Independents

What Should Retailers Do with Unclaimed Jewelry?

IndependentsApr 26, 2018

What Should Retailers Do with Unclaimed Jewelry?

Experts weigh in on best practices to follow when a customer doesn’t come back for their piece.

New York--A customer drops off a piece of jewelry for repair and, months later, she or he still hasn’t come back for it.

What can, and should, the retailer do with this unclaimed property?

The issue is all too common in the jewelry industry. To help retailers handle it, National Jeweler pulled together tips and suggestions from the Jewelers Vigilance Committee’s legal intern Morgan Cline and attorney Paul Mitassov.

Here are 5 things to keep in mind when dealing with unclaimed property.

1. Know the local laws.

Guidelines vary by state, so it’s important for each retailer to find out what the laws are for where they are located; there’s no central database of lost property law to which retailers can refer.

Some states require storeowners to hold unclaimed property for a certain period of time before they can get rid of it. Cline said these states also give specific procedures for disposal, which could include reporting the property to the state controller’s office before a sale or public auction legally can occur.

In most states, even if one follows all procedures and disposes of an item, businesses are only allowed to keep either the cost incurred when disposing of the item or the fees to which they’re entitled, such as for a repair, she added.

Anyone with more specific questions, or who needs help finding the laws in her or his state, can go directly to the JVC.

2. Have an unclaimed property policy in place.

The policy needs to explicitly outline what will happen to items that are not claimed, the time frame, and any return or credit policies.

For jewelers in states guided by specific laws, a store’s policy will be subject to the state’s established time frame and guidelines for handling unclaimed property. For retailers in states where there aren’t specific rules, the store should create a policy and timeframe of their own.

Mitassov suggested also including a clause making the client responsible for any resulting storage or administrative costs.

3. Make sure customers can see and have signed the policy.

The policy should, according to the JVC, be posted in a location visible and obvious to customers. It also should be printed on the store’s receipts or anywhere else a customer might think to look for the information—catalogues, brochures or the business’ website, for example.

It’s also important to have a written agreement signed by

each customer. This should be provided at the time the store takes possession of the item, the JVC said, and needs to be securely filed away.

The JVC and Mitassov both stressed the importance of gathering all pertinent contact information for clients, including addresses, phone numbers and email addresses, when they drop off an item.

4. Try to stay ahead of the issue.

Reach out to the customers as soon as the repair, sale or consignment contract is complete; don’t wait for the time period stated in the policy to get close to expiring.

If the customer can’t be reached at first, keep trying on a regular basis, Cline said.

Mitassov said when a significant amount of time passes with no reply, it’s important to clearly state the issue and provide a list of steps the client needs to take to avoid property disposal, when applicable, and state the deadline again.

He recommended sending certified letters, particularly for high-value items, to provide the best legal protection for the business.

5. Keep proper documentation.

The JVC said when a customer doesn’t pick up their item, having all of the proper paperwork will help prove due diligence in contacting them: copies of sent letters, the time and day telephone calls were made as well as whether a voicemail was left, any attempts to track down new contact information and any ads placed in public places.

For businesses in which disposal after a certain period of time is a part of the policy, Mitassov advises keeping detailed records of the method of disposal and the price received, if any, for the item.

He also suggested getting a third-party appraisal before the sale, particularly for high-value property.
Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.

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