Ask any seasoned jeweler how they got their first important sapphire in front of a client without tying up their cash, and the answer is almost always the same word: memo. Memo, short for memorandum, is the consignment arrangement that quietly powers a huge share of the colored-stone trade, letting designers and retailers hold loose gemstones before money changes hands. This article explains what memo actually means, how a transaction works step by step, and when a trade buyer should ask for it rather than simply purchasing outright.
What "Memo" Actually Means
A memo is a written consignment agreement. The supplier releases one or more stones to a jeweler, designer, or retailer for a defined period, but legal ownership stays with the supplier until the buyer either pays for the goods or returns them. Nothing is sold at the moment of handover. What changes hands is possession and responsibility, not title.
This distinction matters. Because the dealer still owns the stone, the goods on memo do not count as the jeweler's inventory, and the jeweler has not committed capital. The memo document records exactly which stones were released, their certificate or lot numbers, the agreed price, and the date by which they must be sold or sent back, typically anywhere from a few days to several weeks.
How a Memo Transaction Works, Step by Step
The mechanics are straightforward once you have seen them. A retailer has a client interested in an unheated Ceylon sapphire but wants to show three or four candidates side by side before committing. Rather than buy all four, the retailer requests them on memo. The supplier issues a memo form listing each stone, its weight, its lab report number, and its wholesale price, and ships the parcel insured.
The retailer presents the stones to the client. One sells. At that point the retailer notifies the supplier, pays the agreed wholesale price for that single stone, and returns the other three within the memo window. The retailer keeps the retail markup, the supplier collects the wholesale price, and no capital was locked up in stones that did not sell. If nothing sells, everything goes back and no money is owed.
Why Memo Exists: The Problem It Solves
Fine sapphires and rubies are expensive, and no two are identical. A designer cannot keep a representative selection of five-carat unheated stones sitting in a safe on the chance a client walks in, the cash commitment would be enormous. Memo solves this by letting the inventory risk stay with the supplier, who is better positioned to carry it, while the retailer gets access to high-value goods on demand.
It also supports the way colored stones are sold. Clients want to compare, to see a stone in daylight, to set it against a mounting. Memo makes that possible without forcing a premature purchase. For the trade as a whole, it keeps stones circulating and in front of buyers instead of locked away, which benefits everyone in the chain.
The Risks and Responsibilities on Both Sides
Memo is built on trust, and that trust is backed by clear terms. From the moment a stone leaves the supplier, the recipient is generally responsible for it. If a memo stone is lost, damaged, or stolen, the recipient owes the agreed price, which is why reputable jewelers insure goods held on memo and why suppliers extend memo only to buyers they have vetted.
Both parties should confirm the essentials in writing: the precise identity of each stone by lab report number, the return deadline, who carries insurance during transit and while on memo, and the exact price owed if a stone sells. Stones should be returned in original condition and never set, recut, or sent to a client for an open-ended trial without the supplier's agreement. A clean memo relationship depends on both sides treating the paperwork as seriously as the stones.
When to Ask for Memo, and When to Just Buy
Memo makes the most sense for higher-value, one-of-a-kind stones where a client comparison is part of the sale, an important ruby for a custom ring, or a special sapphire a collector wants to see in person. For these, holding the goods briefly without committing capital is a real advantage.
For predictable, repeat-order goods it is often simpler to buy outright. A manufacturer running production typically purchases calibrated sapphires and calibrated rubies in standardized sizes directly, because the stones are interchangeable, the demand is known, and there is no comparison step to manage. Memo is a tool for selection and uncertainty; outright purchase is the tool for known, recurring needs.
At Thai Gems, we have worked with jewelers and designers on both outright and memo terms since 1963, and we extend consignment to established trade accounts once a working relationship is in place. Explore our full range of certified loose sapphires and rubies at thaigems.com, or contact us to discuss trade pricing, memo terms, and custom orders.