Force of habit (Part 4)

Make safety and security routine at your company

Part 4 of 6

By David J. Sexton

With a sound inventory methodology in place, you may turn your focus on security toward developing a business continuity plan. Preparing ahead of time for disaster recovery is crucial for a quick resumption of your operations and can allow you to make informed business decisions during a high- pressure crisis. Time spent on such a recovery process can translate into lost customers, as they may be forced to go to your competitors while you are closed for business. The longer you are shut down, the greater the risk of losing customers you may not be able to recapture.

Backing up files for everything from your tax returns to your lease to your most current inventory, and storing this information safely in an accessible, off-site location, can be a life saver. Copies of your insurance policies and contact information for your insurance broker, accountant, attorney, bank officer, alarm service provider, and safe vendors can make recovery go smoothly.

It is also wise to establish ongoing relationships with building contractors, cleaning services, and a realtor who can help you find an alternative location in the event your space is inoperable for an extended period. Don’t forget to maintain contact lists for your associates and vendors who may arrive at your business if they are unaware of your circumstances. Shipping companies that serve your business need to be contacted immediately to be given alternative delivery instructions to a more secure location.

A thorough business continuity plan also considers your customers. For instance, do you have access to your customer database if your store’s computers are somehow compromised? You’ll want to let them know if you’re temporarily closed or operating in a different location. You will also want to preserve your historical sales records and be ready to provide them.

More to come of this story in Part 5.

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Force of habit (Part 3)

Make safety and security routine at your company

Part 3 of 6

By David J. Sexton

To select the appropriate limit of insurance coverage, you need to know what your exposure to loss can be. An effective and consistent inventory-control methodology is central to protecting your company’s assets. Conducting an annual physical inventory is one of the best things you can do to protect your business. Although every jewellery business may operate differently, there are inventory software solutions designed specifically for a variety of jewellery operations.

Your accountant, jewellery-specialist broker, or jewellery-specialist insurance carrier may be a great resource in helping you make an informed decision in selecting the inventory software solution that’s best for you.

To maintain accurate and current records, jewellers should update inventories daily. In addition to saving your purchase invoices and sales receipts for future reference, inventory records should chart the following information:

• Item number;

• Detailed description of the item;

• Date it was received;

• Price paid for the item;

• Value of the item;

• Date it was sold; and

• Price received for the item.

Remember, finished goods are not the only type of inventory your business may need to consider. Loose diamonds and coloured stones, settings, replacement materials, and customer repairs should also be included. For loose stones, each gem over .20 carats should be assigned a specific number and value on the day it was received. For gems less than .20 carats, stones that are purchased in bulk and are equal in colour, cut, and clarity can be inventoried by weight.

More to come of this story in Part 4.

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Force of habit (Part 2)

Make safety and security routine at your company

Part 2 of 6

By David J. Sexton

A jewellers block policy is comprehensive coverage designed to meet the needs of a very broad spectrum of jewellery operations. This policy covers losses typical in the jewellery industry, such as burglary, robbery, distraction theft, fire damage, and water damage, to name a few.

Some jewellers block policies cover the following:

• Policyholder’s inventory for sale, findings, and raw materials, as well as parts for manufacturing and repair; consumer property that has been delivered or entrusted to the insured jeweller;

• Property of others in the jewellery business that has been delivered or entrusted to the policyholder, often referred to as ‘memo goods’;

• Jewellery shipments;

• Travel losses;

• Damage to customer’s jewellery that occurs as a result of the jeweller’s handling or work on the item;

• Jewellery carried or worn away from the described premises by the policyholder and his or her associates, such as merchandise taken off the premises for social occasions or events; and

• Merchandise displayed in show windows when the operation is open for business.

Coverage for jewellery displayed at trade shows, on the road with a sales representative, or loaned to a customer is also available as an option.

Work with a knowledgeable jewellers block specialist broker who can assist you in customizing and structuring the policy to cost-effectively meet the needs of your particular jewellery operation.

Once you know your insurance policy has been customized to meet your individual needs, it’s time to start building sound security habits within your retail store.

More to come of this story in Part 3.

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Force of habit (Part 1)

Make safety and security routine at your company

Part 1 of 6

By David J. Sexton

The ‘what ifs’ are endless when it comes to threats in the jewellery industry. Each year, jewellers fall victim to crime and face unpredictable losses from fire, natural disasters, and even internal theft. So how can you possibly protect your business from the unknown?

There are several things you can do to ensure your safety. You can start by asking yourself, “Does this decision create a safer and more secure business environment?” From management decisions to everyday dos and don’ts, make safety and security a priority for your business and your staff. A great place to start evaluating your business in terms of safety and security is to examine your insurance needs. Business owner policies (BOPs) were never intended to be comprehensive insurance coverage solution for jewellers. In fact, most limit or exclude coverage for jewellery inventory. Brokers and their jewellery customers need to consider insurance coverage that can be customized to meet the jewellery business’s individual and unique needs. They also need to work with an insurance specialist carrier who understands the jewellery industry and has the experience to guide them in making informed choices about their insurance protection.

More to come of this story in Part 2.

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A closer look (Part 6)

Screening for synthetic diamonds using standard gem instruments

Part 6 of 6

By Branko Deljanin

A pink diamond of unknown origin between cross-polarized filters mounted on a microscope. Photo courtesy CGL-GRS.

Visually, natural and synthetic diamonds can look very similar when comparing size, cut, colour, and clarity. Yet, their commercial values differ significantly, which highlights the importance of detection and disclosure. For instance, coloured synthetics can cost 50 to 60 per cent less than their natural counterparts. In the case of colourless lab-growns, the price difference is around 25 to 30 per cent.

Many dealers and retailers believe diamonds exhibiting medium, strong, or very strong blue fluorescence are inferior. However, visible strong blue fluorescence under long-wave light is a very strong indication of a diamond’s natural origin.

In combination with the simple CPF method, the fluorescence technique can be used to screen for diamond types and help identify synthetic origin of a coloured diamond, as well as colourless without pattern (i.e. HPHT), even with diamonds less than .50 carats.

However, in cases where the diamond is determined Type IIa based on the ‘tatami’ pattern, it is still very important to refer it to an advanced lab to determine whether colour is natural or HPHT-enhanced, or the stone is CVD-grown.

The procedures explained here are relatively simple, easy to learn, and inexpensive. A CPF set and UV lamp costs about $500. In light of several occurrences of salted parcels of undisclosed diamonds reported in the last few years, vigilance and an understanding of gemmological tools are critical to ensuring confidence in the supply line.

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A closer look (Part 5)

Screening for synthetic diamonds using standard gem instruments

Part 5 of 6

By Branko Deljanin

In most cases, applying the CPF method to mounted diamonds is not feasible. Instead, testing for fluorescence is another useful tool for set diamonds, as well as loose.

In diamonds, fluorescence is an optical phenomenon in which the molecular absorption of photons triggers the emission of visible light when exposed to UV light. In the case of 95 per cent of natural diamonds, fluorescence is seen as blue. Most colourless and coloured natural diamonds react stronger at long-wave UV and usually weaker (mostly blue) at shorter wavelengths.

The following describes how different types of diamonds fluoresce under long-wave (LW) and shortwave (SW) UV light:

None: in Type IIa and Type IaA natural diamonds, the aggregate (i.e. two nitrogen atoms) tends to extinguish fluorescence (LW none and SW none).

Blue: caused by three nitrogen atoms at 415nm in Type IaAB natural diamonds (LW > SW).

Yellow: caused by hydrogen impurities in Type IaAB natural diamonds (LW > SW).

Bluish-green: caused by boron impurities in Type IIb and Type IIa HPHT-grown diamonds (SW > LW).

Yellowish-green: caused by a nickel catalyst in Type Ib HPHT-grown diamonds (SW > LW). Orange: observed in Type IIa brownish/pinkish/nearcolourless CVD-grown diamonds (SW > LW).

Greenish-blue: seen in Type IIa colourless CVD-grown and post HPHT-treated diamonds (SW > LW). Orangey-red: observed in Type Ib HPHT-treated pink diamonds (strong LW = strong SW).

Though rare, other colours of fluorescence are possible in natural low-nitrogen diamonds (e.g. pink and red). It is important to note that although mounted melee and small sides can be tested for fluorescence, this must be done in an absolutely dark room and under high magnification using a UV lamp mounted on a microscope.

More to come of this story in Part 6.

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