestions – a referral to someone who I felt would be more interested or, if you had not already asked, sending the watch for an estimate to have it reconditioned. My sales pitch at this point would be: while the value of a 40 year old Rolex on the open market is $$$ it is still a very fine watch (it is) and by having it reconditioned you will have a Rolex that will give you years of service for a very reasonable cost compared to buying one new. 
 
I would then, (obviously) explain to you that we could get an estimate for you – it would take this many weeks and if you chose not to have any work done there would be a $150 charge for shipping – explaining why the cost to ship would be $150. 
 
 
 
Posted @ Tuesday, October 12, 2010 11:30 AM by David W. Nytch
Debbie Fox made a good point. The jewler may not have wnated your watch based upon they already have ONE and they don't need another high end, non seller. They probably were looking at RESELLING it to a wholesaler who would give them maybe $5000 and they'd make $1000 or so and the reseller would resell it to someone else. 
 
 
 
Other side is, they were just greedy. I hated that end of the business of "trading". Rick, would you felt any better if they offered you $7000? Still less than the $13,000 in the case. Its a no win situation from the retailer to csutomer. You were in clothing biz and they don't trade, Jewelers do, just like cars. if it had been me, I would have never offered it. But then again I would have missed a lot of profits. 
 
David Geller
Posted @ Tuesday, October 12, 2010 11:41 AM by David Geller
I agree with a lot of the comments here, but one thing that hasn't been addressed is the "Greed is Good" comment. Was the jeweler greedy? As I read the story, the $150 was for freight & insurance both ways. That means that all monies went to UPS or DHL, not the jeweler. In my opinion, other than not telling you up front about the freight costs (which they might have, my customers often don't hear that part), I don't see where the jeweler made any money on the transaction. And you have a new appreciation for the free repair service that they did perform. The jeweler was out the same amount of money for that shipment, but chose to shoulder it as a cost of doing business with you.
Posted @ Tuesday, October 12, 2010 12:40 PM by Shawn Deignan
Another jeweler here agreeing with David Geller and Debbe Fox. Maybe they were greedy, maybe not; the problem here is communication and knowing your customers. You are well known in the retail industry. After having spent $13,000 at the store, they should have a friendly, somewhat personal relationship with you. Their associates should be aware who you are! Somebody at that store is very unhappy right now. And with a transaction this large and this emotionally charged, you could have done some research in the time you had while it was at the factory.
Posted @ Tuesday, October 12, 2010 12:42 PM by zdena
Hi, Rick - a further thought on this. 
 
eBay - you either love it or hate it - but it's a great way to check the potential market price of your watch in working condition. If you log in to your eBay account, navigate to the Rolex section - and then click the "Completed" button, it will show you the prices being achieved for Rolex watches. It's entirely possible that a model similar to yours has been sold there recently. 
 
With Christmas just around the corner, I guess that this would be the ideal time to sell your watch, so you really need to know the potential for this watch in working condition. That's certainly one place I would research. 
 
Family bequests can be torture - they carry a burden which is unintentional but which can cost a lot more than money. If you knew that the investment would give you a watch which you could sell for $10,000, then the decisions might be easier to make. 
 
Best 
Margaret 
 
Posted @ Tuesday, October 12, 2010 4:36 PM by Margaret MacGillivray
If the watch by the jewelers standard was only worth $1700 why was the insurance $15000? Think of the money they would have made if you weren't as savvy as you are.
Posted @ Wednesday, October 13, 2010 6:05 AM by Toni Bryant
I'm a jeweler too, but I do a lot of appraisals and it's important to understand that the "value" of an object depends entirely on the situation- it's the situation, not the object, that determines the proper value. First, the $1700 was not an appraisal: it was on offer to buy, and this is subjective- the answer to the question "what's it worth to ME?". (and the answer can be "Nothing!" (By the way, this figure sounds suspisciously like the gold scrap value!) The $15,000 figure was an INSURANCE REPLACEMENT value, which is what they felt they could have physically replaced the item for if it was lost. (They probably would have tried to replace it with the one in the case and be happy to get their cash out of it.) The $24,000 tag on the watch in the case is hopng that someone will walk in and say "It's worth that to ME- I'll take it!" That person may not exist.  
 
But they should have told you about the shipping costs.
Posted @ Wednesday, October 13, 2010 5:56 PM by Karen Nottonson
The most secure way to send high-priced, small items, like your Rolex is USPS Registered Priority Mail. If sent that way, shipping the watch would not have cost more than $45 each way, including insurance for $15G, so there is also a few dollars handling fee in there. The $150 is probably a standard amount, meant to cover any item and situation, but it should have been explained to you beforehand - and possibly waived for you, as a courtesy to a valued customer.  
 
 
 
That aside, you should keep the watch and have it repaired. You'll have a great timepiece for an affordable cost, and you'll be honoring your aunt who honored you by giving you her deceased husband's prized posession. Not selling the watch puts greed out of the picture for both parties involved.
Posted @ Thursday, October 14, 2010 6:21 PM by P N Schrank
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