How to turn snow into free diamonds
Diamond retailer Mark Miller is betting more than 1 percent of his pre-Christmas sales that it’s not going to snow more than 6 inches on Jan. 1.
But he wouldn’t mind losing the bet, either.
Miller, owner of Diamond Vault Inc. in Reno, has this deal for his customers: If more than a half foot of snow piles up at Reno-Tahoe International Airport on New Year’s Day, he’ll refund every dime his customers paid for merchandise between Nov. 15 and Dec. 24.
For Miller, it’s a safe bet.
A division of American Hole ‘n One, a Buford, Ga., company that makes its living writing insurance for the big payouts for holes-in-one at charity golf tournaments, provides an insurance program for weather-based promotions such as the one launched by Diamond Vault.
Miller pays a premium equivalent to about 1.5 percent of his sales during the promotion that’s less, he notes, than credit-card fees and American Hole ‘n One pays off in case of a big snow on Jan. 1.
A spokeswoman for American Hole ‘n One says the company looked closely at weather records when it calculated the odds and the costs of insuring against the big snow.
National Weather Service records indicate the company was on solid ice when it provided the underwriting on the Diamond Vault promotion.
The average snow in Reno during January not just New Years’ Day, but through the entire month is 5.7 inches, meteorologists say.
And out of the 26 days in which it has snowed 10 inches or more in Reno since weather records were established in 1870, none of the storms has landed on Jan. 1. But there was a close call on Dec. 30, 2004, when 16.4 inches fell.
(The official climatological records don’t provide data on days with 6 inches of snow.)
Along with the cost of insuring against the risk, Diamond Vault also has doubled its broadcast advertising budget during the Christmas season to promote the snow-day giveaway.
“If you’re going to market things like this, you need to make sure people know about them,” says Miller.
He says the promotion has been generating extra traffic to the company’s out-of-the-way location at 4950 Kietzke Lane, on the third floor of the Bank of the West building.
“It’s been working so far,” says the owner of Diamond Vault. “A lot of people have been excited about it.”
Equally important, he says the promotion allows the store to differentiate itself from its national chain-store competition during the all-important holiday period.
“Local businesses have the opportunity to think outside of the box,” Miller says. “We can be more creative than the national chains.”
The cancelation of the 2020 event “severely affected operating revenue,” according to the Great Reno Balloon Race.