Why Memo Is Good for the Trade

(diamonds.net) - In our security-dominated lifestyle, where completing a simple transaction usually requires a username and password, facial recognition, or some other form of technology, it is almost refreshing to see that the memo — a practice nearly as old as the jewelry industry itself — is alive and well. The memo is a simple agreement, typically between a wholesaler and retailer. There is minimal paperwork involved; the arrangement is largely based on time and trust. In an industry as deeply rooted in tradition as the jewelry business, it’s common for people to have worked with each other’s firms and/or families for generations. It’s not unusual for extraordinary quantities of precious stones and jewelry to change hands based on a memo and a handshake. In the most basic form of this deal, the supplier leaves items with a retailer, who does not pay for them until they sell. Often a long-term, interest-free arrangement, the memo is about as sophisticated as the aforementioned handshake and just as binding.