In today’s marketplace, an online selling platform is almost a requirement. Online sales are global and can work for you 24 hours per day, 365 days per year. Online sales also give a jeweller a significant risk exposure. According to an article in The New York Post, 4.5% of online jewellery sales are lost to fraud which is more than double the e-commerce industry average.
All types of retail will experience some form of inventory shrinkage. In a brick and mortar store, video surveillance, tight inventory controls, RFID tags, and limited access to vaults and high-end goods are standard tools of defence against theft. Online fraud prevention is a little trickier, but there are steps you can take to minimise risk.
Before you mail anything of value to an unknown customer, you need to do some homework. Use Google Earth to view the shipping address. If the address shows an empty lot or an abandoned building, do not ship the item. You can check with the credit card companies to verify that a shipping address matches the billing address. Online payment portals like Paypal do this for you. On some selling platforms like eBay, you can research their buying and feedback history. You can see if they are a problem customer, with multiple returns. Or hopefully, they have a long history of similar purchases with positive feedback. If anything in your research is questionable or makes you uncomfortable, back out of the deal.
Tag and set limits
Attach a tag in such a way it must be torn off to remove. Make it large enough to be noticeable. The tag should say, “No returns if this tag is damaged or removed.” Include a statement on all receipts, correspondence, and in the box that states your return policies, such how long they have to inspect and return the item, that the condition must be the same as it was when sent, and the requirement for authorization before returning.
The most common online fraud is returning different merchandise than was purchased. It could be a stone switched for one of lesser value. In cases of a popular style, they may return a broken one while keeping your brand new item. To prevent this type of fraud, document everything. Take close up photos of any blemishes, marks, or other characteristic that can help identify that exact piece. Enclose copies of lab reports with a note that the original will follow after the inspection period. Record a time/date stamped video of the entire shipping process showing each step. Hold the item up to the camera. Package the item under video and hold the box with the item up to the camera. Seal the box, apply the shipping label and get another close-up.
Know your comfort level
Don’t send anything of high value or limited availability to an unknown buyer unless you are willing to take the risk. If you sell enough online, chances are you will occasionally lose the item. I know of several businesses that specialise in estates, liquidations, and close-outs. They sell the best of the goods to known and trusted buyers with enough profit that everything else in the deal is essentially free of cost. They can be a little more relaxed in their online sales as a few losses won’t hurt much.
With a bit of prevention, you can pursue new online customers in reasonable safety as long as you understand you may take an occasional loss. Fortunately, you will win more than you’ll lose so it is still worth the risk. Online sales can be a profitable revenue stream, especially once you develop enough regular, trusted buyers.