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It’s accused of preying on servicemembers.

WATERTOWN, NY – New York's attorney general has hit Harris Jewelry with a lawsuit claiming that the chain "used servicemembers as pawns in a predatory scheme."

In a press release, Attorney General Barbara D. Underwood's office states that the retailer, which has dozens of locations across the country, engaged in "false and deceptive acts and illegal lending in the financing of jewelry sales to active-duty servicemembers."

“My office will not tolerate companies that seek to take advantage of New Yorkers in order to line their own pockets,” said Underwood.

The lawsuit is the result of an ongoing multistate investigation co-led by New York and Tennessee.

Specifically, it charges that Harris Jewelry allegedly engages in unfair, abusive, false and deceptive acts and practices, deceptive credit repair services, and illegal lending in the financing of jewelry sales to active-duty servicemembers. The company, headquartered in Hauppauge, NY, has stores near, and in some cases on, military bases around the country.

It is alleged that Harris Jewelry targets and then entices local servicemembers into the stores with “Operation Teddy Bear” — a purported charitable program in which Harris Jewelry sells teddy bears in military uniforms with promises of charitable donations.

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In fact, "the complaint alleges that this is nothing more than a marketing ploy to dupe servicemembers into high-priced, illegal in-house financing contracts for vastly overpriced jewelry," according to the release.

Harris Jewelry sells lines of military-themed jewelry and other commemorative items such as the “Mother’s Medal of Honor,” “Token of Pride Coin” and “Forever as One Dog Tag Necklace” on credit it provides under the name Consumer Adjustment Corp. USA, according to the release.

According to the release: "In reality, Consumer Adjustment Corp. is merely the alter ego of Harris Originals of NY, Inc., a relationship that, the Attorney General alleges, is never clearly disclosed to the consumer and is used to finance more than 90% of its sales."

The complaint further alleges that Harris Jewelry tells servicemembers it can provide them with an opportunity to build or improve their credit score through “The Harris Program” — the company’s own financing. Only after the servicemember agrees to participate in this “credit-improving program” does Harris Jewelry begin to discuss jewelry or its other products with the servicemember in an effort to max out the credit limit, the press release states.

The complaint alleges that Harris Jewelry advertises “quality” jewelry on “fair” terms, but in reality, marks up its jewelry between 600 percent and 1,000 percent over its wholesale price compared with the industry standard of 200 percent to 300 percent. It says the company then attaches an additional interest rate of 14.99 percent on the financing contract, "thereby disguising its inflated profit-taking and the true cost of the items," according to the release.

For example, Harris Jewelry allegedly purchases the popularly sold “Mother’s Medal of Honor” for $77.70 and then sells it for $799 plus warranties and interest, according to the release. The “Forever as One Dog Tag Necklace” is allegedly purchased at $97 and sold for $699 plus warranties and interest.

Harris Jewelry’s use of a “per payday” advertised price on its merchandise further prevents the servicemember from calculating the total cost of a Harris Jewelry transaction over the life of the contract, according to the release. These unlawful business practices are alleged to have been secured through misrepresentations and omissions in advertising and during the loan’s origination. 

Operation Troop Aid Inc., the original charitable partner in Operation Teddy Bear, voluntarily dissolved and was assessed a suspended penalty earlier this year in a settlement with the New York Attorney General and other states, resolving potential charges of improper charitable co-venture activities, failures to account for donations and distribution of funds, and other deceptive practices, according to the release.

The multistate investigation is being conducted by lead states New York and Tennessee, executive committee states Nevada and North Carolina, and participating states Delaware, Georgia, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maryland, Pennsylvania, and Virginia.

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You know how it goes: You're dealing with a customer, and you think of the perfect thing to say. Except it's perfect only in terms of sarcastic wit. It's absolutely horrible in every other way. Below are four things you might like to say, but had better not.

We'll be publishing more in coming weeks — keep an eye out for the full series of "20 Top Things You Should Never Say to Customers." (To get them all, be sure to sign up for INSTORE Bulletins at instoremag.com/bulletins.)

Let's not be greedy.

Best to stick to the basics.

We'd be surprised if you didn't have it.

Let's keep it clean.

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In his new series "Over the Counter," fourth-generation jeweler Kyle Bullock of Bullock's Jewelry in Roswell, NM, tells the stories of inspirational and/or memorable jewelry sales. In this episode, a jeweler learns a lesson about love and pain. Bullock speaks with Erin Conroy of Steven's Jewelry and Engraving in O'Fallon, MO, and shares one of her most inspiring tales.

Listen to a 48-second excerpt above, with Kyle explaining why a customer suddenly lost his smile even though he was pleased with the product he bought.

Or hear the full episode below.

PODCAST EPISODE S1E3: THE BLUE EARRINGS (12:17 MINUTES)

Would you like Kyle to tell your story? Email him at kylerbullock@gmail.com.

The Blue Earrings-Over the Counter with Kyle Bullock (S1.E3) - SoundCloud
(738 secs long, 347 plays)Play in SoundCloud
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The Big Survey asked about display practices.

Props, yes. New items highlighted, no.

It was a mixed bag when we asked America’s jewelers about their display practices.

Among the results:

  • Only 33 percent display prices prominently.
  • 81 percent use props in their cases
  • Only 19 percent have a new items case.
  • Only 26 percent know their case sales per linear foot.

Display expert Larry Johnson said the results show how many retail jewelers do not appreciate the power of visual merchandising in their stores.

“The greatest evidence of that conclusion is that 81 percent of these surveyed do not feature new arrivals in their cases,” he said. “After 25 years of being an exhibitor at JCK Vegas and many IJO/RJO shows, I have heard the ‘What's new?’ question asked of me many times more than I can count. Why would those retailers think their customer do not want answers to the same question when they ask in their store?”

Johnson says taking a professional and strategic approach to display, one that includes an understanding of human behavior and basic display principles, is one of the best ways to improve sales. “Every successful retailer in America makes visual merchandising a critical part of their focus. When our industry ignores this area, we make our jobs harder than they have to be and put our long-term continued success in greater jeopardy."

.Johnson said it was time retailers learned to stop thinking like jewelers or retailers and started seeing their presentation from their customers’ perspectives. Make your store easy to shop. Display your merchandise to enhance, not diminish, its apparent value.

“My retail jeweler friends lament, How can people buy the crap that the chain jewelry stores at the mall are selling and at those high prices?’ The answer? Those mall stores ARE doing all these things asked in this survey. These strategies work and we either get on board with them or give our competitors a free shot at our customers.”

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In this episode of Jimmy DeGroot's satirical Gene the Jeweler series, Gene realizes there's been a fiasco with a customer's string of pearls.

The customer is ready to pick up the pearls, and they're nowhere to be found.

SEE MORE GENE THE JEWELER VIDEOS

He's trying to figure out what to do.

And it's looking like he'll owe someone a lot of money.

Watch the video:

JIMMY DEGROOT is a jewelry store manager who has been in the business for over 20 years. Now he spends his time training teams around the world at jewelrystoretraining.com and sharing marketing advice through his blog site at jewelrymarketingguy.com. Sign up for training videos here.

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The INSTORE Podcast Network is introducing a new podcast — The Barb Wire, created by host Barbara Palumbo, well-known jewelry industry blogger (Adornmentality.com, Whatsonherwrist.com), writer and speaker.

The mission of The Barb Wire is providing listeners with real conversations with key personalities in the jewelry industry. Aiming to avoid the arid nature of many instruction-oriented business podcasts and webinars, The Barb Wire instead offers engaging personal discussions with influential players shaping the future of jewelry retail.

In this short clip from the debut episode of "The Barb Wire," John Carter of Jack Lewis Jewelers tells Barbara Palumbo about a meeting with his store's marketing consultant — and one particular question he was asked — that changed the direction of his business.

Or catch the full podcast below.

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Last year's winner takes the top spot yet again.

Gabriel & Co. has taken the top spot in our Big Survey for the third year in a row, receiving the most votes when readers were asked to name the three best-performing brand-name jewelry lines that they carry.

Hearts on Fire made a big jump while Pandora dropped three places.

Below is this year's full list. Look out for all the results of the 2018 Big Survey in the upcoming November edition of INSTORE.

1. Gabriel & Co.

2. Stuller

3. Hearts on Fire

4. Allison-Kaufman

5. Lafonn

6. Pandora

7. Frederic Duclos

8. Ostbye

9. Lashbrook

10. John Hardy

11. Roberto Coin

12. ELLE

13. Crown Ring

14. Forevermark

15. (tie) ArtCarved, Benchmark, Shy Creation, Tacori

19. (tie) Vahan, Cargo Hold's Southern Gates

 

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Download 10 Steps to Holiday Success.

With the holidays fast approaching, we've put together a collection of our best advice for fourth-quarter success.

Our new e-book, 10 Steps to Holiday Success, includes tips and examples that retail jewelers throughout the country have shared with us over the years. For example, you could offer staff incentives for the highest average retail sale or the most add-ons.

Darci Aslage, business mentor for the Edge Retail Academy, explains: “We created a bingo game, and if they completeDarci Aslage, business mentor for the Edge Retail Academy, explains: “We created a bingo game, and if they completethe bingo squares, they win a prize.”

Or put gift cards or cash in a lot of different envelopes, and when you catch an employee doing something right, let them pick an envelope out of a Santa bag and win a prize — a $10 gift card to a local business or $50 in cash.Or put gift cards or cash in a lot of different envelopes, and when you catch an employee doing something right, let them pick an envelope out of a Santa bag and win a prize — a $10 gift card to a local business or $50 in cash.Britten Wolf, owner of BVW Jewelers in Reno, NV, says he takes in so many unusual repair items during the holidays — everything from candle holders and ornaments to shoes — that he offers the staff member who predicts the year’s oddest repair item a gift from Santa.

By the way, we'll let you in on a secret: The e-book actually contains far more than 10 tips. We've included tons of ideas in areas such as polishing your customer service, tweaking your marketing and optimizin your displays. We've even included a section on "12 Unusual Holiday Coping Strategies." One example, from Matthewand Emily Clark of Spath Jewelers in Bartow, FL: "Play as much Huey Lewis and the News on the store stereo system as possible." Hey, whatever works.

Be sure to download the free e-book, and share it with team members who might also benefit from it. (You can forward them this article so they can download it themselves.)

 
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It’s not just you.

Consumer spending is a matter of confidence, and declining retail sales can often be one of the first barometers of economic sentiment. The trend we have seen since early in the year has been further backed up by the economic news which, despite positive reporting from many listed companies, has brought a storm cloud of negative sentiment.

Fears of rising interest rates, even though they may have been slow to happen, will dampen consumer spending. The threat of trade wars with China and an increased cost of imports and reduced income from exports are playing on investors' mind. We’ve seen a drop in the Dow Jones reflect this fall in confidence, and it seems likely that there will be some further belt-tightening going on in the foreseeable future.

Below is a comparison of the individual monthly data for September versus the same month last year.

Our same-store September data year-to-date showed a decline of 0.52 percent in the rolling 12-month sales figure compared to September 2018. Average store sales for the 12-month period to September was $1,579,921, down from $1,588,204 at the end of August. This has extended our run of declining sales to eight months when our rolling 12-month sales stood at $1,629,755.

So what’s caused this to happen? Ever since the financial crisis in 2008, governments all around the world have increased the amount of money that is in circulation. Their logic? That more money encourages more spending.

To a large extent their strategy has worked, as if you hand out cash to the "man in the street" he will naturally spend it. Now you might be wondering how this works. Governments don’t appoint cash dealers to stand on street corners doling out dollar bills. They will generally do it through the banking system in one of two ways. The first is to print money, either figuratively or literally. These days most money travels electronically, so it usually consists of blips on a screen. This money is made available to banks to lend as mortgages or credit card debt – which allows it to filter its way through to consumers. The other way they can do it is through debt – treasury bills and government bonds can be issued to finance the government deficits that are increasingly the norm for most countries. These are effectively a demand on the government to repay later. These debts are viewed as ironclad, as a government is always able to guarantee its payments (by printing more money, but this can cause its own problems as you will see!) So the government can control the money in circulation by selling more bonds (which takes money out of the system) or buying back their bonds (by putting more money into the system re-purchasing the bonds).

Now this all sounds pretty simple but it can come at a price. Printing money can cause the value of a currency to decline (like any rule of supply and demand, the more of something there is the less anyone will pay for it). A declining dollar can make exports more competitive, but it does raise the cost of importing goods because you will need more dollars to buy the foreign product so this will lower demand for goods. Creating more government debt can be a way of mopping up the money, but it can lead to higher interest rates as lenders get more nervous the higher debt you have (even for governments) which is happening now.

There is a lot of debt, both personal and government, that is sloshing around the world. Personal debt is high because of all the money that the governments have injected in the economy through the banks.

Now that the government is tightening the money supply, there is a nervousness that many of those with high borrowings won’t be able to deal with the increase of interest rates that will now happen as money becomes tight again. The fiscal stimulus of money being injected into the economy may have kicked the can down the road, but to throw in another cliché, the chickens may be about to come home to roost.

DAVID BROWN is president of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. For further information about the Academy’s management mentoring and industry benchmarking reports, contact inquiries@edgeretailacademy.com or phone toll free (877) 569-8657.

This story is an INSTORE Online extra.

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The company is also seeking a buyer.

BOSTON -- Samuels Jewelers announced that it will begin store closing sales at Samuels Jewelers, Samuels Diamonds, Rogers Jewelers, Schubach Jewelers and Andrews Jewelers locations across the country. 

The company has 120 stores in all.

Gordon Brothers and its joint venture partner, Hilco Merchant Resources, are managing the process on behalf of the company. Store closing sales will also include discounts on merchandise featured on samuelsjewelers.com.

At the same time, the company is seeking a going-concern buyer through a court-supervised process. Interested parties will have until Jan. 21, 2019, to submit qualified bids. If a going-concern deal is completed, some or all of the stores may remain open.

“Our customers have an opportunity to purchase the high-quality items they have come to expect from Samuels at the lowest prices ever offered just in time for the holiday season,” said Farhad Wadia, chief executive of Samuels Jewelers. “Additional discounts are now being offered on all products and we hope our loyal customers will visit our stores and website early for this final opportunity to purchase their favorite pieces and brands.”

INSTORE reported in August that the company had filed a Chapter 11 bankruptcy petition. Samuels claimed to have debt in excess of $100 million.

Samuels Jewelers began selling diamonds in San Francisco in 1891.

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