If you’re dismissing the Y2K bug as a paranoid exaggeration or somebody else’s problem, you’re taking a big risk. The truth is that the bug could make your life miserable in myriad ways. It could disrupt your inventory records, payroll data, invoicing, databases, vaults and safes, and accounting software. Accounts could be miscalculated or wrongly denoted as past due. Your security alarms, fire and entry systems, phones, e-mail, fax and answering machines, pagers, credit cards, cash registers, time clocks, postage meters, and building systems might malfunction or not even work. And according to Jewelers Mutual Insurance Co., all these disruptions could last for hours, days, or even weeks.

Bugged. By now you’re likely familiar with the basics of Y2K, also called the “millennium bug” or “Y2000.” Computer systems and software more than three years old are programmed to read only the last two digits of a year, not all four as recent models do. That means at midnight Jan. 1, 2000, millions of computer systems—unless reprogrammed or replaced—will assume “00” means 1900 and will malfunction or crash. (The exceptions are Apple/Macintosh computers, which are date-coded through 2040.)

Some Y2K problems, however, could begin as early as July 1, when 46 states start fiscal year 2000. Other dates to watch are Aug. 21 (older computers had a 1,024-week internal calendar that resets them to “0000”), Sept. 9 (9/9/99 means “end of file” in some older computers), and Oct. 1, start of fiscal year 2000 for the federal government (which says all of its critical systems will be Y2K-compliant before Jan. 1).

Some retailers already have problems. A Minnesota jeweler saw his accounting software crash in January when it recognized “1999” as the end of a file. He had to scramble to transfer his general ledger data to new software. Elsewhere, some retailers’ computerized cash registers crashed last summer when they refused to accept credit cards with expiration dates of “00” (for 2000).

Ready—or not? Are jewelers prepared for Y2K? The big guys are. Zale Corp., the largest U.S. jeweler, started preparing in 1997 and has spent almost $7 million in upgrades, replacements, and tests of all systems and programs. It will finish preparations by July. Reed Jewelers, a Southeast jewelry chain, finished all year 2000 tests last February. Jewelers Mutual converted to year 2000 compliance in 1997.

Smaller independent jewelers may not be quite so prepared. A recent JCK survey turned up these disturbing findings:

• More than half the respondents use store-management software five or more years old, which is especially vulnerable.

• Most jewelers don’t know if their suppliers and service providers (such as credit card companies, utilities, or banks) are Y2K-compliant and have no contingency plans to handle possible Y2K disruptions.

Year-2000-ready hardware and software can still malfunction if linked to other networks that are not. Furthermore, the Y2K problem isn’t limited to business computers. Any device whose timing or datekeeping is controlled by a computer chip could be affected. Today that means almost anything. As the Y2K Guide of the Federal Emergency Management Administration (FEMA) notes, “Y2K is about fax machines, telephones, loading dock doors, security systems, heating systems, and automatic doors.” Most insurance companies, including Jewelers Mutual, are telling clients they won’t cover Y2K losses caused by appliances.

For all the dire scenarios, there’s some good news. Preventing disruptions isn’t that complicated, and you still have time on your side. Here’s a step-by-step plan to make sure you’re bug-free at the calendar’s big turn.

1. Get ready now. “A lot of jewelers think they have until December to make this work, and they don’t,” says Barry Kraft, executive vice president of Applications Systems Corp., a supplier of computer systems and software to the jewelry trade. “Their computer systems should be ready by October 1999 for the holiday selling season.”
   You need sufficient time to examine your computer systems, retool them if necessary, and then test your software and interactions with other systems. For larger jewelers, that may take about three months; for small retailers, about a month. You may have to take your system down more than once. Experts say any date-based software and applications—such as payroll, accounting, spreadsheets, word processors, or databases—must be carefully screened. “Test every single type of transaction you run in your business,” says Kraft.
   Correcting the Y2K problem takes time because it isn’t merely a matter of changing a couple of digits. There are 100 ways of expressing dates in computer chip codes, 15 just for leap years. Each system and application must be checked carefully to ensure all codes are changed.

2. Take inventory. Make a list of all business equipment and software at work and in your home office that could be affected, advises Jewelers Mutual. This includes every computerized system you’ve purchased or personally created and all equipment and appliances that are date-related.

3. Test it yourself first. To see if your computer is year-2000-ready, set the time at 11:59 p.m., Dec. 31, 1999, suggests Jerry Riendeau, president of D.A.T.A. Inc., Lombard, Ill., a software supplier to small jewelers. “Turn off the computer for five minutes and then turn it on again,” he says. “If it says Jan. 1, 1900, or any date other than 2000, your hardware must be updated or replaced. If it reads Jan. 1, 2000, that computer is fine.”
   Remember, too, that 2000 is a leap year. “Your computer could still have problems with leap-year advancement,” says Riendeau. “So try the same test by setting your computer to Feb. 28, 2000, at 11:59 p.m., turn it off, and then see what date it has when you turn it back on.” Do the same for Feb. 29, 2000.
   Even if your hardware is okay, you can still have problems if, like many jewelers, you have used the same software for five or more years without significant updates or changes. Test every program you have on your computer system, advises Thom Underwood, president of Quantum Leap Software Solutions, which produces software for the jewelry trade. “Change the date to the beginning of next year, run some reports, and see the results.”
   Do this even with software for Apple/Macintosh computers. Though the machines are Y2K-compliant, “you still need to check the compliance status of the programs you use on Apple, such as Microsoft Word, Access, Excel, and other popular applications,” notes Rich Goldstein, editor of iJeweler, an online newsletter for jewelers.

4. Call your hardware and software suppliers. Are your computer equipment and software suppliers Y2K-ready? Ask them. Call the toll-free 800 number that comes with the product. Some jewelers now wisely ask hardware and software vendors to provide written confirmation that they’re Y2K-ready. This can be useful legally if the systems or software do fail. The Red Cross also recommends contacting manufacturers of your essential computer-controlled electronic devices, such as fire and security alarm systems, programmable thermostats, appliances, door openers, and electronic locks.
   Longtime jewelry industry computer system suppliers—such as D.A.T.A. Inc., Applications Systems Corp., and ARMS of Las Vegas, Nev.—have been Y2K-compliant for a while and provide upgrades to clients. Many software publishers offer upgrades for current versions.
   Others haven’t or can’t. “There have been big changes in jewelry software and hardware vendors in recent years,” notes Underwood. Their numbers shrunk in the past decade. Some are out of business. Others left the industry, no longer carry jewelry trade software, or simply won’t update for Y2K. “A lot of people are using Y2K as an opportunity to drop products that haven’t sold well, both hardware and software,” an industry insider tells JCK.

5. Upgrade it yourself. If a vendor can’t or won’t help, you have several options. One is to handle the matter yourself, especially if you’re a small jeweler with only a couple of computers. You can purchase Y2K repair software for $30 to $50 or get it online (see “Jewelers’ Y2K Resources”).
   Another option is to hire a consultant or programmer—though there may be a long line of other “last-minuters” ahead of you. Check the phone book or ask business colleagues, your accountant, or your local computer- or office-supply store.
   Or you could simply buy a new computer. If your system is more than three years old or if the company that made it won’t help, get rid of it and transfer your data to a new one. “Today, you can get a good operating system for as little as $700 that is three times faster than the one you bought for $2,500 a few years ago,” notes Riendeau. Be sure your old software is compatible with the new system.

6. Go online. Many computer makers, software publishers, and computer industry groups have Web sites that indicate whether their products are Y2K-compliant. These sites often provide tests and upgrades that can be downloaded directly into your computer (see page 148). This is especially useful for the small jeweler. “Most Y2K fixes for small businesses aren’t very complicated, and do-it-yourself ones are usually free,” notes Goldstein of iJeweler.

7. Back up important files. Copy your crucial files onto a ZIP drive or separate hard drive before doing Y2K diagnostic tests. Most computer experts suggest doing this anyway, so you can retrieve vital information in 2000 if something happens. Be sure back-up hardware and software are Y2K-compliant, too. You may want to print out important records—such as inventory or accounts receivable—in case back-up disks are contaminated by Y2K, damaged, or lost, says Jewelers Mutual.

8. Have a financial safety net. Though banks and financial services are well-prepared for 2000, the Federal Trade Commission recommends these precautions:
   • Get statements now from creditors detailing your payments toward principal, interest, and other charges. Ask your banks and brokerages for special statements with your investment values by Dec. 31.
   • Keep a paper trail of receipts, canceled checks, agreements, banking records, utility bills, lease payments, credit card receipts (especially with “00” as the expiration date), and other important documents or transactions for six months before and after Jan. 1, 2000. This will be useful if your suppliers, customers, banks, or accountant lose financial records.
   • If you bank by computer, download your transaction records and store them on a back-up disk. Print out downloaded records in case back-up disks are contaminated with Y2K problems.
   • Send payments for inventory, mortgages, loans, leases, and similar obligations by certified mail (return receipt requested) for several months before and after the year changes.

9. Talk to your vendors. Are your suppliers Y2K-ready? Even if you’re not connected electronically to suppliers, a bug in their systems can disrupt your business. For example, manufacturers’ engraving machines and design systems are often computer-driven. Retail customer lists and delivery schedules are computerized. What happens to your orders if these systems are disrupted or shut down by Y2K? The possibility of business disruptions is so serious, says the National Retail Federation (NRF), that many retailers now add provisions to contracts with vendors stipulating penalties if goods aren’t delivered because of Y2K problems.
   Ask suppliers for written documentation of their Y2K status. A number of jewelers, large and small, already do. Zale Corp., for example, last year wrote 3,000 vendors requesting “compliance certification.” Contact all inventory suppliers; computer and software suppliers; security companies (including safe, vault, and alarm); showcase, display and packaging suppliers; delivery services; advertising firms; and mall management.
   If suppliers refuse to answer or give vague assurances, “consider lining up other vendors to take their place,” says Goldstein. “Remember, once 2000 arrives, you’ll need to have a workable supply and distribution system.”

10. Check your service providers. Are the companies and agencies you rely on Y2K-ready? You may be surprised. A recent survey of small towns in New York state found that most local authorities don’t know if their equipment is year-2000-compliant or what they’ll do if Y2K failures affect their municipalities. Most rural utilities aren’t ready, either. “I don’t expect disaster for small jewelers inside their stores, but outside is a bigger question because of the interdependency of technology today on electronic power grids,” says Underwood of Quantum Leap. “I think there will be some difficulties.”
    “Request letters from your landlord and major service providers saying they are ready for the year 2000 or that they are working on it,” says ASC’s Kraft. Ask your insurance agent about Y2K exclusions in your policies and your Internet service provider about e-mail service and online services.

11. Develop a contingency plan. Do you know what you’ll do if your business, vendors, or service providers are affected by Y2K failures? Each of Zale Corp.’s divisions has contingency plans on how to restore activities in case of Year 2000 failures. “If Zale is spending millions to prepare, average jewelers should be concerned, too,” says Riendeau. Here are suggestions for a Y2K contingency plan:
    • Lock up as much inventory in your vault before Dec. 31 (a Friday) as possible. You may want to close for the weekend.
    • Get a month’s worth of extra office supplies well before Dec. 31.
    • Be sure your staff knows what to do in case of internal or external Y2K failures.
    • Have plenty of flashlights and extra batteries for power outages.
    • Use a battery-operated radio or television for information.
    • Keep extra cash on hand.
    • Keep your car’s gas tank above half full.
    • Examine your smoke alarms. If hard-wired into your electrical system (most newer ones are), see if they have battery back-ups. Replace the batteries in all smoke alarms this fall.
    If you’re a Jewelers Mutual customer, you will receive 24-hour phone access on Jan. 1 for Y2K questions.

12. Stay informed. Keep up with stories and advice in print, TV, and online about Y2K’s possible effects and how to prepare. The more you know, the better prepared you’ll be.

A Jeweler’s Y2K Checklist

Here is a list of systems, compiled by Jewelers Mutual Insurance Co., that may be date-related and could be affected by the Y2K bug. Use it to take a Y2K-compliance inventory of your business.

Computer

__ Inventory software

__ Payroll software

__ Invoicing software

__ Database software, such as customer repairs

__ Mailing list software, such as customer anniversary or birthday lists

__ Accounting software

Security

__ Safe or vault system

__ Alarm system

__ Fire system

__ Security cameras

__ Door entry system

Telecommunications

__ Telephone/voice mail system

__ E-mail

__ Answering machine

__ Fax machine

__ Pagers

__ Satellite equipment

Business equipment

__ Credit card system

__ Cash register

__ Time clock

__ Postage meter

Building systems

__ Heating/air conditioning system

__ Elevators

__ Power supply

Even if your hardware is okay, you can still have problems if you have used the same software for five or more years without significant updates or changes.

One suggestion: Print out important records.

What Our Exclusive Poll Found
In January, JCK mailed a questionnaire to 450 jewelers across the United States, asking them how prepared they were for the Y2K bug. We received 298 responses, for an unusually high return rate of 71%. Here’s a summary of what we learned.
YesNo

	Y2K Awareness
Do you use a computer in your business?	87%	13%
Have you heard of the “millennium bug”?	94%	6%
Have you taken or are you taking action to protect your business computer operations from the effects of the millennium bug?	76%	24%
Do you have a contingency plan if the millennium bug disrupts any of your operations or systems?	28%	72%

 

Jewelers’ Y2K Resources

Here are Web sites, checklists, and booklets that will help you stamp out the “Y2K bug” in your business:

• Y2K news Web sites. Some good online Y2K news sources are: www.year2000.com, www.wild2k.com, and www.y2knewswire.com. For a free newsletter of important Y2K news stories of the past week, send a blank e-mail message to: nhnelist-on@mail-list.com.

• Government sources. The President’s Council on Y2K Conversion provides free information about dealing with the Y2K computer problem; www.y2k.gov or (888) USA-4-Y2K. The Small Business Administration has an easy-to-use guide and answers questions about testing hardware and software at www.sba.gov/y2k. The Federal Emergency Management Administration offers a free guide to Y2K preparedness; www.fema.gov/y2k or (800) 480-2520.

• Y2K compliance and test sites. “Vendor 2000” is a database that lists 125,000 hardware and software products and indicates whether they’re Y2K-compliant. Links to product manufacturers provide specific compliance information. The URL is: www.eds.com/general/cio_services/offerings/cio_services_offerings_vendor2000.shtml.

“CiC: The Computer Information Centre” (www.compinfo.co.uk/u2k/manufpos.htm) lists all personal computer models that are safe from the Y2K bug.

“National Software Testing Lab” offers free test programs at www.nstl.com or through Viasoft at http://onmark.viasoft.com.

“The ZDNet Website” tells you how to fix PCs and small business computing systems. It’s found at: http://www.zdnet.com/zdy2k/.

“Fixes” for specific PCs are available at www.zdnet.com/vlabs/Y2K/

testy2k.html.

“The Consumer Electronic Manufacturers Association” has a list of its members’ Y2K sites and links to them via its Web site, www.cemacity.org/govt/CEMA2000.htm.

IBM has a site with tips and answers about hardware and software tests: www.ibm.com/year.

Microsoft’s Y2K page (www.microsoft.com/y2k) details which of its programs are Y2K-compliant.

• Checklists and booklets. Jewelers Mutual Insurance offers a free brochure, “Prevent Millennium Mayhem.” Contact Jewelers Mutual at 24 Jewelers Park Dr., P.O. Box 468, Neenah, WI 54957-0468; (800) 558-6411, fax (920) 725-9401, www.jewelersmutual.com.

The American Red Cross has a Web site (www.redcross.org/disaster/safety/y2k.html) that lists what to do in case of an emergency.

The Small Business Administration’s Web site offers checklists for small businesses (www.sba.gov/y2k/indexcheck.html).

Y2Kexperts offers business consulting services. Its free survival guide is available at www.y2kexperts.com.

“Ready or Not—Surviving the Year 2000” is available from the National Retail Federation on its Web site (www.nrf.com).