Running a 10+1 Monthly Scheme — The Complete Guide for Indian Jewellers

Walk into any jewellery shop in Karnataka, Tamil Nadu, or Andhra and you'll see a small register near the counter labelled "Lakshmi Scheme" or "Sundari Scheme". It's the same idea every time — the customer pays a fixed amount every month for 10 months, the jeweller adds a free 11th month on top, and the customer redeems the total against any piece they want.

This guide is for jewellers who already run a scheme on paper and want to scale it, and for new jewellers thinking about starting one. We'll cover the math, the regulatory rules nobody talks about, the operational discipline you need, and the software pattern that holds everything together.

What is a 10+1 scheme exactly?

A 10+1 scheme is a monthly installment plan with a built-in bonus:

• Customer commits to a fixed monthly installment — usually ₹500, ₹1,000, ₹2,000, or ₹5,000.
• They pay 10 installments over 10 calendar months.
• You add one extra month's installment as a bonus — hence "10+1".
• At maturity (after month 10), the customer can redeem the total — paid installments + bonus — against any jewellery purchase at your shop.

Variants you'll see:

• 11+1 or 12+1 — slightly longer schemes with slightly bigger bonuses (one month free on 11 or 12 paid).
• Festival redemption — schemes that mature timed to Akshaya Tritiya, Diwali, or wedding season.
• Weight-based schemes — instead of fixed rupees, the customer commits to one gram of gold per month. Less popular now because of gold-rate volatility.

The 10+1 with rupee installments is by far the most common because it's simple to explain and the math is transparent.

The math — why it works for both sides

Let's run a typical scheme:

• Monthly installment: ₹2,000
• Total paid by customer over 10 months: ₹20,000
• Bonus added by shop: ₹2,000
• Redemption value: ₹22,000

Effectively, the customer is getting a 10% bonus — but it isn't really a 10% discount. Here's why both sides win:

What the jeweller actually gains

• 10 months of customer commitment. Once enrolled, customers rarely buy from competitors during the scheme period. You've locked them in.
• Predictable cash flow. 100 enrollments × ₹2,000/month = ₹2 lakh/month of guaranteed inflow. This pays your rent before any sale happens.
• Forced upgrade at redemption. Most customers don't redeem exactly ₹22,000 worth — they end up buying a piece worth ₹35,000–₹50,000 and pay the difference in cash. The scheme is just the deposit.
• Word of mouth. Customers tell relatives about the scheme. Family enrollments are normal.

What the customer actually gains

• Forced savings. Indian middle-class families want a way to save for jewellery without dipping into the corpus. ₹2,000/month feels manageable in a way a ₹22,000 lump sum doesn't.
• 10% bonus. Better than most bank fixed deposits.
• Inflation hedge on gold. If gold rates rise during the scheme period, they're locked into earlier rates at redemption time (depending on your scheme T&C).

What the math looks like for 100 enrollments

One scheme campaign of 100 customers can drive ₹35–₹40 lakh of revenue with about 10% gross margin pressure (the bonus) — much better than a flat 10% sale on walk-ins.

The RBI rule you cannot ignore

This is where most jewellers get nervous. Under Indian regulations, accepting deposits from the public is a regulated activity. The RBI's Companies (Acceptance of Deposits) Rules and the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 apply differently depending on how your scheme is structured.

Two common safe patterns

Most retail jewellery schemes today follow one of these patterns to stay safely outside the regulated deposit window:

1. Cap maturity period at 11 months. Deposit rules kick in for tenures of 1 year or more. A 10+1 scheme runs exactly 10 months of collection + 1 bonus month = under 12 months, which avoids most "public deposit" treatment.
2. No interest, only a bonus. Pure cash interest on customer deposits triggers regulated-deposit rules. Bonuses paid in the form of additional jewellery (not cash) generally don't. Phrase your T&Cs accordingly.

What you must do, regardless

• Refund on default within 30 days. If a customer wants out before maturity (and they haven't defaulted on collections), refund the total paid in installments without the bonus, within 30 days of their written request. Document this in your T&C.
• Issue a scheme passbook or receipt. Customer must have proof of every installment paid. Digital records are fine if you can print on demand.
• Don't accept cash above ₹2 lakh in aggregate per customer per year under section 269ST of the Income Tax Act. Use UPI / bank transfer for higher amounts.
• Don't promise a fixed future gold rate. If you do, that becomes a forward contract, which is separately regulated.

The day-to-day operations

A scheme works in three phases — enrollment, collection, redemption — each with its own checklist.

1. Enrollment

• Capture customer name, phone, KYC (PAN if > ₹50,000 cumulative, mandatory for > ₹2L).
• Pick the installment amount and start date.
• Print a scheme card or passbook with all 10 installment slots.
• Take the first installment immediately (so they're committed).

2. Collection (10 cycles over 10 months)

• Most customers pay around the same date each month — 1st, 5th, 10th. Map your reminders to these patterns.
• Send a WhatsApp reminder 2 days before each due date. This single change reduces default rates by 30–50%.
• Accept payment via UPI / cash / bank transfer. Mark the installment as paid in your scheme register.
• Track defaulters in real time. After 2 missed installments, call the customer to renegotiate (extend the scheme, accept a smaller installment, refund and close).

3. Redemption

• When all 10 installments are paid, the scheme matures. Add the bonus.
• Customer comes in to redeem — they pick jewellery; the scheme balance applies as a credit on the invoice; they pay any difference in cash.
• The redemption is just a regular jewellery sale invoice, with the scheme balance treated like a customer advance.
• Close the scheme record. Send a thank-you message and offer to enroll them in another one.

Defaults and early redemption

In our customer data across ~50 jewellers running schemes, about 15–25% of enrollments don't reach maturity. The reasons split roughly evenly between life events (job loss, medical, relocation), losing interest, and forgetting.

Your options when someone defaults

• Premature redemption (no bonus). Customer takes back what they paid, no bonus added. This is the cleanest and most legal-friendly option. Process within 30 days of request.
• Carry-forward credit. Convert their paid balance into a customer-ledger credit they can apply to a future purchase, no bonus. Some customers prefer this so they don't get out of the habit.
• Forfeiture clause. Some schemes' T&Cs say defaults after, say, month 5 forfeit a portion of the deposit. Legally enforceable but reputationally risky — angry customers post on Google reviews. We don't recommend it.

How to account for scheme deposits

This is where most jewellers' books get tangled. The principle: scheme installments are NOT revenue when collected — they're a liability until redemption.

The correct ledger flow

When a customer pays an installment of ₹2,000 in cash:

Notice — no revenue is booked. The cash is a liability, not income, because you owe the customer jewellery (or refund) until they redeem.

At redemption, when the customer's ₹22,000 scheme balance applies to a jewellery sale of, say, ₹35,000:

The bonus is booked as an expense at redemption — not at enrollment, not at collection. This matches the actual cash outflow.

Running 100, 500, 1,000 schemes simultaneously

Running 5 schemes on paper is easy. Running 500 is a different sport. The breaking points:

At 50 schemes

Paper register starts feeling tight. You spend ~30 minutes a day chasing missed installments. Manageable.

At 200 schemes

Paper is unmanageable. Without software, you'll lose at least ₹5,000–₹10,000/month to forgotten collections, double-paid installments, and disputes. WhatsApp follow-up at scale needs scripting.

At 500+ schemes

You need:

• Automated reminders — bulk WhatsApp on due dates.
• Per-customer ledger with running balance.
• A "schemes maturing this month" dashboard so you can call them in.
• Auto-flagged defaulters after 2 missed cycles.
• Bonus accrual visible at all times so you know your total liability.

This is exactly what the Schemes module in Aurex ERP does — included free on Growth and Enterprise plans. Enrollment in 30 seconds, monthly collection in one click, dashboard tile showing schemes maturing in the next 30 days, total scheme liability visible on the Balance Sheet.

FAQs

Can a customer enroll in multiple schemes simultaneously?

Yes, and many do. A family of four might run four parallel schemes, redeeming on different dates. Track each as its own enrollment.

Is GST charged on scheme installments?

No GST on collection — it's a deposit, not a sale. GST applies only on the final invoice at redemption, calculated on the full sale value (₹35,000 in our example).

What if gold rates fall during the scheme period?

The redemption value in rupees is fixed (paid installments + bonus). When rates fall, the customer's effective gold-weight gain is higher. When rates rise, lower. This is why some schemes specify "redemption against today's rate on maturity day" — it caps the customer's gain.

Can I run a 24-month or 36-month scheme?

You can, but tenures of 12 months or more push you into regulated-deposit territory. Most jewellers cap at 10-11 months for this reason. If you want longer, talk to a CA about structuring it correctly.

How do I handle a customer who lost their scheme card?

If you've been recording installments in software, no problem — print a duplicate from the system. If you've been on paper, you need an alternative verification (UPI history, bank statement, your own register). This is one of the strongest arguments for moving to software-tracked schemes.

This is general guidance; specific RBI / state-government rules around jewellery savings schemes vary by location and change over time. Always check with a practising CA or company secretary before launching a new scheme structure.