Four Mistakes Jewelers Make on their Annual Physical Inventory
(May 19, 2020 – New York City) Is your business still closed? Or, perhaps it’s open limited days during this coronavirus era? Jump at this opportunity to conduct a complete physical inventory of your store’s merchandise for sale if you haven’t already done one this year.
Maintaining accurate, updated inventory records provides important benefits:
- identifies what inventory is selling, what’s not and what to re-order
- verifies appropriate insurance limits for your Jewelers Block policy
- speeds processing of your insurance claim in the event of a loss
- helps detect inventory “shrinkage”
Greg Smith, Executive Vice President – Claims at Berkley Asset Protection, has spent a career looking at inventories to determine claim payments for jewelry losses. He offered the following advice.
THE KEY TO A FAST CLAIM PAYMENT
“Whether it’s a sneak theft, burglary, robbery, weather event or other loss, the key to receiving a fast claim payment is identifying what’s missing,” he explains. “Jewelers tell me they ‘know’ what’s missing, but state insurance departments require insurance companies to document why we cut a claim check for a specific amount.”
AVOID THESE MISTAKES
Mistake 1: Not doing an annual physical inventory, which involves counting each item for sale to document that it exists and tying the item to purchase documents. This is the starting point to prove an insurance loss. It’s nearly impossible to prove what’s missing without this document, Smith advises.
Mistake 2: Failing to keep the original purchase documents.
Mistake 3: Storing the only copy of the inventory at the store. Fire, storm or a thief’s sledgehammer may damage your computer or paper files. Save your annual physical inventory multiple places and in different formats, including: 1) your computer, 2) cloud-based, password-protected site, 3) USB drive kept off site, and 4) printed copy kept off site.
Mistake 4: Failing to track sales. Every time you sell an item, you must update your inventory.
While most retailers today use a store management software that includes an inventory control and record system, some jewelers rely on a manual system. Either way, a successful business requires good inventory records. And good records require on-going maintenance.
For more information about inventory record keeping for retail jewelers, go to https://BerkleyAssetPro.com/Inventory-Record-System/.
About Berkley Asset Protection
Berkley Asset Protection, a Berkley company, is a leading specialty insurance provider that offers insurance for all aspects of jewelry and fine arts businesses: jewelers block, fine art, commercial property and liability, and workers’ compensation. The company also offers Lavalier Personal Jewelry Insurance and coverage for individuals’ collections.
For information about Berkley Asset Protection, visit BerkleyAssetPro.com.
Products and services are provided by one or more insurance company subsidiaries of R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued.