Shanu Singh Guliani, owner of Shanu’s Fine Jewelry, Pembroke Pines, Fla., and a blogger for JCKonline.com, was surprised when a supplier asked her to sign a consignment and security agreement.

“I had never seen this kind of form in my life,” she says. The supplier explained he needed her signature to file a Uniform Commercial Code form for goods she had received on consignment. That confused her even more. “I didn’t know what these things were,” she says.

Now she—and many other jewelers—are finding out. With the retail situation still uncertain, and UCCs a big issue in bankruptcies like Whitehall’s and Friedman’s, more vendors are filing UCC1s to secure their consignment goods and asking jewelers to sign the formal agreements required for their filing.

Jewelers shouldn’t fear these actions, says Cecilia Gardner, president and chief executive officer of Jewelers Vigilance Committee, who appeared at a forum on UCCs at The JCK Show ~ Las Vegas. “A lot of retailers think that when manufacturers file UCC1s, that it’s some sign of a lack of trust or a sign of concern regarding their creditworthiness,” Gardner says. “They shouldn’t be concerned. It’s a sign that their business partners are acting in a responsible way, and they should take comfort from that.”

UCCs are filed by manufacturers with the jeweler’s state secretary of state. They give the manufacturer a security interest in their consignment goods in the case of a bankruptcy. This has become important to manufacturers in light of recent bankruptcies where lenders laid claim to consignment goods.

More information on UCCs can be found at www.jvclegal.org and www.ucc4jewelers.com.