‘But He Who Steals My Good Name Steals All’

This month’s cover story (p. 62) addresses a topic central to running a successful retail jewelry business—ethics. Webster defines ethics as “the study of standards of conduct and moral judgment and the system of morals of a particular person, religion, or group.” Ethical behavior has a huge impact on everyone in the business, whether retail or wholesale. At industry gatherings, the question of ethical behavior and its consequences is discussed. Ethical behavior is important in the jewelry world because we sell high-value products based on trust.

This topic is especially relevant because of the increasing assaults on values in general. Enron, Adelphia, and Tyco are prime examples. In the entertainment community, high-profile rock stars are accused of child molestation and radio shock jocks are taken to task for their on-air behavior.

The consumer media play a significant role in this climate of declining ethics. The scandal at the New York Times—in which a writer made up stories and management took no action until it was too late—is a case in point. The political world has always been an arena in which power and money provide powerful motivators for misbehavior. Meanwhile, Seventh Avenue and its fashion gurus design clothing for our wives and daughters that’s more appropriate for the ladies of Tenth Avenue.

The world of jewelry celebrates traditional values. Engagements, weddings, and anniversaries are commemorated with jewelry. But the average consumer knows little about jewelry. What differentiates identically graded diamonds that appear different to the human eye requires the expertise of a trained, knowledgeable jeweler—and that’s why ethics continues to be such an important topic in this business. A lapse in ethical behavior—real or perceived—can result in a jeweler’s making the evening news as he is hauled off in a paddy wagon, as happened in Philadelphia not that long ago.

A jeweler’s added value lies in his or her ability to provide trust in the transaction. Without trust, a jewelry sale won’t be made. What gives a consumer that sense of trust? Initially, it is the image a merchant has in his or her market. A jeweler’s image comes from his reputation, which is spread by word of mouth. What people say about a merchant for good or ill makes all the difference to that store’s image and its success. Advertising and promotion, community involvement, the look of the store, merchandise presentation, and the sales staff are important, but it is that reputation in the community that overcomes the consumer’s fear and resistance.

At the last GIA Symposium, Rushworth Kidder told the story of the Chernobyl disaster. It was no accident; it was the consequence of a lack of ethical behavior on the part of people running that nuclear facility—and the consequences were catastrophic. While a jeweler’s ethical failures may not result in death and destruction, they will lead to the demise of the business … and that’s why ethical behavior is so important.

fdallahan@reedbusiness.com