Detroit Secondhand Jewelry Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $200
- Who Needs it: All secondhand jewelry stores operating in Detroit, Michigan
- Purpose: To protect the public from financial harm if the secondhand jewelry store violates the terms of their license
- Who Regulates Secondhand Jewelry Stores in Detroit: The Detroit Licensing and Permits Division
Background
Detroit Code of Ordinances 41-3-21 requires all secondhand jewelry stores operating in the city to obtain a license with the Licensing and Permits Division before conducting business. The Detroit City Council enacted the licensing requirement to ensure that secondhand jewelry stores engage in ethical business practices. To provide financial security for the enforcement of the licensing law, secondhand jewelry stores must purchase and maintain a $200 surety bond to be eligible for licensure.
What is the Purpose of the Detroit Secondhand Jewelry Bond?
Detroit requires secondhand jewelry stores to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will be protected from financial harm if the broker fails to comply with the regulations set forth in Detroit Code of Ordinances 41-3-24. Specifically, the bond protects the public in the event the broker engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the secondhand jewelry store violates the terms of its license.
How Can an Insurance Agent Obtain a Detroit Secondhand Jewelry Surety Bond?
BondExchange makes obtaining a Detroit Secondhand Jewelry bond easy. Simply log in to your account and use our keyword search to find the “Secondhand Jewelry” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Detroit Secondhand Jewelry Bond?
No, a credit check is not required for the Detroit Secondhand Jewelry bond. Because the bond is considered relatively low risk, the same low rate is offered to all pawnbrokers operating in the city, regardless of their credit history.
How Much Does the Detroit Secondhand Jewelry Bond Cost?
The Detroit Secondhand Jewelry bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Bond?
Detroit requires secondhand jewelry stores to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Detroit Code of Ordinance 41-3-21, a secondhand jewelry store is a business that purchases and sells any secondhand jewelry, used silverware, or any secondhand precious items containing gold, silver, platinum, or palladium from the general public.
Exemptions to this definition include:
- Coins, commemorative medals, and tokens struck by a government or private mint
- Bullion bars and discs traded by banks and commodity exchanges
- Items purchased directly from manufacturers or wholesalers
- Industrial machinery or equipment
- Scrap metal containing incidental traces of gold, silver, or platinum
- Jewelry trade-ins, alterations, repairs, or returns
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Secondhand Jewelry Stores Apply for a License in Detroit?
Secondhand jewelry stores in Detroit must navigate several steps to secure a business license. Below are the general guidelines, but applicants should refer to the Licensing and Permit Division’s website for details on the process.
First-time applicants must create an account with the city’s Electronic Licensing and Permitting System (eLAPS) prior to applying for a license.
License Period – All Detroit Secondhand Jewelry Licenses expire on October 31st of each year and must be renewed before the expiration date.
Step 1 – Purchase a Surety Bond
Secondhand jewelry stores in Detroit must purchase and maintain a $200 surety bond.
Step 2 – Submit an Application
Secondhand jewelry stores must first submit a completed application online via eLAPS. Store owners must complete the application in its entirety and submit the following items digitally:
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- Current government-issued identification
- Articles of incorporation, if applicable
- Building permit
- Proof of ownership
- Surety bond
Applicants may submit a lease contract or property deed to satisfy the proof of ownership requirement. Contact the Licensing and Permit Division for additional assistance in the application process.
Step 3 – Pay the License Fee
Once the application is approved, secondhand jewelry stores will receive an invoice from the Licensing and Permit Division via their eLAPS account and may pay their $312 license fee at this time.
Step 4 – Submit the Required Clearances
After paying the licensing fee, secondhand jewelry stores must complete and submit the following required clearances prior to being issued a license:
The Licensing and Permit Division will send out a checklist via email of the store owner’s required inspections and clearances. Once all clearances and inspections are approved, secondhand jewelry stores will be issued their licenses.
How do Detroit Secondhand Jewelry Stores Renew Their License?
Secondhand jewelry stores should submit a renewal application online via their eLAPS account to renew their licenses. Store owners are required to pay the annual $312 license fee and submit all required clearances prior to obtaining a renewal license. All Detroit Secondhand Jewelry Licenses expire on October 31st of each year and must be renewed before the expiration date.
What are the Insurance Requirements for Detroit Secondhand Jewelry Stores?
Detroit does not require secondhand jewelry stores to purchase any form of liability insurance. Secondhand jewelry stores must purchase and maintain a $200 surety bond.
How Do Detroit Secondhand Jewelry Stores File Their Bonds?
Secondhand jewelry stores should file their completed bond forms, including the power of attorney, with the Detroit Law Department online here.
The surety bond requires signatures, including witness signatures, from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:
- Legal name and business address of the entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Bond amount
- License type
- Date the bond goes into effect and expires
- Date the bond is signed
- Name and address of witnesses
What Can Detroit Secondhand Jewelry Stores do to Avoid Claims Against Their Bonds?
To avoid claims against their bonds, secondhand jewelry stores in Detroit must ensure that they:
- Do not engage in any acts of fraud
- Do not breach contracts made with consumers
What Other Insurance Products Can Agents Offer Secondhand Jewelry Stores in Detroit?
Detroit does not require secondhand jewelry stores to purchase liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Detroit Secondhand Jewelry Customers?
Detroit unfortunately does not provide a public database of active secondhand jewelry stores in the city. We suggest contacting the Licensing and Permit Division for this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.