From the large and chunky gemstone bracelets of the 1980s to minimalist, quietly luxurious necklaces of a few years ago, jewelry trends are constantly changing, and jewelry store owners are always looking for smart ways to grow their inventory without straining cash flow. One popular option? Jewelry consignment.
Bringing in merchandise on consignment allows you to offer more variety—vintage pieces, designer lines, or rare estate jewelry—without purchasing it upfront. But taking goods on consignment comes with risks, especially when it comes to insuring consigned inventory.
In this post, we’ll discuss the ins and outs of consignment and how to get the right insurance to protect your business.
What Is Consignment in the Jewelry Industry?
When you accept jewelry on consignment, you agree to display and sell items you don’t own. The consignor (designer, estate seller, or vendor) retains ownership until the piece is sold. Once sold, you retain a sales commission, and the rest goes to the consignor.
Consignment can be a powerful tool for retailers, but if you don’t have the proper protections in place—especially the right jewelers block policy—you may be exposing your business to financial and legal risk.
Benefits of Consignment for Jewelers
There are many upsides to adding consignment pieces to your stock.
1. Expand Inventory Without Upfront Investment
Consignment lets you stock your showcases with more pieces, especially high-end or one-of-a-kind items, without using your own capital. This can increase sales opportunities and foot traffic.
2. Test New Designers or Product Categories
Thinking of offering vintage engagement rings or locally handcrafted pieces? Consignment gives you flexibility to experiment with new styles and pricing strategies.
3. Offer Unique Inventory That Sets You Apart
From rare gemstones to heirloom pieces, consignment allows you to offer unique items your customers can’t find anywhere else, without the buying risk.
4. Support Local Creators
Consignment arrangements can build community connections and create a fresh buzz around your store.
The Hidden Risks: Why Insurance for Jewelry Stores Is Crucial
While consignment is a smart business move, there’s one critical question you must ask yourself: Are you insured for consigned inventory?
Many jewelers mistakenly assume their standard business insurance or property coverage includes consigned goods. Unfortunately, most do not.
Key Risks to Be Aware Of When Dealing in Consignment Jewelry
1. Theft, Fire, or Loss
If a consigned piece is lost or stolen and you’re uninsured, you could be liable for the full value, even though you don’t own it.
Solution: A specialized jewelers block insurance policy should include protection for non-owned inventory, including consigned goods, repairs, and memo pieces.
2. Legal Liability
If terms aren’t clearly defined, a consignor could dispute your handling of pricing, display, or care of the item.
Solution: Always use a written consignment agreement that clearly outlines commission, duration, pricing rights, liability, and insurance responsibilities.
3. Poor Tracking and Documentation
Without detailed inventory records, you risk losing track of ownership or underreporting a loss in the event of a claim.
Solution: Use jewelry-specific POS and inventory software that supports consignment tracking and integrates with your insurance documentation.
What to Include in a Consignment Agreement
To protect your business and comply with your insurance policy, a proper consignment agreement should include:
- Commission structure (e.g., 60/40 split)
- Consignment period (e.g., 90–120 days)
- Insurance responsibility (clearly assigned)
- Agreed-upon sale price or markdown policy
- Payment timeline after sale
- Terms for returning unsold items
This contract protects both parties and is often required when filing a claim under a jewelers insurance policy.
Don’t Forget to Update Your Insurance Coverage
If you’re adding consigned goods to your store, talk to your insurance provider immediately. You may need to:
- Increase your inventory coverage limits
- Add an endorsement for consigned inventory insurance
- Review your jeweler’s block policy to ensure it includes property you don’t own
Working with an insurer that specializes in jewelry business insurance ensures you’re covered for risks unique to your industry, including high-value inventory, shipping, repairs, and liability.
Final Thoughts: Grow Smart, Protect Smarter
Taking jewelry on consignment can elevate your offerings, increase sales, and build valuable relationships with designers and sellers. But it also brings exposure, especially when it comes to protecting jewelry inventory you don’t own.
The solution? Strong agreements, accurate recordkeeping, and comprehensive jewelers insurance that covers consignment risks.
Need help reviewing your policy or getting coverage for consigned goods?
Contact us today for a free consultation and customized quote on insurance for jewelry stores.
