The package arrived—signed, sealed, delivered—right on time. There was one hitch: It was empty. A $30,000 diamond had vanished without a trace.

Avi Jacobowitz, the New York dealer who sent the stone, notified the shipping service and collected insurance for the lost item. But he feels he could have made more money if he sold it. To this day, no one has found the stone—or its new, unlawful owner. “It was an excellent stone; it was a pity to lose it,” says Jacobowitz. “It’s a violation knowing someone stole something from you. It’s not a good feeling.”

Yet it’s a common one, industry experts say. Shipping losses are “a huge problem,” says John Kennedy of the Jewelers’ Security Alliance. “You have a situation where it’s normal for a person in the trade to have a couple of thousand-dollar losses a year.” Last year, Jewelers Mutual Insurance Co. paid off 400 claims for lost merchandise—an average of more than one per day. And just this summer in Chicago, 11 Federal Express packages containing close to $200,000 in jewelry disappeared.

Even when losses are insured, victims pay a price in lost sales, lost time, and sometimes increased premiums. In fact, the ongoing hazards have made insurers reluctant to underwrite shipping losses; some outright refuse to do so. And the insurance that is available is getting pricier. Paul Silverman of MJM Global Services Inc., an insurance brokerage in New York, notes that while the cost of jewelry insurance has come down overall, shipping coverage hasn’t.

The situation is so grave that there are now services devoted solely to handling high-value items. OneService and ParcelPro are two examples. Some jewelers are turning to registered mail or armored couriers to handle particularly valuable items or pieces headed for high-theft “hubs,” big cities such as New York and Los Angeles.

Practical precautions. Still, most people find that it’s not economically feasible to ship every item by special courier. So when you must use the existing shipping companies, take these precautions:

• Don’t include the words “jewelry,” “gem,” “gold,” “diamond,” or anything similar in your return or shipping address. In the past, some jewelers have substituted initials for their company’s name. But thieves learned this trick, and now initials are considered a red flag that something valuable is inside. Instead, use an alias, which should be changed regularly. If you do use initials, use letters that don’t imply jewelry-related words. “People catch on a ‘g,’ a ‘d,’ or a ‘j,’ ” says Scott Eschelman, president of OneService in Los Angeles.

• Use similar caution with your address. Known jewelry addresses, such as 580 Fifth Ave. or 47th Street, can attract the attention of sticky-fingered employees. So does a known jewelry ZIP code, such as 10036, which encompasses New York’s diamond district. (Some insurers won’t even underwrite packages headed there.) Other red-flag ZIP codes include 90013, 90014, and 90015 in Los Angeles and, to a lesser extent, 60659 in Chicago and 94102 and 94108 in San Francisco.
  If you’re in one of these areas, experts advise, use the addresses of friends’ offices with no connection to jewelry. JSA recommends against one common ploy, using a home address. “If your package gets nailed, then the thieves know where you live,” says Kennedy. “Plus, if the package is returned and there’s no one home, the couriers may leave it outside the door.”

• Handwrite, rather than type, air-bills. This makes it seem as though you’re not a frequent user of express services. Make sure the air-bill is firmly glued or attached to the box. If it’s just placed in the pouch, thieves can replace it and send the package elsewhere. Don’t declare the value of your items on the air-bill unless it’s required by customs. If a description is called for, make it generic, such as “supplies” or “parts.”

• Include a packing slip in your box, so if the air-bill is lost the package can still be delivered. But use the same precautions with this inside slip as you would with an outside one—never mention jewelry in any way.

• Don’t use envelopes or “paks,” and make sure no one can hear or feel what’s inside the box. George Slicho, vice president of loss prevention for Zale Corp., advises using a box-within-a-box. “That way, if the box gets punctured, no one can see inside,” he explains. (Some carriers offer reinforced boxes.) And stay away from old boxes. They’re more likely to be damaged, and their old labels can confuse machines.

• Change your routes and procedures frequently, just as you would to avoid other types of crime. “You have to constantly change your strategy on shipping,” says Kennedy. “If you keep the same one, the bad guys figure it out.” This includes varying your addresses and contact information, package carriers, and drop-off points.

• Bring your package to the shipping service drop-off office—where there are more people—instead of handing it to a delivery person or using a drop-box. If possible, rotate offices. Never discuss the contents of the package or the nature of your business with office personnel. If you’re dropping something off at Federal Express, make sure the employee affixes the “ASTRA Label,” which shows the package has entered the system. Be cautious when walking to the office; dealers sometimes get robbed en route. “Keep the Fed-Ex package well-concealed in a plain-looking bag,” Kennedy advises.

• Always ship during the week, never on weekends. If you ship on Friday, shoot for Saturday delivery. “You don’t want your package sitting in the system over the weekend,” Slicho says. Along those lines, overnight delivery is preferable to two-day. “The key to this whole thing is keeping the package moving and not having it sit around,” says Bruce Torrenti, district security manager for United Parcel Service. “There’s less of an opportunity” for it to be stolen.

• Avoid things that could draw attention to your box, such as special security tape. “We try not to make our box stand out,” Slicho says. If you don’t have a package from the shipping company, use one from a non-jewelry-related business. And while it helps to use the security special packaging provided by the shipping companies, make sure the special packages don’t look different from the standard ones. Also, avoid tying your package with rope. It may get snagged on the machines, which calls attention to the box.

• Keep meticulous notes about what you ship, its value, and what shipper you used. If nothing else, this will help you if you need to collect insurance.

• Take an active role in the tracking process. Most companies have software or Web sites that follow the package as it passes through the different “hubs.” Marvin Finker of Trillion Diamonds tracks shipments first thing every morning. “We see if it’s following the normal flow,” he says. “If not, we get on the phone and try to find out where it is.” (See “What to Do If You Suspect Something Is Lost,” p. 143.)

• Double-check the receiving address before shipping a package, and make sure someone is there to sign for it. “If [the receiver] is not there and they have to make a second attempt, there’s more of a risk,” Eschelman says.

• When a package is delivered, don’t let the delivery person leave until you inspect it, especially if you suspect it’s been tampered with. “If something’s wrong, you can let him know right away,” Eschelman says. One caution: Don’t open the package in his presence.

• Some favor the U.S. Postal Service’s Express Mail service over the commercial services. “Government employees are heavily checked and screened, and there’s less turnover,” notes Kennedy. Plus, there are heavier penalties for interfering with the mail. “If you rob from the Postal Service, they will take notice of it,” notes Allen Lipscher of Chicago’s Global Diamonds, who swears by the U.S. Mail. “Since the days of Jesse James, robbing the Postal Service has not been a good idea.” But Kennedy notes Express Mail has one downside: Some find it more likely to miss delivery times than the commercial services.

This article appeared in the September 1999 issue of JCK:

What to Do If You Suspect Something Is Lost

You would think the shipping services would be wracked with remorse when a package is lost. Yet many jewelers and dealers complain of perfunctory concern when they inquire after missing shipments. One shipping service, for example, pays only $100 for lost items.

So what should you do if your package hasn’t appeared at its scheduled delivery time? The key thing: Act quickly. “You have to act within an hour of your shipping time,” says Howard Herzog, president of International Jewelers Block, an insurance company in Newport Beach, Calif. “If you act immediately, the likelihood is very small that something will happen.”

When a package is missing, customer-service representatives often suggest waiting to see if it turns up. That’s fine for less-valuable shipments, but not for jewelry or gems that are possibly pilfered. “Notify [the shipping service] early and tell them to start tracing the package, and don’t take no for an answer,” says Marvin Finker of Trillion Diamonds. “When people are walking through the center looking for a package, if someone’s planning to steal it, that could change their mind.”

Don’t trust the shipping services to weed out the culprit. Call the local police and report the lost item.

Finally, if you’ve had a loss with a company, switch to another, at least for a while. “You’ve been targeted,” says Bill Herrbold, vice president of claims for Jewelers Mutual. “If you get hit once, odds are you will be hit again.”