When customers return stones to vendor late

[kenny]

Perhaps vendors could solve this problem by charging late fees when stones are not returned on time.

Customer would have to understand and agree to these charges to their credit card before they get the stone.

Make the fees substantial so the vendor doesn''t mind the stone being "rented out" longer, and the customer has a large financial incentive to purchase or return the stone when agreed.

 

[strmrdr]

depends on the situation.
Without a written agreement in advance it would unenforceable and the vendor would get charge backs from the cc company.
A company tried to do this to a friend of mine.
He was under the impression that it had to be post marked by a certain date and they said it had to arrive by that date.
His cc company just asked, was it returned, he said yes, 24 hours later he had a credit on his card and the vendor had a charge back on their record.

 

[MissAva]

Do you mean something like a late fee? How would that be set up? Based on value of the stone? Time out? Not a bad idea but it could end up costing the vendor sales...

 

[Kaleigh]

Hmmm. Depends on how it would work. Interesting idea though.

 

[Mara]

If the vendor is sending the stone to the appraiser without payment on the stone, they are lending it, not renting it. I don't think a late fee is even necessary, just better guidelines on what is an acceptable timeline.

When a stone is sent to an appraiser, a firm timeline should be given and agreed on in writing. A multi-thousand dollar item is being sent out on good faith. The vendor should say...our timeline max is 3 working days. Just an example. Agree on it. Then within that time if the 3 days passes with no response, then the vendor would be within rights to call the stone back. End of story. If the consumer wants, it they pay for the shipping yet again etc for going over the timeline.

I think that many times vendors try to go that extra mile for the consumer and err on the side of niceness or giving the consumer the benefit of the doubt, only having it turn around and bite them later when people question it or this or that.

Setting a strict policy on that would be my suggestion, forget a late fee...the stone is still the vendors and they should be in charge of sending it or getting it returned at any time, the consumer should never be in charge of that unless they have already paid for the stone and taken it to their local appraiser etc. Then it's theirs.

 

[aljdewey]

Date: 12/26/2005 10:38:14 PM
Author:kenny
Perhaps vendors could solve this problem by charging late fees when stones are not returned on time.

Customer would have to understand and agree to these charges to their credit card before they get the stone.

Make the fees substantial so the vendor doesn''t mind the stone being ''rented out'' longer, and the customer has a large financial incentive to purchase or return the stone when agreed.

I applaud the idea, but I think that starts vendors down a slippery slope. I don''t think they really want to enter the "rental market" for diamonds. Giving a customer an outlet to keep a stone longer without any sense of urgency on its return doesn''t really support the goals of the vendors.

Vendors are there to SELL stones and move inventory. Any policies that don''t support that end goal seem misguided. I can understand the premise you''re presenting, but I don''t think a vendor becomes whole by reaping $300 late fee at the expense of an $5K or $10K sale. In that case, the vendor isn''t made whole.

 

[kenny]

Okay erase the word rent.
Pretend I never used THAT word.
It means a bunch of things we don't want.

I'm just saying have a daily late fee that is large enough to compenste the vendor for the stone being out of inventory and large enough the get the customer off his butt and be resposnible about shipping it back on time.
It is not fair to the vendor that a $10,000 item is off the market too long.

If their business model allows for stones to be out for 10 days and they are out for 20 that additional cost must be added to the price of all future stones, or lower the profit, or they'll have to lean on an employee to work late for free o something unpleasant.
Time is money.
Another paying customer may have bought it during that time.

My opinion:
The vender specifies HOW the customer/appraiser must ship the stone (such as Registerd Express, or Fed Ex Priority X or UPS overnight).

The deadline is for the customer to get it *postmarked* by a date.
This will keep it more simple.
It is not the customer's fault if the shipper takes too long.

 

[Mara]

I think it would be the consumer's fault because it is their independent appraiser, their contracted employee. The appraiser represents them.

Bottom line is an agreement had to be given up front re: timelines and people have to stick to it with the vendor having the ability to call the stone back at any time.

There doesn't need to be a late fee, and nothing compensates the vendor if a stone is out other than a SALE.

I also don't know if this is REALLY an issue or if is just a few instances that brought it to the forefront. The vendors just have to be more stringent about their processes and stick with it. End of story...I'm sure they don't need us telling them how to run their business.

 

[aljdewey]

Date: 12/26/2005 11:32:40 PM
Author: kenny

I''m just saying have a daily late fee that is large enough to compenste the vendor for the stone being out of inventory and large enough the get the customer off his butt and be resposnible about shipping it back on time.

Believe me....I understood the intent, and in theory, it''s a good one.

What I mean to convey is this: the only way a late fee could be large enough to *compensate* for a stone is to equal the sale price of the stone. Yes, a sizable late fee could potentially spur the customer to action, but it could never truly *compensate* the vendor because others in the market for such a stone will likely buy elsewhere.....so there is no true way to recoup that lost opportunity.

 

[solange]

Lesley at Whiteflash was very specific about their policies when she arranged to ship a stone to an appraiser at my request.
It was a large stone and she made it clear in a very polite way that she was not going to ship it unless I was ready to go and see it within a day or two.

In my opinion, the stone still belonged to Whiteflash and I felt an obligation to comply by going to see the stone within a few hours of its arrival at the appraisers.

I called Lesley from the appraiser's office to say I wanted the stone and would have the appraiser send it back to them for setting. There was nothing ambiguous about this arrangement. I do not feel that everything must be in writing when you have not even paid for the stone. It never occurred to me that I was not obliged to comply with Whiteflashes requirements.

When the stone did not arrive back at Whiteflash when expected, Lesley called and asked me if she could call the appraiser since the shipping arrangements were made betweeen Whiteflash and the appraiser. I said I had no objections and the appraiser shipped the stone back after he got the call from Lesley.
Nothing could have been made more clear as to my obligation once they shipped the stone to the appraiser. Buying over the internet is a matter of trust.

Many people will not buy overtheinternet because they fear some scam. But people buy from Pricescope vendors because they trust them and Pricescope vendors must be able to have the same confidence that their customers will keep their word.

 

[aljdewey]

Date: 12/26/2005 11:40:33 PM
Author: Mara


There doesn''t need to be a late fee, and nothing compensates the vendor if a stone is out other than a SALE.

*Exactly*!

 

[kenny]

The fee compensates for lost opportunity. (They still get the stone back to sell another day - if not THAT is another matter.)

If that still isn't good enough, raise the fee.

There must be math that can calculate what the right fee is.

 

[Mara]

Have at it Kenny...

 

[strmrdr]

Date: 12/26/2005 11:53:58 PM
Author: solange

Lesley called and asked me if she could call the appraiser since the shipping arrangements were made betweeen Whiteflash and the appraiser. I said I had no objections and the appraiser shipped the stone back after he got the call from Lesley.

interesting that she asked your permission before contacting the appraiser isnt it.
Seem the proper way to do it too me.
things that make ya go hmmmmm :}

 

[aljdewey]

Date: 12/27/2005 12:03:40 AM
Author: strmrdr

Date: 12/26/2005 11:53:58 PM
Author: solange

Lesley called and asked me if she could call the appraiser since the shipping arrangements were made betweeen Whiteflash and the appraiser. I said I had no objections and the appraiser shipped the stone back after he got the call from Lesley.

interesting that she asked your permission before contacting the appraiser isnt it.
Seem the proper way to do it too me.
things that make ya go hmmmmm :}

Well, then again.......it''s easy to ask permission if you can actually REACH the client, right? But since Solange WAS actually reachable by phone, we''ll never know if the next step would have been calling the appraiser directly if Solange was unreachable, will we?

Things that make you go "hmmmmmmmmm", indeed.

 

[Kaleigh]

Date: 12/27/2005 12:03:40 AM
Author: strmrdr

Date: 12/26/2005 11:53:58 PM
Author: solange

Lesley called and asked me if she could call the appraiser since the shipping arrangements were made betweeen Whiteflash and the appraiser. I said I had no objections and the appraiser shipped the stone back after he got the call from Lesley.

interesting that she asked your permission before contacting the appraiser isnt it.
Seem the proper way to do it too me.
things that make ya go hmmmmm :}

Methinks this is getting out of hand....

 

[aljdewey]

Date: 12/26/2005 11:59:02 PM
Author: kenny
The fee compensates for lost opportunity. (They still get the stone back.)

If that still isn''t good enough, raise the fee.

There must be math that can calculate what the right fee is.

Kenny, I really applaud your effort....but you don''t get it. Maybe it''s becuase you aren''t in sales. If you were, it would be clearer.

A lost opportunity cannot be compensated by anything other than the sale.

Yes, they get the stone back. They will likely sell it to someone else eventuallly. Until they do, that''s capital tied up in inventory, and you cannot compensate for the loss of the opportunity.

 

[kenny]

But there was a chance that buyer *may* have bought it.
Giving out your credit card info makes you a pretty good bird in the hand.
The customer holding the stone for a few days MAY in fact buy.
Then again he may NOT buy and a customer who would have bought that stone while it was out may be lost.

Both ways it is a risk.
Seems kind of a wash to me.

Shipping stones on the chance that the buyer may not buy seems to be part of the territory here in InternetDiamonLand.
Some percentage of buyers decide to not buy.
This is not new.
This reality must have been factored into everyone''s business plan up front and prices must have always been set accordingly.

Right?

BTW, you are right; I am not in sales.
I''m just a guy with a throbbing brain and a keyboard.

 

[aljdewey]

Date: 12/27/2005 12:16:31 AM
Author: kenny

Seems kind of a wash to me.

I understand. We see it differently, and that's ok. I can see where it would seem like a wash to someone who gets paid their income regardless of outcome.

If your paycheck becomes dependent on sales, you'll likely see it differently.

 

[Regular Guy]

Kenny, I''ll back you, and I''m in sales (or, sort of am, and certainly have been).

Al, where I see that you''re complaining that a "late fee" is not good enough, you''re not describing an alternative consequence to motivate and have the ostensible diamond buyer experience the sense of urgency that you agree may be required.

Although this post may be motivated by the other one associated with Satriani, that certainly, potentially, involves other factors, and think this idea can be handled on its own terms.

I think in real estate, when a sale occurs, and a party is then expected to exit the house, I think it is standard to have two ideas documented and communicated:

- at the time of the sale, the party who has sold the house will leave it, making room for the buyer to take possession, and no other option is authorized.
- if, however, for some reason, the seller is delayed in leaving, a charge of $100 (or whatever number fills the blank) per day is assessed, until the seller vacates.

It is possible that there currently exists a tradition of informality between diamond buyers and sellers, that these written agreements are not typically used because misbehaviors associated with these relationships are infrequent enough that such agreements would not serve the larger purpose. While I would entirely defer to said diamond sellers on the matter, I''d support this idea in principle, for the logical issues raised here.

 

[elmo]

I also have to back up Kenny. Because registered mail is the way to return things like this, and because registered mail is famously irregular, if I wasn''t able to have a three-day look plus return time without upsetting someone, I''d have to pass on that vendor. I''ve had registered take 7 business days for a short trip, and recently had something go across the country in 2.

 

[aljdewey]

Date: 12/27/2005 8:41:38 AM
Author: elmo

Because registered mail is the way to return things like this, and because registered mail is famously irregular, if I wasn't able to have a three-day look plus return time without upsetting someone, I'd have to pass on that vendor. I've had registered take 7 business days for a short trip, and recently had something go across the country in 2.

I totally agree with that, Elmo. You guys are trying to factor in shipping time, etc, and I don't think that's part of the equation. You're both also looking at this from a "how many days" perspective including shipping, and I don't think the issue is that simple.

I understood Kenny to be proposing a solution when the customer ties up the stone (either through cash flow issues or indecision). Tying up a stone means he doesn't release it for shipment.

I don't consider shipping time to be part of this equation. To me, once the potential customer has shipped the stone back, there is nothing more he can do. He is at the mercy of the carrier.

Most vendors that I've spoken with here don't have an issue with the days in transit.

Ira, my comments are not exclusive to the Satriani thread. There was another thread a few weeks ago where the customer wanted the stone and had the stone on hold for over two weeks with promises to pay that never materialized. Satriani's example was just one more, not the primary driver for my comments.

Also, Ira, I'm not "complaining" about the inadequacy of a late fee; I'm opining that I don't think a late fee is truly compensatory. When a loss is suffered, the only way to make a loss whole is to replace the amount of loss. Anything else is a reasonable gesture, but not truly compensatory.

In your real estate example, the $100/day the buyer gets is something, but it's *not* compensatory. If I'm the buyer, and I have planned to get out of my current living quarters, my plan is to move into the house I just bought. If I cannot do that, it's an inconvenience to me. What if I cannot extend my stay at present quarters? Sure, I get $100/day, but I have to live in a hotel or in transitory housing and suffer the inconvenience of not being able to settle in and carry on my normal living. The $100/day might pay for my interim quarters, sure, but it doesn't make me whole. It doesn't remunerate the inconvenience and the lack of being settled because I cannot settle into the house I just bought.

The real estate example becomes even less pertinent when you look at outcome. Eventually, the inconvenienced buyer will at least get the house....late, but he'll get it. Not necessarily so in the lost sale scenario. While someone else has a diamond tied up, what if my sister is in the market for that very type of stone? She is a ready buyer, and the vendor's stone could satisfy her criteria. However, because it's not available, she buys another stone. Then the vendor gets the stone back, but he will never get back the opportunity to make her a customer because she bought somewhere else. That affects not only that potential sale, but potential future repeat sales.

Sure, it's the nature of the business. We all know that. All I'm saying is that saying "Oh, ok, here's your stone back and $300 for your trouble because I couldn't make up my mind" isn't fully "compensatory" for the lost potential sale.

 

[solange]

In this case, the major bone of contention was the $65 shipping charge. Whiteflash returnded his money although,( through no fault of his) he was unable to return the stone in the promised time.
I hardly think that even if Whiteflash had kept his $65 it would have compensated them for haviing the stone out of their hands and off the market for so long--partularly during the busy season.

As to the real esate comparison, my husband is in the real estate business and I believe there are very heavy penalties for not vacating a propety on the assigned date that you have agreed, according to the contract, to turn title of the property over to the seller. You are subject to a law suit that will compensate the buyer for expenses and also penalties and a broker's fee if there was a broker involved. I live in a Co-op and a seller refused to move on the assigned date. The buyer received a significant amount in compenation for the expense of storing his furniture,hotel bills, not having a place to live since he had sold his other apartment, etc.

Even if you just list a house with a broker, depending upon the terms of the contract you signed with the broker, and the broker comes up with a buyer and there is a meeting of the minds, you can be sued by the broker for a commission if you do not not go through with the sale because the property was off the market and not available to other buyers.

As to a previous question as to what I would have expected Whiteflash to do when the stone did not arrive when expected and I could not be reached, I would have seen no harm in having Whiteflash contact the appraiser since the stone had not been paid for and it was still their property.

 

[Regular Guy]

Al,

So what if we're both right?

"Also, Ira, I'm not "complaining" about the inadequacy of a late fee; I'm opining that I don't think a late fee is truly compensatory."

Though true, is this helpful?

I think what Kenny is trying to be is helpful.

As I said before:

Al, where I see that you're complaining that a 'late fee' is not good enough, you're not describing an alternative consequence to motivate and have the ostensible diamond buyer experience the sense of urgency that you agree may be required.

Any better ideas?

(edited to add) Solange...you represent one set of alternate solutions, but these are not pro-forma ones, involving time to construct a law suit, and money to hire an attorney. The suggestion is to create a proforma solution, and build it into the agreement at the outset. A number like $200 per day may be seen as more in line with necessary actuals. The point, I think, it merely to simplify what could be a more complex process, and build gravitas into the agreement, so that it is not taken lightly.

 

[WinkHPD]

We ask our clients to notify us when they return the stone within our 21 day return policy. On day 22 we most often will reinvest the money in other stones.

We do NOT accept returns after day 21 if we were not notified it was coming. We are running a retail business and pay our suppliers on time. We expect that our clients know this. Paying our suppliers for new stones then getting a bunch of "sold" stones back could put us into serious cash flow problems at some times of the year.

Fortunately having a diamond returned late has never happened to us, but the above has always been our stated policy.

Wink

 

[aljdewey]

Date: 12/27/2005 1:38:00 PM
Author: Regular Guy
Al,

So what if we''re both right?

''Also, Ira, I''m not ''complaining'' about the inadequacy of a late fee; I''m opining that I don''t think a late fee is truly compensatory.''

Though true, is this helpful?

I think what Kenny is trying to be is helpful.

As I said before:

Al, where I see that you''re complaining that a ''late fee'' is not good enough, you''re not describing an alternative consequence to motivate and have the ostensible diamond buyer experience the sense of urgency that you agree may be required.

Any better ideas?

Ira....this is a discussion forum. By definition, that means ideas presented here will be subject to discussion. So yes, I do think it''s helpful, pertinent, and APPROPRIATE to offer an opposing perspective on any given idea.

You''ll notice that I''ve given plenty of kudos to Kenny for trying to propose a solution......but that doesn''t mean the idea will be a workable one. If your car was broken down on the side of the road, and my idea was to require all auto manufacturers to pay for the cab ride to get you home, that still wouldn''t make you whole (because you still don''t have a drive-able car). My intentions may be good, but it doesn''t mean my idea is workable, capice?

There is a way to ensure stones aren''t tied up or off-the-market.......and that solution is for vendors not to remove stones from their inventory, not to mark them as "on hold", and to sell to the first buyer who lays out the cash. But that would be counterintuitive to being customer-centric, so that idea also wouldn''t work.

My proposed solution: a vendor releasing a stone to an appraiser could require the appraiser to ship the stone back no later than 2 business days after the appraiser has presented evalution results to the client. If the client wants the stone, he has 2 business days to commit to the purchase and/or place a deposit, and the vendor will then advise the appraiser not to ship the stone back.

So, if appraiser tells the customer of his evaluation results on Friday, the appraiser should ship the stone back no later than Tuesday unless he is advised otherwise by the vendor.

What if the appraiser cannot reach the customer to give him evaluation results? If he cannot get a return call from a client within 36 hours, then he should contact the vendor and relay that information. Honestly, if you hire an appraiser and you know results are pending, you should be reachable.....and if you''re not, others shouldn''t have to bear the inconvenience of that.

Everyone''s focusing on Satriani, but Kenny''s idea is about more than Satriani. It''s about how to avoid stones being out of contention for an unreasonably long period......whomever the customer, and whatever the reason.

 

[kenny]

I fully support a system in which the customer is clearly and fully informed that if he does not SHIP the stone back by day A via carrier B's service level C they just bought the stone or must pay large late fee X per day.

But I would not phrase it : "Vendor must RECIEVE the stone by date D or else customer bought it."
I'd say customer must SHIP stone by day E.

The customer must not be held responsible for the performance for the carrier that the vendor has chosen.

Customer indecision or procrastination should not be tolerated.
If it is late, then they bought it, or are charged a very substantial late fee.

And yes I'm trying to be helpful.
I'm just an observer.

It's just all opinion anyway.

 

[solange]

(edited to add) Solange...you represent one set of alternate solutions, but these are not pro-forma ones, involving time to construct a law suit, and money to hire an attorney. The suggestion is to create a proforma solution, and build it into the agreement at the outset. A number like $200 per day may be seen as more in line with necessary actuals. The point, I think, it merely to simplify what could be a more complex process, and build gravitas into the agreement, so that it is not taken lightly.

Quote from Regular Guy

I am sorry that I was not clear in my response to the real estate issue. I would never suggest constructing a law suit over the matter of timely return of a ring.

Someone had compared this to the real estate issue where someone fails to vacate a house when they no longer own it. Another person said the comparison was irrelevant.

I never meant to imply that anyone should hire a lawyer over an issue like late return of a diamond.. I merely wanted to state that, in real estate, a few hundred dollars a day is not the usual compensation and that you do have grounds to sue for a substantial amount when you have sustained a significant loss because the seller has not vacated after the property has been taken off the market and the seller has violated the terms of the contract. You can sue for hotel accommodations,furniture storage, lawyer's fees, etc.

Since it was used as a comparison with a diamond not being sent back on time, I just wanted to point out the difference and not suggest that anyone engage in a law suit over a penalty for not sending back a diamond on time. In almost all cases, this would be a waste of time and money because the lawyer would probably charge you more than you could collect.