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       Handling Trade-ins with The Jewelry Shopkeeper


A trade-in is where a customer buys merchandise from your store and

pays (partially or fully) with old goods or materials.


Often the trade-in merchandise is of lesser value than the value of

the merchandise being purchased and the difference has to be made

up with some other form of payment. Sometimes the trade-in

merchandise is of equal value and you agree to an even swap. Other

times the trade-in merchandise is of greater value and the customer

is to be issued cash, check, credit slip or store credit to make up

the difference. In the Jewelry Shopkeeper, any of these types of

sales transaction is handled much like a customer return or




There are three basic types of trade-in merchandise:


1)   Scrap gold. The simplest type of trade-in is if the item has

   only one type of valuable component, like a man's nugget ring,

   and is to be scrapped.


2)   Resalable items. If the item is something you will in turn

   sell as a finished piece as-is, then you will need to add the

   item to inventory and assign it a new sku number. This is very

   common for diamonds (since you can't melt them down) but may

   also be done with estate-quality jewelry.


3)   Trade-in of items you sold the customer. This is handled just

   like a returned sale except that you might adjust the trade-in

   price compared to the original selling price. Here you just enter

   the original sku with a minus one quantity.



Or you might have a combination of the above. The trade-in

might contain some gold that is to be treated as scrap and a stone

which is to be assigned a stock number as a resaleable item. In

this case, record two trade-ins.



Create A Major Class Code for Scrap Items


(Note that is a one time step. Once a scrap gold major class

code(s) is created, you won't have to repeat the step each time a

trade-in is made.)


If you accept scrap, before you begin a sales transaction you must

create a major class code called "Scrap Gold". Use the Enter/Edit

Major Class Codes feature [8-3-1] to create the "Scrap Gold" major

class code. You may want to create more than one scrap gold class

code for different types of trade-ins. For example, you might

choose class 890 for '10 karat scrap gold', 894 for '14 karat scrap

gold' and 898 for '18 karat scrap gold'. Or, to keep things simple,

you may want to create only one major class code for all scrap



Four things are important to remember for the sales transaction.

The first is how the cost and price of merchandise in the scrap

categories is calculated; by piece or by weight. In almost all

cases, even in the case of scrap gold, it's much easier to choose

to value by piece, not weight. You must also remember the dummy sku

number created for this trade-in category. For instance, in the

above example, major class code 890 will be assigned the dummy sku

number '890-00001'. In order for the sale total to come out

correctly, make sure the 'Charge Sales Tax' question is entered as

N for No.


If you pay commissions, be sure to enter the commission percentage

as zero and answer the question "Does this Override Sales Clerks'

Commissions?" with a Y for Yes. This will ensure that clerks don't

get negative commissions on trade-ins of scrap.



PLEASE NOTE!!-------------------

Make sure the question "Option to add inventory on sales screen?"

is answered with Y. This option is located in Store Information

Defaults [8-8]. This is a one-time only step and won't have to be

reset for future trade-ins.



   How to Record a Scrap Gold Trade-in


1.   Make a new sale. In most cases the Enter Cash/Charge Account

   Sale feature [1-1] should be selected. If the trade in is of

   greater value the item purchased and you want to credit the

   balance to a customer's in-house charge account, be sure that

   the customer has an open charge account and that you select

   Yes when the question Is this sale a Store Charge? is



   Continue through the sale as usual, entering the sale date,

   department and sales person's initials, until you are prompted

   for a sku number.


   On the first sku number entry line, type the sku number, final

   selling retail price and quantity of the item the customer is

   purchasing. The quantity will be entered as a positive number

   (ie. 1).


2.   On the second line, type the scrap gold dummy sku number. In

   the above example the dummy sku number would be 890-00001.

   Make sure the price is entered as the per-gram price if the

   scrap gold category is set up as 'Price by Weight' instead of

   piece. If the major class code is setup to calculate 'Price by

   Piece', the retail price is the simply amount to be credited

   the customer. Type the price as a positive number.


3.   Make sure the quantity is entered as a negative number (ie.

   -1). If a weight is prompted for, that too must be entered as

   a negative number (ie. -10.4). By typing a negative quantity

   and weight, you are adding that weight or quantity to

   inventory. At this point the number quantity and weight for

   this scrap gold dummy sku number has already been increased.


   You may want to adjust the cost (wholesale value) of the trade-in.

   To do that, while the trade-in line is highlighted - click the

   Left-Arrow-More-Options Button and choose Cost.  At the bottom

   of the screen you can enter the cost value. You could type a value

   that is lower-than, the same, or higher than the retail credit

   you're offering.


   Finally, make sure a N for non-taxable appears to the right of

   the 'Extension' column. This is because you are not giving tax

   credit for the trade-in.

4.   Check the Total Sale figure located under the department and

   sub-total. This is the net of the sale total and includes both

   the item being purchased and the trade-in. If the number is

   positive, the customer owes you money and can be tendered in

   the regular payment screen. If its zero, no money is owed by

   either party and the sale is complete. If the number is

   negative, the store owes the customer money and the negative

   number is the refund amount. In this instance, you will have

   the option of issuing a credit slip, company check, paying

   with cash or crediting the customer's in-house charge account.



5.   Later when you disperse the materials you can manually adjust the

   quantity and/or cost of the trade-in sku.


   How to Accept a Resaleable Item as a Trade-in


1.   To accept a resaleable item trade-in, start by following Step

   1 of the "How to Record a Scrap Gold Trade-in" section above.


2.   On the second sku number line, in the first part of the sku

   number entry field, type the major class code of the

   resaleable item.


   In the second part of the sku number type '99999' (five

   nines). The question, "That item was not found. Do you want

   to add it now?" will appear. Answer Yes.


   Next you will be prompted for the Location or Case Code. Once

   the location is entered, the Jewelry Shopkeeper will create a

   new sku number for the item. This sku number will be the next

   sequential counting number for that major class code. The

   number '99999' is not actually used as part of the assigned

   sku number so you can type the '99999' number every time.


   Next type the vendor code and style number. You may want to

   designate a special manufacturer code or minor class code for

   trade-ins for reporting purposed. See the discussion of "How

   Trade-ins affect Sales and Sales Tax Reports" below to see

   why. Type an item description that is to appear on the sales

   slip as well as an inventory tag.


   In the 'Cost' entry field type the value that you will credit

   the customer. If the major class code is a 'Cost by Weight'

   category, this cost is the cost per gram or carat you plan to

   credit the customer.


   The 'Retail' entry field is the retail price you plan to sell

   the item for after the trade-in is complete.


   Type both the Quantity in Stock and Weight in Stock as zero.

   Entering zero here is very important! (because before the

   trade-in you had zero of this item.)


   After these entries you will be returned to the sales screen.

   The new sku number and description will automatically be

   filled in on the sales screen. In the 'Price' entry field,

   change the price to be credited for the trade-in. In the

   'Quantity' and 'Weight' entry fields, be sure to type in

   negative amounts.


   If commissions are paid, be sure to press <Ctrl-Page Down> to

   remove the sales clerks commission percentage. Otherwise the

   clerk's commission report will reflect a return against their

   sales instead of a trade-in.


   Finally, make sure a N for non-taxable appears to the right of

   the 'Extension' column because you are not giving tax credit

   for the trade-in.


3.   Follow steps 3 and 4 from the "How to Record a Scrap Gold

   Trade-in" section above.



How Trade-ins Affect Sales and Sales Tax Reports:


Trade-ins will show as negative sales (or returns) on all sales

reports. If you need to see sales reports without trade-ins

reducing the report total, using the Itemized Sales Reports screen

[6-2-3] type a specific minor class code range or manufacturer

range excluding the trade-ins. For example if you entered all

trade-ins with a minor class code of 999, you could type the minor

class code range as 1 through 998. Or if a manufacturer code of

'ZZZ' is always assigned to trade-ins, then the manufacturer code

range as '   ' through 'ZZY' will exclude the ZZZ's.


Since you always make trade-ins non-taxable, they won't affect your

sales tax report. E.g. if you sell a $500 ring and accept a $50

trade-in, the sales tax report will only reflect the $500 taxable

ring and won't deduct the $50 trade-in.