US jewellery wholesaler Unique Designs has filed a lawsuit against Signet Jewelers in a dispute over customer refunds.
The New Jersey-based supplier, which claims to be the largest fine jewellery wholesaler in the US, began doing business with Signet in 2007 or 2008, according to the complaint filed on 6 November in the US District Court for the Northern District of Ohio.
Under the terms of the agreement, Unique Designs would create and submit jewellery designs to Signet for approval. Some of these designs were later manufactured by an overseas third party supplier, an arrangement that Unique Designs terminated. Many of the items that Signet agreed to purchase were to feature artificial gemstones, according to the lawsuit.
In 2020, Signet raised concerns with Unique Designs that certain items were failing laboratory tests. Unique Designs alleged that a limited sample of artificial stones were actually made of glass rather than nanocrystals, contrary to the advertised description of the jewellery. Signet decided to recall all items with such stones and refunded customers, offering $100 gift cards for future purchases.
Unique Designs challenged this unilateral decision, arguing that Signet’s contract required it to either reject and return the items or pay for the items sold. The supplier suggested that a cost-effective solution would have been to replace the affected items with nanocrystal gems free of charge, at an estimated cost of approximately $200,000. However, Signet’s refunds and gift cards amounted to approximately $1.6 million.
Although Signet already owed Unique Designs more than $2.2 million, the retailer offset this amount by $1.6 million, leaving an outstanding balance of nearly $600,000. Unique Designs is suing Signet for multiple breaches of contract, unjust enrichment, conversion of personal property and fraud, seeking payment of nearly $2.3 million.
