| Commentary and Philosophy Non-Fiction posted July 11, 2015 |
  |
Stories from the jewellery biz
Inside Theft
by Spiritual Echo
For more than thirty years, I worked as a sales agent for a jewellery manufacturer. When I began my career on the wholesale side of the business, most companies were family owned, and security was not an issue. Owners liked to believe their staff was one big happy family, and no one would steal from the benevolent hand that fed the workers.
Of course, without exception, every factory with millions of dollars of temptation within every person's reach, experienced a rude awakening when a trusted employee was discovered to be a thief.
Security measures were slowly introduced and then became stricter as margins dropped. With tougher competition, shrinkage became a serious depletion of profit. In hindsight, the acceptance that theft was a daily occurrence became a heart wrenching experience for management. Suspicion replaced trust.
Metal detectors were installed and all personal jewellery was banned, causing great distress for employees who were asked to remove wedding rings while in the factory. Most companies required a waiver signed by workers that would allow pat-downs and a full search of lockers.
I witnessed many confrontations and incidents when someone was caught stealing. Some were clever schemes, while others were idiotic, desperate measures that were doomed to fail.
The shipper, who tossed a kilo of gold into the dumpster periodically, picking up the package after shift change, got caught, but only after he had stolen thousands of dollars worth of finished product.
Jewellers were clever. It became obvious (but only after this trick was well established) when a bench employee turned into a thief. He would start sporting a new hairdo, an Elvis-style pompadour needing a palm's worth of hair gel to keep it in place.
Each night, before leaving his station, the jeweller would take shavings from the bench and run his fingers through his hair leaving trace amounts of gold that stuck to the hair gel. The gold never registered when a hand-held wand was used. At home, he would wash his hair, collect the gold and usually cash in thousands of dollars of metal each year.
No one has more opportunity to steal than a diamond setter. Diamonds can't be scanned; they do not register on any detection device. For that reason, internal inventory systems exist today that require a setter to sign for each stone (or scan a bar code) and receive a release when the work order leaves his bench.
Rarely is a setter so naive or stupid to attempt to steal a diamond outright. Instead, when he receives a work order and stones to set, he replaces the company diamond with one from his personal inventory he carries into the factory in his lunch box. He then pockets the larger stone.
The carat size is actually a weight and can be easily measured on a scale when loose, but with variances in cut, some stones may be shallow with a broad table or surface. Even to experienced eyes, once a stone is set, a few points difference in the stone is impossible to notice.
Imagine what a setter's profit would be on a .05 difference on a 1:00 carat diamond that sells for $3000 per carat. Let me help with the math. Aside from his salary, perhaps ten dollars per stone, each diamond he substitutes nets the employee $150. Now, multiply that number by three or four per week and extend the formula for a year. A setter with good personal diamond inventory can easily augment his bench salary by thirty or forty thousand tax free dollars per year.
This practice is so common, it is referred to as the 'setter's pension plan.' The subtext to this broad title is the expectation that a single point diamond (.01CT) will grow (repeatedly substituted for a larger and larger stone) into a one-carat diamond in the hands of a good setter--or thief--depending on one's point of view.
Since I retired two years ago, I haven't given my old industry much thought, but acquired knowledge can't be erased just because I decide I don't need the data any longer. The old stories ran through my head as I was trying on sunglasses this week. I noticed a man watching me, and realised it was store security. In a flash, I recalled the statistics for retail shrinkage--theft at store level.
Sunglasses are by far the product most often stolen from department stores. A surcharge is added to each pair of glasses to off-set loss of profit. Merchants refer to the extra cost as a higher margin call, not a theft charge, but we pay twenty percent more for our shades than would be otherwise charged. Why? It is so easy to try on the sunglasses, pop them onto the top of one's head and walk out of the store.
If I wander back to the setter and look at what happened to the price of the diamond when it travelled down the consumer chain, ultimately someone paid for the setter's theft. Almost always it is the end-user, the honest customer.
The $3K diamond was actually worth $2750. The manufacturer was not aware of the reduced value and sold it to the retailer at the higher cost, taking a modest 15% profit. The retailer must pay many costs, including staff and rent and usually takes a 60% margin. In this instance, he chose to sell the ring at an everyday-low-price and took a mere 50% margin, pricing the ring at $6900.
If the consumer was paying the actual value of the ring he bought, the original $2750 value would wind up in the retail store priced at $6325.
The price of theft compounds at every point of the transaction, costing the love-sick guy buying his girl a ring an extra $575. Yet the only guy that got something for nothing was the original thief.
We pay the price for other people's crimes. Even if we turn away and say, 'it's none of my business,' there is a compound penalty we accept for our indifference.
But, don't mind me. These thoughts all came bouncing back when I realized that security was treating me as a suspect. I wondered how anyone could imagine I--ME--would steal something from Wal-Mart.
Changing times, I guess. I suppose we are all looked at as potential thieves or terrorists wherever we go. I chose to go home--without buying a thing.
For more than thirty years, I worked as a sales agent for a jewellery manufacturer. When I began my career on the wholesale side of the business, most companies were family owned, and security was not an issue. Owners liked to believe their staff was one big happy family, and no one would steal from the benevolent hand that fed the workers.
Of course, without exception, every factory with millions of dollars of temptation within every person's reach, experienced a rude awakening when a trusted employee was discovered to be a thief.
Security measures were slowly introduced and then became stricter as margins dropped. With tougher competition, shrinkage became a serious depletion of profit. In hindsight, the acceptance that theft was a daily occurrence became a heart wrenching experience for management. Suspicion replaced trust.
Metal detectors were installed and all personal jewellery was banned, causing great distress for employees who were asked to remove wedding rings while in the factory. Most companies required a waiver signed by workers that would allow pat-downs and a full search of lockers.
I witnessed many confrontations and incidents when someone was caught stealing. Some were clever schemes, while others were idiotic, desperate measures that were doomed to fail.
The shipper, who tossed a kilo of gold into the dumpster periodically, picking up the package after shift change, got caught, but only after he had stolen thousands of dollars worth of finished product.
Jewellers were clever. It became obvious (but only after this trick was well established) when a bench employee turned into a thief. He would start sporting a new hairdo, an Elvis-style pompadour needing a palm's worth of hair gel to keep it in place.
Each night, before leaving his station, the jeweller would take shavings from the bench and run his fingers through his hair leaving trace amounts of gold that stuck to the hair gel. The gold never registered when a hand-held wand was used. At home, he would wash his hair, collect the gold and usually cash in thousands of dollars of metal each year.
No one has more opportunity to steal than a diamond setter. Diamonds can't be scanned; they do not register on any detection device. For that reason, internal inventory systems exist today that require a setter to sign for each stone (or scan a bar code) and receive a release when the work order leaves his bench.
Rarely is a setter so naive or stupid to attempt to steal a diamond outright. Instead, when he receives a work order and stones to set, he replaces the company diamond with one from his personal inventory he carries into the factory in his lunch box. He then pockets the larger stone.
The carat size is actually a weight and can be easily measured on a scale when loose, but with variances in cut, some stones may be shallow with a broad table or surface. Even to experienced eyes, once a stone is set, a few points difference in the stone is impossible to notice.
Imagine what a setter's profit would be on a .05 difference on a 1:00 carat diamond that sells for $3000 per carat. Let me help with the math. Aside from his salary, perhaps ten dollars per stone, each diamond he substitutes nets the employee $150. Now, multiply that number by three or four per week and extend the formula for a year. A setter with good personal diamond inventory can easily augment his bench salary by thirty or forty thousand tax free dollars per year.
This practice is so common, it is referred to as the 'setter's pension plan.' The subtext to this broad title is the expectation that a single point diamond (.01CT) will grow (repeatedly substituted for a larger and larger stone) into a one-carat diamond in the hands of a good setter--or thief--depending on one's point of view.
Since I retired two years ago, I haven't given my old industry much thought, but acquired knowledge can't be erased just because I decide I don't need the data any longer. The old stories ran through my head as I was trying on sunglasses this week. I noticed a man watching me, and realised it was store security. In a flash, I recalled the statistics for retail shrinkage--theft at store level.
Sunglasses are by far the product most often stolen from department stores. A surcharge is added to each pair of glasses to off-set loss of profit. Merchants refer to the extra cost as a higher margin call, not a theft charge, but we pay twenty percent more for our shades than would be otherwise charged. Why? It is so easy to try on the sunglasses, pop them onto the top of one's head and walk out of the store.
If I wander back to the setter and look at what happened to the price of the diamond when it travelled down the consumer chain, ultimately someone paid for the setter's theft. Almost always it is the end-user, the honest customer.
The $3K diamond was actually worth $2750. The manufacturer was not aware of the reduced value and sold it to the retailer at the higher cost, taking a modest 15% profit. The retailer must pay many costs, including staff and rent and usually takes a 60% margin. In this instance, he chose to sell the ring at an everyday-low-price and took a mere 50% margin, pricing the ring at $6900.
If the consumer was paying the actual value of the ring he bought, the original $2750 value would wind up in the retail store priced at $6325.
The price of theft compounds at every point of the transaction, costing the love-sick guy buying his girl a ring an extra $575. Yet the only guy that got something for nothing was the original thief.
We pay the price for other people's crimes. Even if we turn away and say, 'it's none of my business,' there is a compound penalty we accept for our indifference.
But, don't mind me. These thoughts all came bouncing back when I realized that security was treating me as a suspect. I wondered how anyone could imagine I--ME--would steal something from Wal-Mart.
Changing times, I guess. I suppose we are all looked at as potential thieves or terrorists wherever we go. I chose to go home--without buying a thing.
Of course, without exception, every factory with millions of dollars of temptation within every person's reach, experienced a rude awakening when a trusted employee was discovered to be a thief.
Security measures were slowly introduced and then became stricter as margins dropped. With tougher competition, shrinkage became a serious depletion of profit. In hindsight, the acceptance that theft was a daily occurrence became a heart wrenching experience for management. Suspicion replaced trust.
Metal detectors were installed and all personal jewellery was banned, causing great distress for employees who were asked to remove wedding rings while in the factory. Most companies required a waiver signed by workers that would allow pat-downs and a full search of lockers.
I witnessed many confrontations and incidents when someone was caught stealing. Some were clever schemes, while others were idiotic, desperate measures that were doomed to fail.
The shipper, who tossed a kilo of gold into the dumpster periodically, picking up the package after shift change, got caught, but only after he had stolen thousands of dollars worth of finished product.
Jewellers were clever. It became obvious (but only after this trick was well established) when a bench employee turned into a thief. He would start sporting a new hairdo, an Elvis-style pompadour needing a palm's worth of hair gel to keep it in place.
Each night, before leaving his station, the jeweller would take shavings from the bench and run his fingers through his hair leaving trace amounts of gold that stuck to the hair gel. The gold never registered when a hand-held wand was used. At home, he would wash his hair, collect the gold and usually cash in thousands of dollars of metal each year.
No one has more opportunity to steal than a diamond setter. Diamonds can't be scanned; they do not register on any detection device. For that reason, internal inventory systems exist today that require a setter to sign for each stone (or scan a bar code) and receive a release when the work order leaves his bench.
Rarely is a setter so naive or stupid to attempt to steal a diamond outright. Instead, when he receives a work order and stones to set, he replaces the company diamond with one from his personal inventory he carries into the factory in his lunch box. He then pockets the larger stone.
The carat size is actually a weight and can be easily measured on a scale when loose, but with variances in cut, some stones may be shallow with a broad table or surface. Even to experienced eyes, once a stone is set, a few points difference in the stone is impossible to notice.
Imagine what a setter's profit would be on a .05 difference on a 1:00 carat diamond that sells for $3000 per carat. Let me help with the math. Aside from his salary, perhaps ten dollars per stone, each diamond he substitutes nets the employee $150. Now, multiply that number by three or four per week and extend the formula for a year. A setter with good personal diamond inventory can easily augment his bench salary by thirty or forty thousand tax free dollars per year.
This practice is so common, it is referred to as the 'setter's pension plan.' The subtext to this broad title is the expectation that a single point diamond (.01CT) will grow (repeatedly substituted for a larger and larger stone) into a one-carat diamond in the hands of a good setter--or thief--depending on one's point of view.
Since I retired two years ago, I haven't given my old industry much thought, but acquired knowledge can't be erased just because I decide I don't need the data any longer. The old stories ran through my head as I was trying on sunglasses this week. I noticed a man watching me, and realised it was store security. In a flash, I recalled the statistics for retail shrinkage--theft at store level.
Sunglasses are by far the product most often stolen from department stores. A surcharge is added to each pair of glasses to off-set loss of profit. Merchants refer to the extra cost as a higher margin call, not a theft charge, but we pay twenty percent more for our shades than would be otherwise charged. Why? It is so easy to try on the sunglasses, pop them onto the top of one's head and walk out of the store.
If I wander back to the setter and look at what happened to the price of the diamond when it travelled down the consumer chain, ultimately someone paid for the setter's theft. Almost always it is the end-user, the honest customer.
The $3K diamond was actually worth $2750. The manufacturer was not aware of the reduced value and sold it to the retailer at the higher cost, taking a modest 15% profit. The retailer must pay many costs, including staff and rent and usually takes a 60% margin. In this instance, he chose to sell the ring at an everyday-low-price and took a mere 50% margin, pricing the ring at $6900.
If the consumer was paying the actual value of the ring he bought, the original $2750 value would wind up in the retail store priced at $6325.
The price of theft compounds at every point of the transaction, costing the love-sick guy buying his girl a ring an extra $575. Yet the only guy that got something for nothing was the original thief.
We pay the price for other people's crimes. Even if we turn away and say, 'it's none of my business,' there is a compound penalty we accept for our indifference.
But, don't mind me. These thoughts all came bouncing back when I realized that security was treating me as a suspect. I wondered how anyone could imagine I--ME--would steal something from Wal-Mart.
Changing times, I guess. I suppose we are all looked at as potential thieves or terrorists wherever we go. I chose to go home--without buying a thing.
 Recognized |
You need to login or register to write reviews. It's quick! We only ask four questions to new members.
© Copyright 2024. Spiritual Echo All rights reserved.
Spiritual Echo has granted FanStory.com, its affiliates and its syndicates non-exclusive rights to display this work.
