Jago Grahak Jago: Family jewellers give more value for money spent.

Bought jewellery from your neighbourhood jeweller then relax as you have invested your money in the right place. An Economic Times (ET) article today compares Branded/Online retailer vis-a-vis family jewellers. The comparision is on similar line as we have talked about in a blogpost 2 years ago ( read it here ).

Briefly the ET article talks about:

• Family jewellers ( like us ) price jewellery on a daily basis giving consumers the best possible prices, whereas online retailers and branded store use a fixed price concept raking in a margin of 50-100%.
• Family jewellers give a breakup of all the information like weight, making charges, buy back value whereas online retailers/branded stores arent always either so transparent or take their jewellery back or give ridiculously low value in return.
• This concept of fixed pricing thus goes against the very reason for buying gold/diamond jewellery if it cannot give you a better return.

Read the entire ET article here: http://bit.ly/hh73tN

Tip: How to identify an old gold/diamond jewellery piece

This is only possible with a hallmarked jewellery item. You can identify whether a peice of jewellery lying in front of you is old or new. Yuo can precisely tell how old a jewellery piece is.


Hallmark is an assurance of the quality of a precious metal like gold and silver jewellery in India. There are five symbols which are laser engraved on any hallmarked jewellery . In the picture below you will notice the 5 symbols namely the Hallmark symbol, the purity of gold which is 916 ( i.e. 22k), the assay centre's logo, the jeweller's logo and the year of hallmarking ie. J.


This last peice of information is what reveals the age of the jewellery in the picture. The hallmarking process was started in year 2000 so the corresponding symbol is A. The table below illustrates the corresponsing hallmark symbol for the subsequent years.

'A'	Year 2000	'E'	Year 2004
'B'	Year 2001	'F'	Year 2005
'C'	Year 2002	'G'	Year 2006
'D'	Year 2003	'H'	Year 2007

So now my dear friends you knwo the jewellery item in the picture above is hallmarked in the year 2009. So next time you see a hallmarked item with a F you know it was manufactured way back in 2005.

RL1854 takes up industry reform for 1gm gold jewellery

I was surprised to know that 1-gm (imitation) jewellery trade too was under the same attack as precious metal jewllery is. In precious metal jewellery customers were being undersold, whereas the reverse was happening in imitation jewellery. Consumers were being oversold. Fortunately for gold and silver sold in any form/caratage of jewellery BIS has taken the right step by coming out with Hallmarking guidelines and implementing them through Assay labs. The immitation jewellery sector was not so lucky as the base metal in that category is made of metals other than gold/silver.

There was an opportunity lurking and most retailers grabbed it the wrong way. So this sector became a money spinner for the retailers and the consumer was being fleeced. It also meant an opportunity to comeout and standardize the sector. Amrish Jain of Aarel Jewellers Pvt Ltd. rose to this occasion. Aarel bought out advertisement in quite a few national dailies and started blogging to educate people on the current state of affairs and thus in one fell swoop became the undisputed leader in immitation jewellery.

It takes a lot of guts, conviction and vision to stand out from the crowd. Its tough to say 'STOP' to a practice in which the entire industry is consumed. And when you can do that , thats when you are reckoned as a leader.

We need few more jewellers to recognise its an opportunity to believe in 'It's profitable to be ethical.'

Disclaimer: Kathana Jewellers does not stock 1-gm jewellery.

Do Diamonds in diamond jewellery have no resale value?

.......was a simple question posed by Poonam who stumbled on our blog recently. I was on the phone with the enquirer who is getting married in March 2009. She wanted to know this because thats what she heard from her friend. That diamonds are worthless in an old diamond jewellery.

Diamonds in diamond jewellery are usually very small in size compared to a solitaire ring. Often called melle or star in industry lingo. These diamonds are usually cut and polished from the fragments(leftovers) of cutting bigger diamonds.

When returning to the same jeweller where you originally bought the diamond jewellry from, the best practise is deducting 10% of the entire value and making charge. The 10% deducted is on account of losses due to broken diamonds. Yes even though diamonds are the strongest natural substance known to humans, they do break when jewellers try to salvage whatever they can from the scrap(old gold ornaments).

The severe competition among jewellers discourages a common shopper to try selling the old diamond ornaments purchased elsewhere. Any jeweller is reluctant to pay you the price you paid to another jeweller. Otherwise a diamond is a diamond and even a small diamond dropped on the floor in our manufacturing unit leaves the Karigar scurrying for a broom to sweep it in.

Deconstructing a Jewellery Advertisement

This is a picture of a typical ad published in print. It came out in the middle week of February and is a perfect example to talk about the current state of affairs in jewellery retailing. I have deliberately blurred the name and contact of the jeweller because this isn't about finger pointing but more about education. To make it simple I have numbered the issues I will bring up in this post.

But first lets consider the advt. Its really straight out of a thriller and can set your pulse racing by the time you finish going through it.

1)Bombay Rate Showroom
Gold is inexpensive by almost Rs.150-200 per 10 grams in Bombay and if you can get the same price in a Delhi showroom then its clearly a Sone Pe Suhaga(if I may borrow the title from our blog).

2)Today's Gold Rate
The gold rate of Rs. 9590 per 10 grams advertised during the second week of February when the gold rate was hovering close to 12,000 is almost a 20% below market rate. You may rightly argue that you are being passed the benefits of "frozen gold prices". Gold purchased by the retailer when the prices weren't blood sucking.

3)Low, So Low Making Charges
Almost as important as the "frozen" price of gold is the oh-so-low-making charges. So low that its hard for even a seasoned bargain hunter to come up with any reason not to give it a second thought.

4)100% Buy Back Guarantee
Usually accompanied with " Hum hain Naa, Behenji". This guarantee will unarm a naive or seasoned customer alike. A 100% buy back guarantee is sure to convince you of the value you are getting.

5)Rs.4000 per Carat Diamonds
Diamonds so affordable. Now who wouldnt give in to that.

Now consider these simple questions YOU as a consumer can ask.

1) Is It HALLMARKED?
Just this question is enough to dilute the positioning, first 3 points in the ad had taken. I have done some back of the envelope calculation to show how this one critical question can make the gold look copper and low making charges look a big sham in disguise. The economics of selling below market price is questionable. I have raised this issue earlier(Check out the related articles).

2) Is Buy Back is equal to Cash Back and not Exchange Back?
It is a guarantee of taking back the jewellery but assuming its going to be a cash back offer can put you in soup. It might well be an exchange only offer. This brings to the next question. If exchanged, Do I lose 10% of the value or 20% 0r even 30%?

3) What color, shade are these diamonds for?
Knowing that you get what you pay for is especially true in case of diamonds. The diamonds at this price are usually brown in shade, which is not clearly evident because they are mounted.

Marketing can be cleverly used to disguise real issues like hallmarking, buy back etc. Hope this makes you a more informed buyer.

Related Articles:

Handling Volatile Gold Prices: A Jeweller's Perspective
Take a hard look at buy back policy
How to avoid the Low Making Charges trap when buying jewellery

Handling volatile gold prices: A jeweller's perspective

"You guys must be making a killing with the high gold prices" quipped a customer recently. And went on to elaborate that since a jeweller has a huge stock which was bought prior to this price surge, when the gold rate was Rs. 10,000/10 gms. Its a no brainer that with current prices his logic seemed correct. Think for a moment gold bought at 10,000 and sold at 11,500 is certainly a 15% hike in a span of few weeks. Plus there is making charges. Phew!!

He even suggested that we should freeze our prices at say Rs. 10,500 and that would attract a lot more customers. A smile broke on my face on hearing this.

But what would happen if the prices were to fall suddenly because that too happens. Then a jeweller would certainly have to face huge losses?

The volatility of gold prices is largely unpredictable but the jeweller community has found an ingenious way to handle it. Whenever a jeweller makes a sale at say Rs. 11,500 within minutes the same quantity of gold is purchased from the bullion market at around the same prices. which means the jewellers stock of gold is maintained constant. Whether that happens now when the prices are at 11,500 or when the prices were Rs. 10,000, I explained.

Almost immediately came the next question: So how do jewellers who advertise a lower rate than the prevailing rate do it. Simple try spotting the hallmark logo or claim of the jewellery being hallmarked on that advertisement. Chances are it isn't.

Related Posts:

Deconstructing a jewellery ad

Madatory Hallmark from Jan 2008: The Fallout

As I had promised earlier I am covering the story of the BIS mandate to make Hallmarking cumpulsory from Jan 2008. It was pretty evident (to us) that this implementation will have its fair share of hiccups. For a preview of what the issue is about read our earlier post.

On 14th Decemebr 2007, we received a notice from the Karol Bagh Jewellers' Association (which we are a member of) to observe a 'bandh' against the BIS mandate. I am quoting the notice verbatim:

As per the decision of All Delhi Sarafa Association and Delhi Bullion Association there is a call for "Jewellers Bundh" on Friday 14th Decemebr 2007, against the implementation of "Hall-Mark BIS". As the law is very tough and will bring Babu Raj in the industry. Jewellers had asked for lots of amendments for which BIS & GOvt. has not responded positively, so this bundh is being observed. Kindly co-operate and unite together.

Lets analyze some of the demands of the jewellers:

• The jewellers want the year markings viz 'A', 'B', 'C'... and so on be made optional or done away with. This years markings is 'H' and soon its going to be 'I' for the next year. In 2008 jewellery of last year and years before that, might not necessarily be attractive to a customer.
• The Assayists bill a minimum of Rs. 350 even though individual items only cost as low as Rs. 50 to get hallmarked. So if a jeweller went to get just 1 item hallmarked, they would be charged the minimum amount. This amount cannot be passed to the consumer as making charges for a small item for e.g a earring, top or ring.
  
• Jewellers in other parts of the country like Gujarat claim the lack of enough hallmarking centres around them to enable easy and frequent hallmarking.
  

This is an initial list and we are sure there are many more.

On the other hand the govt's move is clearly aimed at helping the consumers who have been a 'cheated' lot. And such a standardization would give some peace of mind for the consumers.

Its clearly a battle of profits vs purity.

Updated: 17/01/08

Solitaire International( a Jewellery trade magazine ) has an article covering the hurdles for countrywide adoption of Hallmarking at http://tinyurl.com/2s6q6f

Hallmark Mandatory From Jan 2008...Really?

Any gold jewellery sold after Jan1, 2008 should be Hallmarked hence forth, says the Bureau of Indian standards. On the surface this looks like a good deal for the shoppers of gold jewellery but hold on there's a caveat.

This rule applies to Jewellers in the metros of Delhi, Mumbai, Chennai and Calcutta for now which means people living in the rest of India will still have to hunt for the Hallmark jewellers.

Within the metros too I bet it will be a while before BIS can really implement it. It is largely because the BIS is severly understaffed to enforce this. Also the industry grapevine doesn't seem to prove me wrong. So the aforementioned metro shoppers: You need to be on your toes too.

I will update on this blog as and when I find more on this front.

Exceptional Customer Service: Every Business Can Implement It.

One of the most indelible memories of US has been its customer service at department stores big and small alike, restaurants, coffeeshops and everywhere else. So naturally when I came back after a 4 year stint there I tried to imbibe this culture at our jewelry store.

I am fortunate to have a family which supported me all along when I wanted to implement ideas I learnt from the west to the jewelry store. But there were voices of dissent among relatives, customers who wished us good and friends who thought Indian customers are too untrustworthy to place the trust on.

The customer service I am talking about ranged from 30-Day Money BAck at Targets,Nordstorm etc, free dessert because we made you wait for it a little too long at Applebees in Salem, Oregon, or dont worry about the wallet you forgot you can pay us next time at Starbucks, Wilsonville, Oregon. I was bound to get infected and bound to give this a try in its own flavor back in India.

Besides Customer satisfaction, there is a business case for it:

Joel Spolsky puts that in words what we had all along known and I quote from his blog

The no-questions-asked 90-day money back guarantee was one of the best decisions we ever made at Fog Creek. Try this: use Fog Creek Copilot for a full 24 hours, call up three months later and say, “hey guys, I need $5 for a cup of coffee. Give me back my money from that Copilot day pass,” and we’ll give it back to you. Try calling on the 91st or 92nd or 203rd day. You’ll still get it back. We really don’t want your money if you’re not satisfied. I’m pretty sure we’re running the only job listing service around that will refund your money just because your ad didn’t work. This is unheard of, but it means we get a lot more ad listings, because there’s nothing to lose.

Over the last six years or so, letting people return software has cost us 2%.

2%.

Similarly, Over the last 11 months since we implemented a '30-Day 100% Money back' in our store we haven't had a single return. And I am not kidding.

Making Charges In Gold : A Classic Overhyped Marketing Gimmick!

Seth Godin would have loved to point this in his book All marketers are liars. The case in point is the making charges in jewellery of any kind be it gold, diamond or semi-precious stones.

Making charges are what a consumer pays above the price of gold(on a certain day) for crafting the gold into jewellery. This varies from item(viz. bangles) to item(viz. chains) and from one jeweller to another. Usually the going rate starts upwards of Rs.60/gram.

Somehow for some marketers this parameter is the most important thing to consider when buying/evaluating gold from a retailer. You cant miss this fact especially on different radio channels where every other jeweller is trying to beat the competitor on just this parameter.

Infact so intense is the competition and so unmeasurable the delight of consumers that I recently came across a customer who boasted of Rs.10/gram of making charges from another jeweller.

Why has this parameter stolen the limelight when there are parameters more worthy to consider or highlight?

This stems from the basic instinct in humans: To get a good bargain for the deal at hand.

So whats wrong with that?
This takes me back to what said earlier. There are more than just one parameter to consider when buying gold. FInd out the return policy on your jewellery. You should ideally get a trial period of atleast a month beyond which expect to lose only making charges when you return your jewellery. The diamonds should be certified by reputed houses like GIA,EGL and IGI. The jewellery should be BIS hallmarked. It should indicate all the 5 signs BIS recommends.

On prompting more the customer pointed that his low making charges were on unhallmarked gold jewellery. Here rests my case.

Related Posts:
How to avoid the Low Making Charges Trap in Jewellery

100% Lifetime Buy Back vs. 30-Day 100% Money Back

100% Lifetime Buy Back guarantee is one of the most prominent trade practices in the jewelry industry. This practice stands for an unwritten promise made by the Jeweler ascertaining that if at anytime you want to return your gold jewelry & diamond engagement rings, the Jeweler will buy it back from you at the rate of gold or diamond on the day of transaction. The benefit of this policy is that your gold jewelry can be considered as a form of investment and on any given day it is worth its price in weight! The fallout of this practice is that your final jewelry price constitutes: making charges and wastage in addition to the gold cost and as a customer you stand to loose 15-20% of your investment in the form of these charges.

In comparison, a 30-Day 100% Money Back guarantee is a relatively new and unheard concept in the nation. This practice promises you a “trial period” of 30 Days to decide if you are completely satisfied with your purchase or not. In the event of dissatisfaction or any confusion at all, you can return back the jewelry and get ALL of your money back. If instead, you decide to go ahead with the purchase, then beginning 31^st day, your jewelry is covered under the “Lifetime buy back guarantee”.

The benefits of 30-Day 100% Money Back guarantee are many:

1. You have an entire month to think over whether you would like to go ahead with your purchase or not.

2. You have the time to discuss with your family and friends in the comfort of your own home if you are satisfied with your purchase.

3. Finally, in the event of any doubt, this also gives you a fair chance to get the jewelry inspected for its quality and price by others.

What is Hallmark Jewellery?

As news of naive customers taken for ride by jewellers makes news headlines in prominent newspapers like this Gold not as pure as claimed, finds BIS survey, this Customers lose over rs.10000 Crore annually and this wonderful article by Shailendra Kakani Hallmarking to increase gold consumption in India point it becomes increasingly "smart" to learn a little more about hallmarking expecially if jewellery shopping is imminent.

Now coming to the title of this post.

According to Bureau of Indian Standards (BIS) "Hallmarking is the accurate determination and official recording of the proportiante content of precious metal in jewellery. Hallmarks are thus official marks used in many countries as a guarantee of purity or fineness of gold jewellery".

BIS is a regulatory body of the Govt. of India which has standardised various products consumed today.
It is very important to understand the benefits provided by ensuring Hallmark Jewellery. As pointed out on top , A BIS survery found 90% of the smaples below state dpurity. Some as low as 44%. Consumers lose more than Rs. 10,000 crore annually due to this fraud.

So how can one identify Hallmarked Jewellery?
There are 5 visible marks on the back of your jewellery which are mandated by BIS (more here).

1. BIS Hallmark Logo
2. Purity of Gold '916' -22ct, '875' - 21ct and so on.
3. The Hallmarking centre's Logo.
4. The jewellers' identification mark.
5. Year of Hallmarking 'A' -year 2000, 'B' -year 2001 .... 'H' - year 2007.

So armed with this knowledge and a magnifying lens( the marks are usually very small to be legible with naked eyes) you are ready to give your local jeweller a hard time:)
Related Posts:
Hallmark Mandatory from Jan 2008...Really?

Mandatory Hallmark from Jan 2008: The Fallout
Hallmarking Jewellery NOT mandatory after all
TrustMark : Is it better than Hallmark?
Diamond Engagement Rings

Related Articles:
Hallmarking: Need of the Hour