In the Loupe December 2020 Edition

I N

T H E

LOUPE

The Premier Jewelers Cooperative

D e c e m b e r 2 0 2 0 • I s s u e 94 LOOKING FORWARD to a

Happy NewYear IT’S TIME TO PUT 2020 in the history books (for many, that can’t come too soon) and with it another successful year for RJO. The year started off strong for jewelers and vendors, having recently marked a milestone of more than 1,000 members.

Also, the largest RJO dividend was being celebrated, and during the Buying Show in Houston, a record was set for the greatest sales ever at a winter Show.

Then COVID struck, and in some instances, the results were swift. From a national shutdown of in-person business, to guidance regarding limits on the number and behavior of staff and customers, retail was suddenly not very predictable.

Guesses as to how the virus year would play out were just that—guesses. As late as May, the RJO Board was still hoping some version of an in-person Buying Show in St. Louis could still be held.

In June it became clear an end to the virus’ effects would not come in 2020, and RJO and its members rose to the

occasion by making safety a priority, securing family and staff as best they could, and developing exciting and innovative ways to make the best out of a bad situation.

RJO took a lead in helping members, be it with communications, billings, or payments, but also by developing a virtual Buying Show in short order. Attendance was good, sales were solid, and many lessons were learned for the future.

Additionally, RJO has been leveraging its extensive reach within the jewelry industry, seeking partnerships and collaborations whenever they arose.

Currently, negotiations are underway to see if there is an opportunity beneficial to RJO members in working with the Atlanta Jewelry Show scheduled for early March of next year.

As the end of this (lonnngggg) year approaches, please keep an eye on RJO’s Facebook page and our email blasts, to learn more about what the new year will be bringing to all of us.

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In the Know with RJO

Innovating Through a Chaotic Year FROM MY PERSPECTIVE, this past year will long be remembered as one wild ride, particularly for RJO. My first hint of uncertainty on the horizon came in late March, in discussions with our host hotel for the upcoming Summer Buying Show. Our conversations began with considerations of possible reduced room blocks, evolved into potentially moving dates back, and then to the “this is real” negotiations over deposit refunds. During the next five weeks, RJO had gone from our regular bustling office of a dozen staff—planning, among many things, an annual event for more than 1,000 guests—to one of employees working from home, an increase in calls from members for information and help, daily check-ins with the RJO Board, and eventually the canceling of all offerings involving in-person contact.

Plot-wise, I thought we might be at the same point as The Grinch, when his overstuffed sleigh was tilting back and forth on the edge of Mount Crumpit, not knowing which way the sleigh would eventually go. But very much like the Dr. Seuss tale, we veered toward an unexpected, but happy ending.

Vendors came forward and offered flexibility with billing, as well as safe and new ways of online commerce, which was able to be implemented quickly. Newer jeweler members, representing an idealism of a new generation, rolled with the national shutdown, increasing the use of video in their social

media and demonstrating how technology allows for quicker turnaround and much less expensive testing for new marketing ideas and concepts.

Members who have a few generations of retail jewelry service under their belts also found some silver linings among the pandemic’s gray clouds. One jeweler described to me how COVID lit a fire under her to move forward much faster with her social media plans. Another mentioned a storewide effort to quickly redesign their website to better match the online shopping experience with the one customers get in the store.

Innovative thinking came from the veteran jewelers as well, one going face-to-face with the virus’ doom and gloom: “We’ve seen tough times before, and we’re just going to hunker down and power through it. We’ve spent a lot of time, energy, and money into building a great staff and store, and we’re not going to just let it all go away. We’ll invest in keeping them, just as we would any other important expense.”

And the result of innovation amid chaos? Well, I can honestly say vendors and retailers alike are reporting some of their best holiday sales ever, likely influenced by customers with cabin fever who may have a bit more money than usual. This should make for a happy, jewel-filled holiday for everyone, on both sides of the counter.

From all of us here at RJO, I wish to you and yours a very joyous holiday season and an innovative new year.

Sarah Streb RJO CEO

RJO BOARD NEWS THE BOARD OF DIRECTORS recently held its Fall meeting—virtually—on November 17. Some main topics included: the approval of the 2021 budget, possible collaborations with industry partners such as JBT and the Atlanta Jewelry Show, and the decision was made to waive the $25,000 annual minimum purchase policy, for 2020 only. The Board's next meeting will be in mid-January, to finalize the 2020 dividend.

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From RJO’s Facebook Page SERVICES Centralized Billing Patronage Dividend RJO Website (rjomembers.com) Buying Shows (Fall/Spring) In the Loupe – RJO’s newsletter Free Print and Radio Ad Library (on the RJO website)

THE RJO PAGE ON FACEBOOK hosts a variety of interesting discussions every day. Here is an edited exchange from a posting that appeared earlier this month: Post: Anybody have any brilliant ideas for January billboard creative?

I am lacking inspiration right now.

Reply One: “We could all use a new year.” I’ll be playing with that idea in my ads.

Reply Two: “Did you get her a vacuum for Christmas? If so, come see me.”

Educational Seminars

Reply Three: Consider a simple upside-down photo with your store name and saying, “New Location.”

(at the Buying Shows)

Member-to-Member Incentive Program (Recruitment Program)

Organized Buying Trips to Antwerp and IdarOberstein RJO Directory Travel Vouchers at Shows (offered at varying times)

Reply Four: “The Future is Bright,” with an image of a big shiny diamond engagement ring.

Reply Five: “Luckily, Hindsight is 2020. Be Her 1 in 2021.” Run it with an engagement ring somewhere.

Free Hotel Room Incentive (at the Buying Shows)

RJO Informational Email Blasts Purchase Vouchers (at the Buying Shows)

RJO Membership Certificate RJO Next Gen and RJO Succession Experiences Private Label Credit Card Service JewelConnect Scholarship Opportunities

Does RJO Have Your Most Up-to-Date Email Addresses?

If you’ve changed your email address lately or would prefer to receive RJO communications at a different address, please let us know.

Address updates and changes can be directed to Erin Sharp in the RJO office at: erin@rjomembers.com

(from the RJO Foundation)

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THROUGH THE GENEROUS DONATIONS of our members and vendors, the RJO Foundation has awarded to-date, about 90 RJO members nearly $50,000 in scholarships. The Foundation supports the advancement of the jewelry industry by providing scholarships and grants to individuals or programs. This Fall’s winners are: CHRISTINE GRAICHEN Malloves Jewelers

ALEXANDER MALYSZKO

AMANDA STUBEN J. Thomas Jewelers

SIERRA DUBBELD

Your Private Jewelers

Haywood’s of Westlake

REBECCA SAMPSON

AARON JONES

JULIE GOULDENER

CELINA SIMON

Hobbs Jewelers

Nelson Coleman Jewelers

Tammy’s Jewelry

T. Simon Jewelers

ELIZABETH CHAMBERLAND Georgetown Jewelers

Click on an image or a name to view a profile of each winner.

The InterWebs: Why Use QR Codes for Your Store?

IT WASN’T LONG AGO when I was told—in no uncertain terms—the QR Code (QRC) was dead.

I actually have a presentation I did at RJO in 2014 where I presented this “fact” and then went-on to call it total nonsense. I have always asserted that the QRC is extremely useful, and it looks like others felt the same way. These others I speak of are much more important than me; they are Google and Apple.

Why do I say this? Well, it once was that QRCs needed to be scanned by specific QRC apps. If you had the app (and many did) you were good to go, but it was not 100% mainstream. It is now, and I know this because nearly any camera phone will recognize a QRC and give you options (such as ”open link”). It’s built right into the operating system now. That makes it ubiquitous. That makes it useful.

I won’t go too much into what a QRC is. You’ve probably seen them. It’s that square pixel box you scan with your phone. When scanned, the phone can do a few things, but the one that is used the most is a link to a website. Looked at in another way, a QRC takes something from print ... to a phone. Worth remembering here is that “print”

means anything from an ad in the paper to a sign on your door, car, or anywhere else. I see golf shirts with QRCs all the time—even with “Scan Me” emblazoned above them. This may seem an obvious statement, but getting your stuff on someone’s phone is a really good idea.

In a world where doors may be closed a little more than usual, a QRC can take a person to nearly any of your information. It can take them to your phone number for a 1-click call. It can take them to your hours, a special offer, social media, or anything you like. The people you’re trying to access know how to use a QRC. “Mega-apps,” such as Whatsapp, use them, as do various other person-to-person sharing apps. The people buying engagement rings know how to use a QRC (trust me!). The question is: Do you know how to get them to interact with yours?

There are number of QRC Generators (the one atop a Google search is: www.qr-code-generator.com).

These allow you to make a QRC out of information, such as a link or newspaper article and print it. I am sure you can think of loads of ways to make this work—so give it a go. What would you like to tell potential customers standing in front of something you can add information to?

Let the fun begin!

Andy Boundy is the owner of VRB Internet Solutions Ltd., an RJO web developer vendor and manager of several systems, such as JewelConnect, RJOCustomHatch, Repair.Jewelry, and more. He has been creating and managing web sites, systems and digital marketing programs since 1999.

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NEW VENDORS

Below are your newest RJO vendors. Please view the RJO Vendor Directory for additional information, discounts and terms.

AUTHENTIC GEM IMPORTS Pradeep “Pete’’Vaidya Dallas, TX (800) 527-7617 www.shopagi.com For more than four decades, Authentic Gems (AGI) has been a one-stop shop for loose precious gemstones, pearls, finished diamond/gemstone jewelry, and diamond basics (calibrated melee, studs/bracelets programs).

D’AMICO MFG. CO. John & Jason D’Amico Greenville, RI (401) 949-0023 www.damicomfg.com D’Amico Manufacturing is a small family business of 20 years. We manufacture our entire line in Rhode Island. All of our product is made in the USA. We manufacture solid cross pendants, bracelets, sea life and Irish jewelry. We also can manufacture custom items with a quantity piece order. We have an eclectic line, due to suggestions from our retail customers.

EARTH PEBBLES FINE VINTAGE & ESTATE JEWELRY Rebekah Anderson Raleigh, NC (919) 307-3002 www.earthpebbles.com Passionate about capturing vintage and estate jewelry, refurbishing/ repurposing selling below wholesale in hopes to continue its journey allowing others to add to the story. We sell fine vintage and estate jewelry from all significant eras.

EDGEWATER JEWELRY GROUP Saul & Mitchell Waksman Miami, FL (305) 373-8955 www.ewjewelry.com Edgewater Jewelry specializes in amazing deals and closeouts in every category. Our 40 years of jewelry experience has created unique opportunities to get highquality finished product. We offer a diverse selection and friendly customer service. We are proud to announce our total inventory, live on a wholesale-only website available now to all RJO members.

We also offer manufactured jewelry from around the globe. All of this product has a lifetime warranty and can be found in our catalog or website.

ELYSIUM BLACK DIAMOND Coby Dixon, Troy Medford & Ari Coleman Orem, UT (385) 484-9670 www.elysiumdiamond.com World’s first solid diamond ring.

Elysium rings won’t scratch, tarnish, or fade. More timeless than any other material in the world!

IJM / MORRIS & DAVID Morris & David Yerosh New York, NY (212) 869-0465 www.morrisdavid.com IJM is a family-owned business based out of New York City for over 30 years. We manufacture everything at our own factories. We are a very friendly and easy company to work with, and we fully stand behind everything we sell.

We use 100% all-natural diamonds.

MICHAEL COUCH & ASSOCIATES Michael Couch, Julie Moser, & Tabi Miller West Des Moines, IA (515) 256-0445 www.mcagems.com A wholesale supplier of fine quality gemstones and luxury sapphire jewelry. Our jewelry is classic and elegant, with brilliant pops of color using fancy sapphire and other colored gemstones; we also add the occasional diamond accent. We manufacture in 14k white, yellow and rose gold, as well as sterling silver.

ORO ALEXANDER Dan Alpert & Zvulun Gabay Encino, CA (800) 782-1231 www.oroalexander.com Distinctive, expertly crafted fine diamond jewelry with curated designs, ranging from timeless classics to sophisticated, contemporary, and trend-forward collections. Prime vendor with wholly owned factory overseas, we pride ourselves as being supplier of choice for many distinguished retail partners, with relationships spanning over decades.

PARADOX FINE WATCH CO. Chris Caprio & Mickey Goldberg New York, NY (212) 254-9851 www.paradoxfwc.com In business for over 25 years, the authorized distributor for Garmin and Wrangler watches.

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Vendor Profile

ASHI Diamonds: Nobody Does ‘I Do’ Like We Do! LOCATED ON THE 14TH FLOOR of an office building just one block west of Grand Central Station in New York City is the headquarters of ASHI Diamonds. Sanjay Pandya started ASHI as a loose diamond company in 1984 in New York’s Diamond District, after doing his training in New York, India, and then via GIA. Brother Rajeev joined the company in 1987 after graduating from NYU’s Stern School of Business; he started the jewelry division in 1989. The company has since diversified, and today is a vertically integrated jewelry manufacturer with offices in New York, Mumbai, Hong Kong, and Indore.

“The business was started by an investment from my father, Dr. M.K. Pandya, M.D., who was a cardiologist and the inspiration and guidance of our mother, Asha Pandya, who was raised in a business family,” says Sanjay. “In fact, the inspiration of the company’s name is from my mother’s name.” Most RJO members know the company by the name ASHI, a short form the brothers also use. Lesser known may be their company’s motto: “Nobody Does ‘I Do’ Like We Do!” “At every price point, a most important factor is the aesthetic design, quality and workmanship and finish of the jewelry,” Sanjay continues. “This is an important hallmark of any ASHI piece of jewelry.”

“It’s family run and going into the third generation,” says Rajeev. “It’s a company founded with its roots in New York. We are one of the unique companies in the jewelry industry that integrated from its founding in the United States, back to India and China.”

Just before Thanksgiving, ASHI made a $50,000 donation to Click for larger view

Americares, a health-focused relief and development organization that responds to people affected by poverty or disaster with life-changing medicine, medical supplies and health programs. According to Rajeev, this initiative was undertaken by the company’s next generation—Vivek and Paras Pandya—who both joined ASHI in the last three years.

“They felt that ASHI needed to give back to the frontline workers in the community where ASHI and our retail partners are located,” says Rajeev. “They both felt that there was an urgent need to help our communities across the U.S. They did a thorough research on the non-government-operated nonprofits that had decades of experience and credibility in the distribution of healthcare and medical assistance. Americares came out on top of the list. After the detailed review, they spoke with the Americares management team and decided to enter a partnership where ASHI would make the donation.”

Viewing their network and related communities as a family is complemented by their 15-year membership as an RJO vendor.

“RJO is run and operated like a big family, just like ASHI is,” says Sanjay. “We feel that we are a full partner in the success of the RJO retailer, and RJO treats the vendors as a critical part of their operations and the success of their retail members.”

This family approach has helped them not only survive, but thrive during COVID-19 mitigation efforts in New York City.

“Initially when New York was the epicenter of the pandemic,” says Rajeev, “and we were closed from the middle of March to the middle of June, we thought the bottom would fall out of the business.

Fortunately, the business climate changed. It seems the discretionary income that would have normally gone to travel, hospitality, dining, and events was diverted to the jewelry industry. Consumers probably felt that there is no better gift to give to a loved one than a piece of jewelry that would be worn, cherished, and provide comfort through the pandemic and across a lifetime. As our retailers did well, we in turn were the beneficiary of their success.”

ASHI Diamonds is located at 18 East 48th Street in New York, NY Phone: (212) 319-8291 Website: www.ashidiamonds.com

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Podium

Thriving—Not Simply Surviving—During a Chaotic Year 2020 AS A WHOLE has looked incredibly different than the average year, and the 2020 holiday season will be no exception. When the first lockdown occurred, local businesses got scrappy and found ways to adapt. Simply finding a way to stay open and operational took a lot of creativity and innovation, and now finding a way to make the holiday season successful is taking a lot of the same grit.

convenient that we kept it going.

We operate our curbside Diamonds program by appointment only, so it’s best if we have everything arranged prior to the customer’s arrival. We alert customers via text when special orders arrive and take payments in advance through text, so we can have the item wrapped and ready to go! This has been the best solution for keeping our team and customers safe, it’s been great!”

As COVID-19 cases have risen and cities around the U.S. have faced another round of lockdowns, businesses are rightfully concerned.

At Podium, we had a front row seat earlier this year as businesses learned to adapt to unusual circumstances. Not only were many businesses able to survive, but many increased sales. How? They used messaging tools to connect remotely with website visitors, text customers, and even collect payments—all without having to leave the house.

As Adam Furman, a buyer at a prominent Minneapolis jewelry store explained, when they faced lockdown earlier this year, they didn’t panic. Instead, they implemented these type of messaging and payment tools to help keep their employees and the customers happy and healthy. Not only did it work, but his store has seen two times more monthly reviews, 1,027 inbound leads since COVID began, and $1.3 million in payments all processed through text.

“Finding a service partner to connect with our customers has been great. It was our solution for getting paid when we were pseudoshutdown, and the process was so

Beyond using these types of tools, there are a number of other ways to stay open and operational during the holidays. Following are 10 actions you can take to stay proactive this holiday season:

RJO European Branding Opportunity Trips SINCE THE LATE 1980S RJO has been hosting fall trips to Europe in order to distinguish our members as Direct Diamond Importers. Members not only benefit from their store’s distinction in their community, but also build upon lifelong friendships.

To keep up-to-date on next year’s trip, stay in touch with RJO trip coordinator Connie Matsen at: cmatsen@rjomembers.com

• Ensure you’re able to chat with your website visitors.

• Set up Google Click to Message to interact with your GMB visitors.

• Maintain a connection with your high-value customers.

• Promote gift cards.

• Shift your marketing to target your local area.

• Set aside specific shopping times for those who need it, like the elderly and the at-risk.

• Send images of products as a way for people to shop virtually.

• Maintain a connection by sharing promotions and sales via text.

• Update your customers.

Frequently.

• Beef up your internal operations with team trainings, brainstorms, and virtual meetings.

Retail is not coming to a halt. Not even close. With the right tools and mindset, you can keep your business thriving this holiday season—under any circumstances.

Watch the Demo to learn how Podium can help your store stay open despite potential pandemicrelated restrictions.

RJO Next Gen Experience THE NEXT GEN EXPERIENCE will be held in Oak Brook, IL, this May 15 – 17, 2021.

The Experience features an up-to-date curriculum, and attendees work with other stores preparing for the future, through receptions, group dinners, roundtables, and curriculum sessions focusing on personal and business development. To learn more about the experience or to receive a registration form, please contact Sabrina Smead at: sabrina@rjomembers.com

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Jeweler Profile

Greg Lynn Jewelers: Fine Jewelry Design in Florida A QUICK TRIP to Greg Lynn Jewelers’ website, and you’ll feel the importance of Florida’s coastal life to the business and the man behind it. Bathed in aqua, the site opens to a photo of waves washing ashore a beach on the Atlantic Ocean. The story of Greg Lynn’s life doesn’t stray too far from the ocean at any point.

“I started on my jewelry path in North Carolina as a part-timer at a jewelry store one December,” says Lynn. “I started an apprenticeship soon after with the jeweler there, and I eventually moved to Hawaii, where I started my family, as well as my career as a jewelry designer. After working as a jewelry designer for 26 years, transitioning into a retail store in 2004 went fairly smoothly. Coming up from the bench side, it’s been helpful to have had hands-on experience with everything from sketching, carving the wax, and producing the finished pieces when working with customers.”

Greg Lynn Jewelers specializes in all aspects of custom design, as well as redesigning gemstone and diamond jewelry. Jewelry repairs are done onpremise, and the store promotes 40 years of combined experience, among their “qualified craftsmen, who will bring your treasured items back to life and refurbish them to like-new condition.”

As with all Floridians, COVID-19 has been a significant story for Lynn.

“The pandemic caused us to shut down—per state mandate—for a little over five weeks, from early April through the first week in May,” says Lynn. “We reopened three days before Mother’s Day and had an absolutely amazing response. More than once we heard how we had saved our customers because nothing else was open or available for gifts.”

“We initially had a two-customer limit for a few weeks,” he continues, which wasn’t super noticeable, due to traffic being slower. We use Clorox wipes and hand sanitizer—like everyone else—and our customers do a great job at social distancing. Due to travel restrictions and a lack of cruises and international holidays, our summer numbers have been consistently up every month, due to more discretionary income available for presents for

birthdays and anniversaries. We’re going into this holiday season strong and have high hopes for a strong New Year’s and Valentine’s.”

Lynn is increasing his use of social media, posting a regular feature on the store’s Facebook page.

“The customer response to the ‘Piece of the Week’ has been good so far,” says Lynn, “but we’ve just recently started, so I think as we consistently post, it will gain traction and a better following. We have sold half of the pieces featured since starting that post category, so I’d say it’s working well so far!”

“Social media has been something we are starting to use more actively recently,” he continues. “We are hoping that it will help us grow our brand as a whole and bring in new customers. Facebook and Instagram are such great tools to allow us to interact directly with customers and help them to build trust and comfort with us before ever having to step foot in our store. The more we post and the more consistent we are with it, the more interaction we’ve seen.”

Greg Lynn Jewelers is relatively new to RJO, becoming a member in 2018. RJO members will see the organization’s subtle influence on his website, where he notes that he travels to Antwerp regularly.

“We’ve gone to every show so far and are loving being part of RJO,” says Lynn. “The relationships we’ve established with other independent retailers is something that’s been super beneficial, and we look forward to catching up with them at the Shows.

We’ve made those types of relationships with both vendors and other retailers, which have been immensely helpful. I love the Show’s breakout sessions and groups with Kate Peterson, and the roundtables with other retailers have given us so many good ideas and has influenced changes to our store management and goods sold.”

Greg Lynn Jewelers is located at 101 Flagler Plaza Drive in Palm Coast, FL Phone: (386) 439-3777 Website: www.greglynnjewelers.com

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Jewelers Mutual Group

Protect Your Jewelry Business from Cybercrime AS WE HAVE SEEN DURING THE COVID-19 PANDEMIC, many small businesses are turning toward e-commerce as an additional way to reach their customer base and make sales. These digital e-commerce platforms provide convenience for the consumer as well as efficient and seamless payment processes. As e-commerce technology continues to evolve and become more sophisticated, criminals are developing tactics to target your assets without ever stepping foot inside your business.

Common Types of Cybercrime • Identity theft using phishing techniques via email, text or phone call.

• Setting up fake accounts that mimic those of a company’s suppliers, and then asking for payment to that account.

• Taking over a store’s mailing system to obtain private information from its customers.

Be aware of your vulnerabilities and implement steps to strengthen your security. Even if you do not sell inventory online, any computer connected to the internet can become a target, a source of attempted crime. This is even more relevant if you have a broadband connection using either a cable or DSL connection that is always on.

Security Tips for Taking Payment Cards Payment card processing can be overwhelming and expensive and is sometimes seen as a necessary evil for small businesses. When making sales by payment card transaction, there are a few considerations to

keep in mind. The first is the type of payment card being used—a chipped Europay, Mastercard and Visa (EMV) or non-chipped (magnetic stripe) card. Chipped cards are much harder for criminals to duplicate, making the unchipped version more of a target. This means there is a higher risk when conducting sales with unchipped cards.

It is a good idea to create a committed practice around payment card acceptance that is written into your store policy. Here are a few best practices that could be written into your policy: • Follow the rules set out in the merchant account agreement for accepting payment by way of payment cards. If you don’t, and a sale is determined to be fraudulent, there is a slim chance of recovering the loss, even if you have insurance that covers this type of loss.

• Match the signature to the name on the payment card. Take the extra time to read it closely, don’t just check to see if there is a signature.

• Check the payment card for a signature on the back. If it doesn’t have one, get the client to produce another form of ID with their name and signature on it, then have them sign the payment card so you can compare. Check the other ID to make sure the name matches the signature on the payment card as well.

• Verify that the signatures compare if you have after-sales programs, such as free cleaning and servicing for a year, that involve a client signature to sign up.

• Accepting payment cards over the phone. Require the following pieces of information for every card payment you take over the phone: • Complete card number • Expiration date • Security code/CVV code • Billing ZIP code (match the billing and shipping ZIP codes while on the phone, if they are different, ask the customer why they don’t match) On the signature line of the receipt, write “phone order,” and file the paper receipt. When shipping the order, purchase tracking for the shipment so you have a paper trail.

This will make it more difficult for a customer to claim their goods were not received or it was fraudulent.

Know your customer. Good sales practice is to have a rapport with a client and obtain their name and remember it. This happens at the front end of a potential sale, before a payment card is presented.

When/if a payment card is presented, verify the name they provided matches the name on the payment card.

For added security, you can also protect your business with a cyber liability insurance policy. This covers the loss of money incurred due to financial fraud, as well as liability claims where there is a duty to defend lawsuits or regulatory penalties are incurred.

Work with a Jewelers Mutual agent to help you find the right insurance coverage to fit your needs.

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COVER STORY

PPP Loans

An Important Option for Many RJO Jewelers In the Loupe surveyed RJO members who took out a PPP loan to learn about their experiences. Edited responses are shared here. Additionally, best-guess answers to questions regarding the program, loan forgiveness, and tax implications of a PPP loan are provided.

In general, local banks were the ones who helped the most, with one jeweler calling her local banker "a rockstar!" The loans themselves were considered important by most members, with several calling the loans crucial. The funds from the loans were used almost exclusively to pay staff, but some of the funds were also used to pay for utilities and COVID-19 protection supplies. Banks also served as the main source of PPP information for those surveyed.

Most of those surveyed said they had heard from their bank that their loan had been forgiven.

They were less sure about the tax implications, with several noting they didn't have a clue, while most were relying on the wisdom of their accountant.

What is a PPP Loan?

According to the current Small Business Administration (SBA) website, Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

• PPP loans have an interest rate of 1%.

• Loans issued prior to June 5 have a maturity of two years. Loans issued after June 5 have a maturity of five years.

• Loan payments will be deferred for borrowers who apply for loan forgiveness until the SBA remits the borrower's loan forgiveness amount to the lender.

If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).

• No collateral or personal guarantees are required.

• Neither the government nor lenders will charge small businesses any fees.

Gail Tarson

Diamonds Evermore, Clovis, NM The PPP loan was very specific as to what receipts were eligible. In my case I was only eligible to cover payroll for my one employee for 2-1/2 months of her payroll, less the withholdings. I got my information from the Local Small Business Development team through our Community College and the bank which serviced my PPP loan; the bank regularly handles SBA loans. The extra money was helpful, but the low eligible amount didn't make or break me.

I have been notified of the loan's forgiveness, which came approximately two weeks ago. I neither had, nor have, an understanding of the tax implications.

Bob Disinger

Disinger Jewelers, Jasper, IN To determine the amount of the loan request, I followed the application guidelines and worked with my accountant. I applied at our local bank and was approved in one week. The loan was very important, as my employees never missed a paycheck. Even

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when the store was closed, I paid their commissions and bonuses.

I've already received notice all of the loan is forgiven. It took one week after I filled out the forgiveness application. I understand the PPP loan will be taxable income. My information mostly came from my local bank and local accountant. The government kept changing the rules, but in the end the changes were to our advantage.

Will My PPP Loan Be Forgiven?

The general impression among small business owners is "Yes." The details of how and when to apply for forgiveness do not seem clear to everyone, and there does not appear to be one online source to definitively answer this question.

Recently, on Facebook’s RJO Exclusive page, these two messages were posted back-to-back:

Ronnie Godwin

Godwin Jewelers, Bainbridge, GA The amount of our PPP loan was based on a payroll formula, and our source of information and our eventual lender was our local bank. The loan was very important to our store, as we were closed for four weeks, and I was determined to take care of my staff.

I've already received notice the loan is 100% forgiven, and I understand the loan will not be included in taxable income, thus there is no tax liability.

Glenda Hurt

Goldsmith Gallery, Red Oak, IA We were approved through our local bank, and to determine the loan amount, we followed a worksheet provided by our banker, which basically was a formula using our payroll, utilities, and building rent. I used QuickBooks to gather all that information. Since I am the bookkeeper for our store, it was fairly fast and easy to accomplish.

Our main source of information on the PPP loan was jeweler consultant David Geller—via email—and our local bank president. He personally came and talked to us about this, and he called as well. He directed us on any issues or confusion on the wording of the application. He also explained the process of applying, the forgiveness forms, and the bank paperwork as well. This was very helpful, as we have not had to apply for loans for many years.

Getting the PPP loan was fairly important toward us paying our staff during the state's mandatory closure period. It allowed us to have money to pay employees so they would not have to draw unemployment, which in turn would change our tax contribution rates. We own all our jewelry, land, building, and equipment, so all of the loan money went toward payroll and utilities.

Our bank sent our loan forgiveness papers a month before they were due (our banker wanted to make sure that all our paperwork was in order in good time). I filled out the forms and provided our QuickBooks reports to confirm all the money was spent on the appropriate accounts. We received the loan forgiveness papers in good time; I believe we got

Unbelievable. Ten days ago I applied for the PPP Forgiveness and got notified today, it was forgiven.

It happened so quick that even my banker had to double check and triple check.

•

I asked my banker today, and he said the forgiveness still isn’t official. Like COVID-19 the information for this is all over the board. Crazy.

For those interested, here is the latest FAQ about PPP Loan Forgiveness from the Small Business Administration.

How Will a Forgiven PPP Loan Affect My Tax Deduction of Expenses?

Businesses whose PPP loans are forgiven cannot deduct business expenses paid for by the loan. A taxpayer that received a covered PPP loan and paid or incurred certain otherwise deductible expenses may not deduct those expenses in the tax year in which the expenses were paid or incurred if, at the end of the tax year, the taxpayer reasonably expects to receive forgiveness of the covered loan on the basis of the expenses it paid or accrued during the covered period. There are some safe harbor exceptions, but the language does seem more appropriate for an accountant, and it's possible some of these rules have changes since this issue of In the Loupe was published.

Here are some of the latest IRS-related articles on the topic: • IRS issues additional PPP deductibility guidance with safe harbor (November 21, 2020) • IRS doubles down on nondeductibility of PPP-funded expenses (November 19, 2020)

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the paperwork in early- to mid-August. I am of the understanding that there are no tax implications regarding the PPP loan forgiveness.

Kim Lizzi

Kim’s Fine Jewelry, Summerville, SC My accountant helped me figure out the amount to ask for, with a formula of how much salary, rent, and the electric bill totaled. We were closed for a whole month, so the PPP loan was crucial for me to get. My main source of information was my accountant, and my banker helped me a lot. Wells Fargo was my bank at the time, and they could not get me the PPP loan.

I had to go to a small bank in my town, and they helped me with the paperwork, and they now have my banking business.

My PPP loan was mostly forgiven. I got a notice that $6,000 is to be paid back, with a small interest fee.

I do not know what the tax implications are going to be; I need to ask my accountant.

Scott and Chris Lewis Lewis Jewelers, Clinton, UT

The amount of our loan was based on payroll information in our accounting software and the federal and state forms that were filed. We applied through our local bank, which also was our main source of information about the loan and the program. We'd say getting the loan approved was somewhat important to us.

The loan has already been forgiven. We have no idea what the tax implications are, but we assume we'll receive a 1099 of some sort and have to claim it as revenue.

Why Some Passed on a PPP Loan Edited posts from Facebook’s RJO Exclusive page, April 2020

I don’t feel the need to bring in a full staff on full pay until I see how the traffic and store set-up will be.

My employees are doing pretty good on unemployment, with the extra $600 from the feds.

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I’m opening slow so my employees can stay on unemployment, because they are doing okay.

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I'm taking the very conservative route; I don't know what this recovery is going to look like. The last thing I want to do is bring them back and have to lay them off again.

Jill Makepeace

Makepeace Jewelers, Watertown, SD We used a formula to figure out the amount of the loan. It was determined by number of employees, if I remember correctly. We applied for the loan through our local bank—First Premier—which served as our main source of information. Our banker was a rockstar! First Premier had a bullet sheet to go through to help us at a very overwhelming time in our careers. Our banker helped us go over everything.

Some of our small business friends had issues at other banks in our town, and some of the banks were confused. We were so grateful for our bank, they worked long hours to figure out the moving target of the PPP loans. They were a lifesaver, guiding us through a very difficult time!

The PPP loan meant we could send our at-risk employees home and still pay them. It relieved the tremendous amount of stress we were feeling!

Our accountant has been filing the paperwork, and it looks like our loan will be forgiven. We will possibly have the final answer this week. We are leaving the tax questions to our accountant.

Steven Swan

Swan Jewelers Diamonds & Gold, Lake City, MN I have one full time employee, so I took the statemandated shutdown number of weeks and multiplied her regular pay by that many weeks, plus added in for taxes and retirement. That's how I came up with my loan request amount.

I started by contacting my bank. They did not offer the PPP loan and neither did our other local bank.

I went to the next town and was told by several banks they were only completing applications from existing customers. So I applied at another bank where I had a personal account and opened a business account to apply. In the meantime, it was suggested to me to try Lendio online [a lending partnership for small businesses] and they approved my PPP loan.

The loan provided full-time wages to my one employee, so she did not have to get unemployment.

It also helped pay for masks and cleaning supplies and disinfection supplies.

I'm not sure when I'll be notified when it’s forgiven; I think in a couple months, but I didn't actually look it up. I also would expect to pay 38-40% in taxes, but I am hoping for other breaks.

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MILESTONES William “Lecil” Henderson, owner of Henderson Collection by Lecil in Charlotte, NC, passed away on November 22. He was 63.

Frank Kumor, owner of Erwin's Jewelers in Bellevue, NE, died this past December 4. He was 71.

Susan Robinette, of Robinette Jewelers in Seneca Falls, NY, passed away on November 3. She was 64.

Our thoughts go out to the families.

CALENDAR DECEMBER

JANUARY

21 All invoices must be received in the RJO office to count towards your patronage dividend 24-25 Christmas—RJO office closed 31 New Year's Eve

1 New Year’s Day—RJO office closed 11 All payments must be received in the RJO office

FEBRUARY 10 All payments must be received in the RJO office 15 President's Day

18 Martin Luther King Jr. Day

14 Valentine's Day

22 All invoices must be received in the RJO office

23 All invoices must be received in the RJO office

NEW MEMBERS Annapolis Jewelers

Finch Jewelers Jessica Rebman Lancaster, PA

(Second Location)

James Burick Annapolis, MD

Referred by Mike Malazita, Allison Kaufman, Van Nuys, CA

Atchison’s Jewelry Meleta & Gary Atchison Levelland, TX

Furnari Jewelers

Referred by Rihner’s Jewelers, Gretna, LA; and Denise Scalco, Ostbye, Minneapolis, MN

Disinger’s Jewelry (New Owner)

Teresa Heeke Jasper, IN

Runyan’s Jewelers Debbie Runyan Parker Camas, WA

(Third Location)

Joe Furnari Chicopee, MA Furnari Jewelers

(Fourth Location)

Joe Furnari Holyoke, MA

Referred by Doug Tremble, Allison Kaufman, Van Nuys, CA

Seever’s Jewelers Jeffery & Lacey Seever Evanston, WY Referred by Rick Sathers, Sathers Jewelry, Evanston, WY

Tidewater Gold & Diamond Rand Gold & Ryan Mitchell Chesapeake, VA Walton’s Jewelry Michael & Julie Walton Franklin, TN

Thank you to the jewelers referring new members to our group. These jewelers will receive a $1,000 finder’s fee for their referral, payable after a new member has been in good standing for at least six months.

FAMILY. DIVIDEND. SUPPORT. BUYING POWER.