Gold savings schemes: how they work and how jewellers can run them well

Gold savings schemes, sometimes called monthly jewellery purchase plans, are one of the most effective ways for a jeweller to build customer loyalty. Customers pay a fixed amount each month, and at the end of the scheme they buy jewellery with the accumulated amount, often with a benefit from the jeweller.

Done well, a scheme brings steady cash flow and repeat customers. Done badly, it brings missed instalments, confused customers at maturity and accounting headaches. This guide covers how schemes work and how to run them well.

How a typical scheme works

1. The customer enrols and chooses a monthly instalment amount.
2. They pay the instalment every month for a fixed number of months.
3. At maturity, they use the total amount to buy jewellery from the jeweller.
4. The jeweller adds a benefit, for example paying one instalment on the customer's behalf, or a discount on making charges.

The customer usually cannot take the money back as cash; the scheme is a way to purchase jewellery in the future.

Common scheme types

Weight accumulation schemes protect customers from rising gold prices, which makes them attractive when rates are going up. Fixed amount schemes are simpler to explain and administer.

Compliance points to check

• Duration. Most jewellery schemes run for 11 months or less. Schemes that run longer, or that promise returns, can be treated as deposits under company and deposit laws, which carry strict rules. Check your scheme's structure with your CA.
• Written terms. Give every customer written terms: instalment amount, number of months, grace period for late payments, what happens if they stop paying, the benefit at maturity, and whether the amount can be used for any jewellery.
• Receipts. Issue a receipt for every instalment, and keep a clear record of each customer's payments.
• Accounting. Instalments received are advances against future sales. How they are treated for accounting and GST should be confirmed with your accountant.

What customers expect

Customers stay in a scheme and come back to buy when:

• Terms are simple and written down.
• Every payment is acknowledged immediately, ideally with a message.
• They get a reminder before each instalment is due.
• They can check how much they have paid at any time.
• Maturity is smooth: the shop knows they are coming and the amount is ready to use.

Running schemes well: the jeweller's checklist

1. Standardise the schemes you offer. Two or three well-defined schemes are easier to explain and administer than many variations.
2. Record every instalment against the customer, with date, amount and payment mode.
3. Send reminders a few days before each due date, and follow up on missed instalments.
4. Handle late payments consistently, according to the written terms.
5. Track upcoming maturities each month, and contact customers before their scheme matures, with new designs or offers.
6. Report on schemes regularly: active customers, amounts collected, overdue instalments and upcoming maturities.

Turning maturity into a great sale

Maturity is the moment the scheme pays off for the jeweller. A customer arriving with a matured scheme is ready to buy, and often spends more than the scheme amount. Make it easy:

• Contact customers a few weeks before maturity.
• Have their scheme balance and benefit ready at billing.
• Apply the balance directly on the invoice, alongside any old gold exchange.
• Invite them to enrol in a new scheme at the same visit.

Where Code GOLD fits

Code GOLD manages savings schemes as part of your jewellery software: enrol customers, record instalments with receipts, send reminders, track overdue payments and upcoming maturities, and redeem the scheme balance directly on the sales invoice. It also handles tagging, daily rates, GST billing and karigar accounts.

To see a scheme from enrolment to redemption, book a free demo.