3
Fall Sales Forecasts Strong
Michigan retailers’ sales forecasts remain strong for fall despite a drop in August sales. Page 3
4
Meet Emily Matthews
Emily Matthews, Lansing community foundation leader and a force behind a growing restaurant group, is the newest member of the MRS board. Page 4
9
Return Policies
A recent court case dispute upholds Michigan law that retailers can establish their own return policies. Page 9
® October 2015 Vol. 40 No. 5
From U.P. to Detroit, retailers add support to Buy Nearby efforts In the run-up to Get Caught BlueHanded Day on October 3, retailers and community leaders in Traverse City and Marquette joined the chorus of Buy Nearby advocates. Detroit retailers were scheduled to add their voices at a news conference on September 30 (after this issue went to press). It marked the last of five regional news conferences held by MRA throughout the spring and summer to spread the word about Buy Nearby. The first two were held in Saugatuck and Lansing’s Oldtown district. “Buy Nearby is a great project for the whole state of Michigan,” Traverse City Mayor Michael Estes said at the August 6 event in his town. “I feel that in Traverse City and Grand Traverse County we’ve been practicing this for many years. You can come and visit our downtown and see the great success we’ve had because our residents understand that buying locally is extremely important.” Karen Hilt, owner of My Secret Stash, said it’s easy for shoppers to embrace Buy Nearby. “Some people think you suddenly have to stop buying what you normally buy. We’re just asking you to visit one or two more local businesses a week. “It’s real easy to begin buying nearby, just one shop at a time. It definitely helps the economy, and it helps all the local families and small businesses as well.” Flanked by the large Buy Nearby Guy mascot, MRA President and CEO Continued on page 5
The official publication of the Michigan Retailers Association
www.retailers.com
October 1 start for Main St. Fairness Michigan’s retail playing field became more level on October 1 with the start of the new Main Street Fairness laws. Governor Rick Snyder signed the two-bill package into law on January
15. The laws contained an effective date of October 1 to give out-of-state retailers and state government time to prepare for the changes. “Fairness has been a long time coming, but well worth the wait,” said
James P. Hallan, MRA president and CEO. “The new laws remove the 6 percent price advantage that many non-Michigan merchants have exploited to full advantage and the detriment of Michigan’s economy.” Starting October 1, merchants outside Michigan that meet the new and expanded definition of physical presence in the state must collect and remit the 6 percent sales tax on goods sold to Michigan residents. “Also important is the fact these changes take effect in time for this year’s holiday shopping season,” said Hallan. “For the first time, our retailers will not be competing with their hands tied during this busy season.” Continued on page 9
Unemployment taxes lowered Filmmaker Orin Mazzoni III (right) with gem cutter Roger Dery of Royal Oak in East Africa during filming of “Sharing the Rough.”
Jeweler-turned-filmmaker shows gem’s epic journey by Doug Henze
With its captivating color or hypnotizing sparkle, a gemstone may take only a moment to catch a consumer’s eye and start the imagination running. Yet despite its brilliance, the precious stone never reveals the story of the lives touched during its journey from inside the earth to the interior of a jeweler’s display case. Not until now. “Sharing the Rough,” a new docu-
mentary by independent Michigan filmmaker Orin Mazzoni, III, is breaking the silence. The film was scheduled to make its official premiere in Michigan on September 16, 17 and 21. “Nobody really thinks about that when they walk up to the jewelry case: How did this get created?” said the 41-year-old Livonia native who has a strong jewelry industry pedigree. “The plan was to follow a gem to show how it went from mine to market. There’s really never been any film that shows what we show.” East Africa To tell the tale, Mazzoni and a Continued on page 6
Most Michigan businesses can expect to pay less in state unemployment taxes, starting with the third quarter (October 1) of this year. Michigan’s unemployment taxes were lowered due to a drop in the maximum annual wage on which an employer must pay unemployment taxes, from $9,500 to the new level of $9,000, the state’s Unemployment Insurance Agency announced. Michigan lawmakers raised the level in 2011 to ensure adequate funding for the state Unemployment Trust Fund. The same legislation mandated that when the Trust Fund balance reached $2.5 billion and was expected to remain there for two consecutive quarters, the maximum annual taxable wage base would decrease automatically to $9,000. That condition was met on July 27, the agency said. The reduction applies only to contributing employers who are not delinquent in their payment of unemployment contributions, penalties or interest. Reimbursing employers also are excluded. Additional information is available from the agency, at 855-4-UIAOEO.
2
Michigan Retailer
Retail Champions
www.retailers.com
Board of Directors: Dan Marshall
Chair Marshall Music Company, Lansing
James P. Hallan
by James P. Hallan, MRA President and Chief Executive Officer Barb Stein, founder and owner of Great Northern Trading Co., in Rockford and a member of MRA’s Board of Directors, was given an additional title this summer: “Retail Champion.” Barb has always been a champion to those of us who know and work with her, so it was good to see her receive national recognition – in Washington, D.C., no less.
Congratulations, Barb, from all of us at Michigan Retailers and throughout the industry for representing Michigan so well. You are a champion! MRA PAC You can be a champion, too. There are many ways to get involved in Michigan Retailers’ advocacy efforts. One of the easiest is to support the work of the
MRA Political Action Committee by making a donation. Our PAC is an import advocacy tool, because it helps elect state lawmakers who support the retail industry’s issues – issues that have a direct impact on the bottom line of your business. This fall you will receive a letter asking for your PAC support. Please give the request your serious consideration.
Members elect four MRA directors
Barb Stein in Washington, D.C., for the July “Retail Champions” event.
She was among a group of some 50 local retailers representing their states in the nation’s capital. The honor was bestowed upon her by the National Retail Federation, specifically for her “engagement in grassroots and advocacy efforts on local, state and federal issues affecting the retail industry.” Barb is always willing to get involved on important government issues facing our industry, and there was no issue more important than Michigan Retailers’ latest push for Main Street Fairness legislation the past several years. Our success in leveling the retail playing field against out-of-state merchants who have not invested in Michigan is the result of a lot of hard work by many people. Barb was in the thick of it, always willing to testify before a legislative committee in Lansing or make other retailers or lawmakers aware of the problem – and the solution. In fact, she was one of the retailers invited by Governor Rick Snyder’s office to be on stage during the Main Street bill signing ceremony at the beginning of this year.
The MRA Board of Directors elected officers for 2015-16, following the membership’s election of four incumbents at the 2015 Annual Meeting. Both meetings were held at MRA headquarters in Lansing on August 25. Dan Marshall, president of family owned Marshall Music Co., headquartered in Lansing, was elected board chair for a second year. Orin Mazzoni, Jr., owner of Orin Jewelers in Garden City and Northville, was re-elected vice chair. Peter Sobelton, owner-partner in several retail property companies and former owner of two retail businesses in Birmingham, continues as treasurer. Members elected Sobelton and the following incumbents to new threeyear terms on the MRA board: • Brian Ducharme, vice president and general manager of the Mobility Division of AT&T for Michigan, Indiana and Ohio; • Joe McCurr y, an executive with Credit Card Group and retired Detroit district general manager for Sears; • Larry Mullins, owner of Brandon Tire & Auto Service Center in Ortonville. Retailers Insurance The new entities created last year by the new corporate structure of MRA’s insurance company held their first annual meetings on August 25, also at MRA headquarters. Incumbent board members were elected to the Retailers Mutual Holding Company, Retailers Stock Company and Retailers Insurance Company boards. Re-elected to new three-year terms were: James P. Hallan, president and CEO of MRA and Retailers
Insurance; Mark Miller, executive vice president of Hylant Group; and Jean Sarasin, retired executive vice president and COO of MRA and Retailers Insurance.
President and CEO Michigan Retailers Association
Orin Mazzoni, Jr.
Vice Chair Orin Jewelers, Garden City
Peter R. Sobelton Treasurer Birmingham
William J. Hallan
Secretary Michigan Retailers Association
Thomas Ungrodt
Past Chair Ideation, Ann Arbor
Brian Ducharme AT&T
Becky Beauchine Kulka
Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos
Joseph McCurry
Credit Card Group
Larry Mullins
Brandon Tire & Auto Service Center, Ortonville
R.D. (Dan) Musser III
Grand Hotel, Mackinac Island
Barb Stein
Great Northern Trading Co., Rockford
Joe Swanson Target Corp.
James Walsh
Meijer, Inc., Grand Rapids Joyce
Marshall
D. Larry Sherman
Board Member Emeritus
Michigan Retailers Services, Inc. Board of Directors: Bo Brines Little Forks Outfitters, Midland
Bill Golden
Golden Shoes, Traverse City Miller
Mazzoni
The Retailers Insurance Company board re-elected its officers following the annual meetings. Elected to new one-year officer terms were: Chair Jeff Joyce, vice president and co-owner of Mieras Family Shoes, Grand Rapids; and Vice Chair Mark Miller. Retailers Services The MRA board also re-elected both incumbent outside directors of the Michigan Retailers Services, Inc., board. Elected to one-year terms were: • Bo Brines, owner and president of Little Forks Outfitters in downtown Midland; • Bill Golden, co-president of Golden Shoes, a family owned and operated shoe store in downtown Traverse City.
Emily Matthews
Capital Region Community Foundation, Lansing Potent Potables Project, Lansing
James P. Hallan Thomas B. Scott Publisher
Editor
Pat Kerwin
Design Manager
Publication Office: 603 South Washington Avenue Lansing, MI 48933 517.372.5656 or 800.366.3699 Fax: 517.372.1303 www.Retailers.com www.RetailersInsurance.com www.BuyNearbyMI.com
Subscriptions:
Michigan Retailer (USPS 345-780, ISSN 0889-0439) is published in February, April, June, August, October and December for $20 per year by Michigan Retailers Association, 603 South Washington Ave., Lansing, MI 48933. Subscription fees are automatically included in the Michigan Retailers Asociation membership dues. Periodical postage paid at Lansing, Michigan. POSTMASTER: Send address changes to 603 South Washington Ave., Lansing, MI 48933. The Michigan Retailer may be recycled with other white office paper.
October 2015
3
MICHIGAN RETAIL INDEX
Fall forecasts stay solid despite August sales dip The 100-point index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity. Looking forward, 59 percent of retailers expect sales during September–November to increase over
Current
the same period last year, while 22 percent project a decrease and 19 percent no change. That puts the seasonally adjusted outlook index at 68.0, down slightly from 69.7 in July. A year ago August the outlook index stood at 70.6. Sales tax receipts totaled $624.5 million in August, down 0.7 percent from a year ago. That was despite 5 percent growth in sales tax collec-
3-Month
14 -15
Performance Index
13 -14
80
70
70
60
60
50
50
40
40
30
30
tions from vehicle sales. For the year, sales tax collections are 0.4 percent below last year’s level. 4. Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www. retailers.com/mra/news/michiganretail-index.html. The website includes figures dating back to July 1994.
14 -15
Outlook Index
80
13 -14
2014 700 600
649 641
2015
681
652
629 624
500 400 300
AUG
JUL
JUN
MAY
APR
MAR
FEB
JAN
DEC
OCT
NOV
SEP
AUG
JUL
JUN
MAY
APR
MAR
FEB
JAN
DEC
NOV
SEP
OCT
Michigan retailers’ sales forecasts remain strong for fall despite a drop in August sales, according to the latest Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago. The retail industry’s overall sales performance fell in August to its lowest level in six months, but retailers’ three-month forecasts remain solidly positive. “The consensus is that the late dates for Labor Day and the reopening of schools ended up pushing some normal August spending into September,” said MRA President and CEO James P. Hallan. “Retailers’ sales forecasts remain positive, and further declines in gasoline prices and the unemployment rate should boost retail sales.” The August survey of MRA members showed 37 percent of retailers increased sales over the same month last year, while 42 percent recorded declines and 21 percent reported no change. The results create a seasonally adjusted performance index of 43.9, down from 65.3 in July. A year ago August the performance index stood at 46.
Seasonally adjusted diffusion index, calculated by adding the percent of respondents indicating increased sales and half the percent indicating no change, and then seasonally adjusting the result using the U.S. Census Bureau’s X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.
200 (millions)
Jun
Jul
Aug
Be sure to complete your online survey each month!
46
Michigan Retailer
www.retailers.com
MRS adds entrepreneurial community leader by Doug Henze
If you want something done, goes the old saw, ask a busy person. So who better to tap for a Michigan Retailers board position than a lawyer-restaurateur-foundation leader-community volunteer? Lansing mover and shaker Emily Matthews wears all of those hats. With her June appointment to the Michigan Retailers Services, Inc. Board of Directors, she adds yet Matthews another important chapeau. MRS is the wholly owned subsidiar y of Michigan Retailers Association. It provides business services, products and other benefits, including expert credit card processing, for MRA members and affiliated organizations in all 50 states and the District of Columbia. She attended her first board meeting on August 25. “I bring general foundation experience, credit card processing expertise as well as experience running a small business,” said Matthews, chief operating officer of the Capital Region Community Foundation. “I want to be as engaged as possible and provide as much value as I can.”
thews recalled. “It was my dream.” She spent nearly seven years with Delta, gaining expertise in electronic credit card transactions and ultimately becoming associate general counsel, before leaving the company for the community foundation in July 2014. The nonprofit, which has $83 million in assets, provides $3 million to $4 million a year in grants to nonprofit organizations in Ingham, Eaton and Clinton counties. “It’s everything from arts and culture to feeding the hungry,” said Matthews, who oversees a wide range of areas from human resources to grants and investments. “We kind of do it all. The grants that we give out are amazing and have an incredible impact on the community.” The foundation’s gifts sometimes make a small but dramatic impact – providing $500 to a student who couldn’t afford a laptop for college, for example. Other efforts have a broader effect. “We completely remodeled all of the rooms in the Ronald McDonald House across from Sparrow Hospital,” Matthews said. Ronald McDonald houses provide a place for families to stay when sick children are hospitalized, relieving the families of a financial burden.
Entrepreneurs Matthews’ community involvement doesn’t stop at work. She and husband, Aaron, along with three partners, are the force behind a growing, entrepreneurial restaurant group operating in a revitalized commercial area of Lansing. Through an operating entity called the Potent Potables Project – a nod to one of the categories on the Jeopardy! television game show – the group of investors is readying to open a fourth establishment early next year. The group includes Aaron Matthews, an attorney who handles liquor licenses for clients, real estate developer Alan Hooper, and Sam Short, who has opened restaurants in locations r a n g i n g f ro m Chicago to Phoenix. Emily Matthews is not a legal owner but is involved with the restauAaron Matthews (left) with employees at The Cosmos, next rants. door to Zoobie’s. Photo by David Trumpie The group got Community Involvement The Tecumseh native, who holds a bachelor’s degree in environmental science from the University of Michigan and a law degree from Indiana University, began making her mark in Lansing in 2001. After graduating from law school, she accepted a full-time position in Lansing with the Foster, Swift, Collins & Smith law firm, rising to partner during her career there. That led to a position at Delta Dental Plan of Michigan, which Matthews joined in 2007. “I wanted to go in-house,” Mat-
its start when it launched Zoobie’s Old Town Tavern in June 2013. “We completely refurbished an old factory bar to an upscale, shabbychic establishment,” Matthews said.
More on Menu The restaurant group’s newest endeavor is an eatery called The Creole, which features New Orleans-style food. Also in Old Town,
“We completely refurbished an old factory bar to an upscale, shabby-chic establishment.” The bar’s location in Lansing’s Old Town district wasn’t happenstance. Husband Aaron is managing partner of the Clark Hill law firm there and has served as
the establishment was scheduled to open in September. Next on the menu will be a taqueria – Spanish for taco shop – that’s slated to open in the Frandor area in early 2016. That restaurant has not yet been named. And on the back burner is the redevelopment of Old Town’s Temple Building. With a full plate, the restaurateurs have no timetable for renovation of the former Masonic Temple, which is currently home to the local Makers Network. “We hope to make that into an event center for weddings and formal events,” Matthews said. When she’s not working, Matthews spends her time pursuing recreational activities and volunteering. Living on a lake in Laingsburg, she and her husband spend much of their time boating. “We do a lot of travel,” she said, adding that they often return with ideas for their restauEmily and husband Aaron Matthews outside rants. “We just came their first project in Lansing’s Old Town. Photo by David Trumpie back from Argentina, Chile and Uruguay.” president of the Old Town ComMatthews, the former chairpermercial Association. son of the Greater Lansing Regional “My husband and our family are Chamber of Commerce Economic very invested in the Old Town comClub, volunteers with the Sparrow munity,” she said. “Basically, Old Hospital Foundation’s Women WorkTown is our heart.” ing Wonders Committee and the The Potent Potables group liked Aitch Foundation. the location enough to purchase Lansing’s chamber of commerce adjoining property, opening a resnamed both Emily and Aaron Mattaurant called The Cosmos this past thews to its “10 over the Next Ten” January. Attached to Zoobie’s by an list, honoring young professionals, in internal walkway, the restaurant fea2007. Both turned 40 this year. tures a wood-fired pizza oven and an “We’re really, really, really dedioutdoor patio with a bar and a fire pit cated to the Lansing community,” for pig roasts. she said. “It has kind of a space theme to it,” she said. “We had a mural created by Doug Henze is a freelance writer and artists in the Birmingham area. It has former business reporter for the Oakastronauts and it’s very colorful.” land Press in Pontiac.
October 2015
5
From U.P. to Detroit, retailers add support to Buy Nearby efforts Continued from page 1
James P. Hallan summed up the campaign this way: “The purpose of Buy Nearby is to remind people to reinvest in their community and support those retailers who have invested in their community, because retailers create jobs and those dollars spin many times throughout the economy.” Others participating in the news conference were: Bill Golden, owner of Golden Shoes and an MRS board member; Misha Neidorfler, owner of Morsels Espresso+Edibles and vice president of the Downtown Traverse City Association; and Brad Van Dommelen, president and CEO of Traverse City Tourism. Marquette The Marquette group was equally as enthusiastic on September 3. “Buy Nearby is a very important campaign and testimony to the jobs in this area, good jobs,” said Tom Vear, owner of Donckers and host of the news event held on the sidewalk outside his confectionary and variety store. He said studies show that about $7 of every $10 spent in downtown Marquette stays in the local economy to support and create local jobs. “Buy Nearby is important not only to our business, but to all the businesses around us,” he said. Mayor Mike Coyne welcomed Buy Nearby Guy to Marquette and endorsed the campaign. “Every time our friends or family come to Marquette, they want to come downtown because it’s such a vibrant place. Without this vibrant downtown, Marquette would not be anywhere near what a beautiful, spectacular city it is… “I think it would be nice if every time you were going to make a purchase you’d think about buying nearby. Because it truly is the lifeblood of this community.” Jess Shull, owner of Boomerang Retro & Relics, said summer tourists who tell her how wonderful Marquette is want to know the secret. “And the secret is the support that we get from our locals. Tourism season is great, but it’s three months out of the year…If people really focus on doing their holiday and other shopping in the area where they live, that helps keep their community vibrant, and it keeps their job going and other jobs going.” Rounding out the program were Wattsson & Wattsson Jewelers co-owner Chris Wattsson, DDA Director Mona Lang and City Commissioner Tom Baldini. New Tags Get Caught Blue-Handed Day, the one-day celebration of the year-round Buy Nearby campaign, was shaping up to be the biggest since it began in 2013.
New this year were special merchandise tags and thank-you cards created by MRA and provided free to participating retailers. Store owners were encouraged to use the tags to draw attention to special or sale merchandise in keeping with the fun and valuable shopping day. Through mid-September, MRA had mailed out thousands of tags and cards to retailers who requested them. MRA also offered shoppers the chance to win cash gift cards by posting photos on social media of themselves “getting caught” buying nearby with friends or family. Shoppers could post the photos along with the hashtag #ibuynearby or #buynearbymi on Facebook, Twitter or Instagram. Buy Nearby is sponsored for the third consecutive year by DTE Energy, with supporting sponsors Pure Michigan/Michigan Economic Development Corporation, Discover, AT&T, Michigan State Housing Development Authority, and Retailers Insurance Company. The campaign also received more than $1,000 from individuals. Top: Civic leaders, retailers and MRA came together in Traverse City to talk about the importance of Buy Nearby. Middle: Traverse City retailer Phil Anderson greets Buy Nearby Guy during the mascot’s stroll through downtown. Bottom: Marquette civic leaders, retailers and MRA held a Buy Nearby news conference outside Donckers. Traverse City photos by David Trumpie.
6
Michigan Retailer
www.retailers.com
Michigan filmmaker shows gem’s journey from ‘mine to market’ Continued from page 1
film crew spent 17 days in early 2014 A tough economy and a growing Adds Roger Dery, a gem cutter and in the East African nations of Kenya passion for filmmaking made him longtime Mazzoni family friend who is and Tanzania. The 85-minute film change course in 2010. a “star” of the documentary, “A lot of traces the path of a green garnet “It was the hardest decision I had people take things for granted – that from the ground to its new home to make in my life,” said Mazzoni, they can just go into a store and walk in a 13-carat piece of jewelry purwho had applied to film school sevout with a gem.” chased by a consumer entranced by eral times before but could never cut Understanding the whole story the experience. the familial cord. “I had “Sharing the Rough” – named for worked in the family the material that is processed to jewelry business since I create finished gemstones – is the could walk.” first feature-length film for Mazzoni, Mazzoni’s father, Orin a 2012 graduate of San Francisco’s Mazzoni, Jr. – who took Academy of Art University. Private over the business his investors and crowdfunding source own father had started Indiegogo provided funding for the nearly quarter-million-dollar project. The film looks at the rugged life of gem miners, many of whom are Maasai tribesmen. Branching out from a life of farming and herding, they sometimes burrow 1,500 feet into the ground, primarily using picks and shovels. Miners, who must pump air from the surface into the mines, may work four to five weeks without finding a gem suitable to sell. “The miners live a tough life, but they also live a good Orin Mazzoni, III life and they’re doing what they want to do,” Mazzoni said. “The people are doing it out of in 1933 – remembers love and passion.” mixed feelings when he While making the film, Mazzoni and learned his son wouldn’t his crew got a taste of the gem huntbe following in his footers’ lifestyle. steps. “We were traveling 6, 7, 8 hours “It was a ver y difdeep in the bush in the middle of noficult decision and a where, because that’s where the rich little disappointing at veins are,” he said. the time,” recalled the “As far as the countries’ infrastrucdad, who operates Garture, outside the main cities it doesn’t den City and Northville exist. As you travel, your head is getstores. “I also knew ting banged against the Land Rover.” that he needed to go Mazzoni also encountered beaudo this. It’s something tiful, mountainous landscapes and he had a passion for.” wildlife most Americans will never After viewing “Sharsee outside of zoos. ing the Rough,” the “We’re having lunch,” Mazzoni reelder Mazzoni said called, with a chuckle, “and there are he knew his son had herds of elephants coming up to this made the right career water pot.” choice. He believes the film will be an eye Hard Decision opener for jewelr y The experience was much more consumers and mer- Orin Mazzoni, Jr. than a sightseeing excursion for chants alike. Mazzoni. “For the people who will see it can give consumers a richer exHaving grown up in his father’s rewho are not in the industry, it will perience in selecting a gem and tail jewelry business, Orin Jewelers, give them a whole new appreciation may lead to less bargain hunting with stores in two Detroit suburbs, it of what it takes to find a gemstone on consumers’ part, according to was expected he would one day take and what it takes to get it from the Dery, owner of high-end gem-cutthe torch of running the family busimine to a piece of jewelry,” said ting company Spectral Gems Inc. ness. He earned a bachelor’s degree Mazzoni, Jr., a former president of of Royal Oak. in economics from Central Michigan the Michigan Jewelers Association It was Dery, a veteran of African University in 1997, added a gemoloand current vice chair of the Michitravels, who took Mazzoni on a scoutgist degree in 1999 and worked at gan Retailers Association Board of ing trip for the film in 2011 and again Orin Jewelers for about a decade. Directors. accompanied the film crew in 2014.
Changing Perceptions Mazzoni is hoping his film also changes the public perception about how mining operations are conducted in East Africa. “It’s not all about blood diamonds,” he said, referring to stones mined to finance a war. “It’s not all about child labor. The people in the industry are telling me that [what is actually going on there] is a game-changer for the jewelry industry.” Dery, who estimates he has visited 300 mining sites during his 23 trips to Africa to acquire rough, said he’s never seen children working in mines. “I’m not interested in buying a gem from a 9-year-old kid,” he said. “That guarantees that kid is not going to school.” Instead of keeping children from education, the gem mining industry is raising money to build schools, Mazzoni said. Older children, some of whom are homeless, are being trained to cut gems. Much of the rough now is shipped to India or China for cutting, with little return for African nations. “They could end up having a self-sufficient economy,” said Mazzoni, who is donating part of the proceeds of his film toward that training effort. “Sharing the Rough,” which Mazzoni first screened at film festivals and private events beginning in April, was slated to be unveiled to the public in Northville on September 16 and 17 at The Marquis Theater, and in Bloomfield Township at the Maple Theater on September 21. The film is currently on a nationwide tour. Although Mazzoni says he’s not planning a “Sharing the Rough” sequel, he is thinking of going back to Africa next year to film the progress being made there and the differences taking place in people’s lives. Doug Henze is a freelance writer and former business reporter for the Oakland Press in Pontiac.
October 2015
7
RETAIL TECHNOLOGY NEWS
Payment card liability shift leads to Three Card Monty
Mascot spreads Buy Nearby word Continued from page 5
John Mayleben CPP, is MRA senior vice president technology and new product development and a national expert on electronic payment processing. He is the first person in Michigan and among the first in the nation to receive the Certified Payments Professional designation from the national Electronic Transactions Association. The wide spread distribution of EMV/Chip payment cards and the October 1 shift of liability away from those with the latest technology has sure produced a
lot of chatter. Although much of the discussion has made for better understanding of the payments industry and security issues, some of it has approached hysteria on the part of sales people
value of spending limited resources simply to upgrade. No Free Lunch There are a lot of sales people out there pushing “free” terminals as an inducement to get you to switch processors. But there is no free lunch! If you are approached by someone offering you a “free” terminal, make sure you read and understand the fine print. Almost always, the free terminal is part of a bundled package and will require you to process with the new vendor for a long period of time. If you try to leave for any reason, you could get hit with their often outrageous Early Termination Fees that lock you into a contract with that vendor. While it is entirely appropriate to be required to compensate the vendor for the cost of the terminal you received for “free,” you need to know the calculation behind the amount you’re
“The best advice is to make sure the conversation you have with processors bearing new terminals is built on fac t, not fic tion.” who want you, the retailer, to switch processors and buy a new machine from them. As you probably noticed, the sun still rose normally on October 1 and your credit card terminal still worked the same. The customers who came into your store on October 1 were still able to use their cards. But despite that reality, there are a lot of people who want you to think that you need to switch processors – because if you don’t, the world as you know it is about to end. Much like Three Card Monty, the rigged game of chance that is played with the intent of taking your money, there are some people pushing new terminals who will tell you whatever it takes to get you to switch. Fact Not Fiction The best advice in “2015: Year of Change” is to make sure that the basis of the conversation you have with processors bearing new terminals is built on fact, not fiction. Although it’s often wise to upgrade your technology, especially if your older terminal is no longer supported by its manufacturer, there are cases where you may not want to upgrade simply because of EMV. As explained in previous columns, not all merchants that accept cards for payment will see a change in frequency of chargebacks or see the
Continued on page 9
During a tour of the Upper Peninsula, Buy Nearby Guy visited several communities, including: (left) Naubinway, at the Anchor In; (top right) Sault Ste. Marie, at the Museum Ship Valley Camp; and (bottom right) Marquette, at the gold mine inside Wattsson and Wattsson Jewelers in Marquette.
“When opportunity knocks, be sure to answer. Sign
up for a Lynch Sale today!”
Chris Lynch, Co-CEO, Lynch Sales Company
For over 100 years, the family-owned Lynch Sales Company has delivered on our promise to help our retail clients succeed through Lynch promotional sales, or close with dignity with our complete closeout sales. I am particularly proud that many of those storeowners reward us with their repeat business, time and again. Let them tell you why they prefer the integrity of our business model and our one-page contract over that of our competition.
To hear more from successful retailers, visit www.lynchsales.com/testimonials
OVER 100 YEARS OF INTEGRITY AND RESULTS Serving the U.S., Canada and the U.K. Call (800) 824 - 2238 or www.LynchSales.com Copyright 2015 Lynch Brothers Licensing Corporation
8
Michigan Retailer
www.retailers.com
Railing for Retailing
Little things make big difference
Michigan’s choice for
workers’ compensation and group dental insurance. Workers’ Compensation Insurance
Quality care for injured employees. Claims review by business owners like you to reduce fraudulent claims and keep rates down.
Dental Insurance
Quality dental insurance plans through Delta Dental. Coverage for groups as small as two. Affordable, quality coverage for every Michigan business.
®
Retailers Mutual is your Michigan company ... Large enough to protect you. Small enough to care. Close enough to Buy Nearby.
Editor’s note: Retailer, retailing instructor, consultant and columnist Steve Flaster embarked on a 30-day, summer train trip looking for good retail ideas and stories. This is the second installment. by Steve Flaster GLACIER FA L L S N A TIONAL PARK, MONTANA – I can’t be the first tourist to worr y about getting lost and missing what I am supposed to see. The more I travel, the more I realize that seemingly little things – like clear, simple signs – can save the day. At this fabulous park, one of many important signs simply said, “Bus loading here for Logan Pass.” It led me where I wanted to go for a truly thrilling experience, and I would have been lost without it. The situation is similar in retailing. A store is like a big park with many wonderful things to see and buy. If a customer doesn’t know which way to turn, he or she becomes lost in merchandise space. Both the customer and store end up losers. Customers, like tourists, have limited time. Stores must create signs that direct customers to what they are seeking and inspire them to seek out other things as well. Good signs help shoppers make good use of their precious time. A store directory is always helpful.
“Welcome” and” Thank You” signs are appreciated and make customers feel good about shopping there. If some exciting special event is taking place, a sign at the front door should tell customers about it. There should be a consistent quality about all the signs, and they should reflect the store’s style. There’s always the risk, of course, that you will overwhelm customers with too many signs. Therefore, retailers must think out their signing strategy to reflect what is happening in the store, what will support other promotions, and what customers will find helpful to know, such as the location of rest rooms. Perhaps retailers should start thinking of customers as tourists visiting a special place to which they will want to return. Good signage, starting at the entrance and ending at the exit, will help customers, like tourists, enjoy the best possible experience and inspire them to come back. There is an old saying that “we shouldn’t sweat the small stuff.” The problem is that we don’t always realize that seemingly small stuff like signs can be really big stuff to our customers.
Everyone gets treats at this pet boutique
To learn more, ask your Independent Agent, call 800.366.3699 or visit www.RetailersMutual.com. 0414
PORTLAND, OREGON – Tired of all the drab, solely utilitarian pet stores around the country, I howled with delight at the Hip Hound Boutique and its different format. While I can’t say I interviewed any dogs about their shopping experience, the pet owners told me it’s a delightful place to shop. Hip Hound is uplifting, upscale and upbeat. It is filled with colorful, spot lit displays of merchandise that is new and different for both pets and pet lovers. Display windows feature dog portraits from a local artist with whom the store collaborates. At the entrance are silver water bowls for pets and an espresso bar for those who accompany them. The storeowners’ dogs serve as official greeters and are appropriately dressed to do so. And then there is “Yappy Thursday” every three weeks, which features special dog treats, champagne for pet owners and new merchandise. The Hip Hound is one of many “breeds” of retailer that must please
both the customer and the consumer. It calls itself a boutique, which suggests a creative and individualistic approach to merchandise,
experience and presentation. It’s an important example for every locally owned specialty store that must – and can – win the battle by creating a unique personality shoppers will seek out. Whether two-legged or fourlegged, everyone “shopping” at a specific store should leave happier than when she or he arrived and be the proud owners of new possessions. Making that happen is the challenge faced by all retailers.
October 2015
9
IT’S THE LAW
Michigan law protects retailer return policies by William J. Hallan, MRA Executive Vice President, COO and General Counsel A member recently came to MRA with a problem regarding returns. The member business had sold an expensive item, which the consumer paid for by credit card. The receipt clearly stated that the member provided only store credit on returns. Days later, not wanting to accept the member’s long established return policy, the customer disputed the completed sale. Litigation ensued. Shockingly, the trial court ruled in favor of the customer, reasoning that
Michigan law is well settled in the area of consumer returns. Specifically, merchants are not required to accept a returned item unless the item is defective. In fact, the state attorney general’s consumer protection website specifically states, “[i]f a retailer has a no-return policy, the law does not require the store to accept returns of items unless the items are not as represented or are defective.” Slippery Slope Creating exceptions to the law is a slippery slope, and the trial court’s ruling would have led to one. Merchants and consumers need consistency so there are no misunderstandings of expectations. In Michigan, merchants are entitled to establish their own return policies, and the law requires merchants to apply those policies uniformly to all consumers. The law does not make consumers powerless. If a consumer does not like a store’s policy, the consumer can simply take his or her business elsewhere. However, reversing a store’s policy because the purchase was impulsive would erode consumer confidence. As you consider your own return policy, make sure it is clearly posted for your customers. If you have a specific return policy that you’d like printed on your credit card receipts, please contact our customer service department at 800.366.3699 to help you.
Oct. 1 for Main St. Fairness Continued from page 1
Treasury Outreach MRA has been working well with the Michigan Department of Treasury on implementation, Hallan said. Treasury is in the process of contacting non-Michigan businesses to make them aware of the new laws and alert them they may be required to collect and remit sales tax, according to department spokesman Terry Stanton.
retailers. MRA put on its most effective push for legislation the past four years. The bipartisan legislation was enacted by lawmakers in the final hours of the 2013-14 legislative session. Under federal law, out-of-state merchants are not required to collect a state’s sales tax on goods they sell to residents unless the remote sellers have a physical presence such as a
“In Michigan, merchant s are entitled to establish their own return policies.” the customer’s purchase was a moment of passion and that after the item had been returned, the member business didn’t really suffer any loss. Fortunately, the member prevailed on appeal. The higher court’s ruling reinforced Michigan’s legal principles. Michigan Law Each day, the retail industry is filled with millions of transactions between merchants and consumers. As a result, retailers and consumers require certainty in order to maintain confidence in the system.
Payment card liability shift Continued from page 7
forced to pay in fees to cancel. I found out during a recent conversation with a merchant that processed about $250,000 per year in volume that its bank told it the cost of getting out of its current contract would be $18,000. These “damages” were calculated on the future volume that the bank would “lose” because of early cancellation. Needless to say, this prevented the merchant from changing relationships. In another conversation, I found out that a merchant was paying $55 a month for a terminal that can be purchased outright for less than $400. The catch was that the merchant was paying $55 per month for 48 months.
That adds up to $2,640. Make sure you do the math. The bottom line is to be sure you understand what you are signing up for, including all of the fees that go along with the not-so-free terminal you get from the vendor. Michigan Retailers Association has published a worksheet that you can use to make sure you ask all of the right questions. This will allow you to accurately compare programs. You can access it in the Credit Card Processing section of www.retailers.com As always, our customer service team is available to help you review any offers or answer any questions.
Gov. Snyder signs the Main Street Fairness bills into law on January 15. Standing, from left: Lt. Gov. Brian Calley, Okemos jeweler and MRA board member Becky Beauchine Kulka, former State Rep. Eileen Kowall, Senate Minority Leader Jim Ananich, Rockford retailer and MRA board member Barb Stein, and MRA President and CEO James P. Hallan. Photo by David Trumpie
Treasury officials also are prepared to conduct reviews or audits of companies that appear not to comply with the new laws. “The new laws changed nexus [physical presence] standards for some sellers, and Treasury is in the process of reaching out to hundreds of businesses, informing them of the statutory changes and alerting them that they may have nexus here in Michigan, as of October 1, 2015,” Stanton said. “While I cannot discuss or disclose the department’s audit parameters and procedures, suffice to say, as we move forward from there, the determination of whether a company has nexus under the new standards, and therefore a potential tax liability to the State, could become cause for a review/audit.” Stanton added that state employees were also working to complete an official Revenue Administrative Bulletin outlining the new nexus standards to ensure sellers are aware of the statutory changes and how Treasury intends to administer them. The bulletin will be posted on Treasury’s website, he said. Expanded Definition MRA had been working for decades to level the playing field for Michigan
store or warehouse in that state. Michigan’s new laws redefine physical presence to include certain practices that out-of-state companies have been using to generates sales in Michigan either online or through phone or catalog sales. These include selling through subsidiaries, affiliate networks or other persons with substantial nexus in the state. Not all out-of-state merchants would be required to collect sales tax, only those that fall under the law’s expanded definition of physical presence. Federal legislation is necessary to require all out-of-state businesses to collect Michigan sales tax. But Gov. Snyder and retailers call the new laws an important step forward for Michigan businesses and the jobs they provide. “This is history-making legislation and a great victory for the home team,” Hallan said at the bill-signing ceremony. MRA board member Barb Stein, of Great Northern Trading Co. in Rockford, added: “It’s not just retail businesses that will benefit from this legislation. We are part of the fabric of our local communities, and our communities and our residents are hurt when we are hurt by unfair competition.”
10
Michigan Retailer
www.retailers.com
Save up to 29% on select FedEx® services. By using our MRA’s discounted shipping program through PartnerShip®, MRA members save up to 29% with FedEx Express®, up to 25% with FedEx Ground® and up to 10% with FedEx Home Delivery® Services. FedEx provides you with the flexibility you need while delivering the top-notch service you demand.
800.366.3699 For eligible FedEx services and rates, contact your association or your freight savings provider, PartnerShip. All FedEx shipments are subject to the applicable FedEx Service Guide or FXF 100 Series Rules Tariff. FedEx service marks used by permission. MRA produced this ad.
October 2015
11
LOTTERY
NEW MEMBERS
Veterans Day 50/50 raffle to help vets and families by M. Scott Bowen, Commissioner One of the questions we hear most often from players is: “When will the Lottery have another raffle?” Since 2006, the Lottery has offered 22 different raffle games. These games have featured different designs and top prize amounts ranging from $56,000 up to nearly $2.5 million. All told, players have purchased more than 11.7 million wagers for these raffle games. To meet the demand from players, the Lottery again will offer a raffle game this fall. Tickets for the Veterans Day 50/50 Raffle went on sale Sept. 28, and we are very excited about the game’s sales potential and that it also will help some brave people, Michigan’s veterans. A portion of proceeds from every ticket sold will go to the National Guard Association of Michigan and support its work to help Michigan veterans and their families. We expect the Veterans Day 50/50 Raffle, and the support it offers Michigan veterans and their families, to be well received by players. Club retailers especially may be interested in this game, and we expect strong sales at veterans’ organizations and other fraternal groups. Players may purchase a single Veterans Day 50/50 Raffle play for $5, five plays for $20, 15 plays for $50, or 40 plays for $100. Tickets for the raffle will be sold until 11:59 p.m. on Veterans Day, Nov. 11. The jackpot drawing will take place on Nov. 12. One lucky player whose number matches in exact order the number drawn by the Lottery wins the huge jackpot. The Veterans Day 50/50 Raffle jackpot will grow with each ticket purchased. Fifty cents of each $1 wagered will be added to the jackpot. Players will be able to check the amount of the steadily growing jackpot by visiting www.michiganlottery.com. In addition to the jackpot drawing, bonus drawings will be held each week, starting October 7 and running through November 4. Each bonus drawing gives players a chance to win $25,000. Players are entered automatically in the bonus drawings when they purchase their tickets. Players will be eligible for bonus drawings after they purchase their Veterans Day 50/50 Raffle tickets. Players who win the bonus drawings still will be eligible for the jackpot drawing.
This will be the third time the Lottery has offered players a 50/50 raffle game. The previous 50/50 raffle games accounted for about 17 percent of all raffle ticket sales and produced top prizes of $1.3 million and $2.5 million. With that track record, we expect the Veterans Day 50/50 Raffle to offer a strong sales opportunity for retailers, create player excitement plus help veterans and their families across Michigan. Instants These new tickets went on sale Sept. 29: IG # 750 - Triple Stars - $3 IG # 742 - Ultimate Millions - $20 This instant game expired Sept. 7 IG # 660 - Cash Multiplier - $5 Pull Tabs These pull tab games expired Sept. 14: MI # 519 - The Golden Ticket - $1 MI # 539 - $10,000 Explosion - $2 MI # 594 - Rollin’ Dice - $.50 This pull tab game expires Oct. 12 MI # 524 - Bar Game Series - $.50 Retailers are reminded to activate all game tickets before putting them on sale to ensure winning tickets may be redeemed by players. About 97 cents of every dollar spent on Lottery tickets is returned to the state in the form of contributions to the state School Aid Fund, prizes to players and commissions to retailers. In the 2014 fiscal year, the Lottery’s contribution to Michigan’s public schools was $742.8 million. Since it began in 1972, the Lottery has contributed nearly $19 billion to education in Michigan. For additional information, follow the Michigan Lottery on Facebook, Instagram, Twitter and online at www.michiganlottery.com.
Looking for the best way to reach retailers in Michigan? Advertise in the Michigan Retailer. Rates as low as $35 per issue.
Call 800.366.3699 for more information.
Alpena Wilbert Vault Co., Alpena 3D Vision Systems LLC, Ann Arbor Seven Eleven #36922, Bay City MacMillan & Associates Inc., Bay City Hillside Furniture Galleries Inc., Bloomfield Hills The City Glass Shop, Cadillac A & W Properties Inc., Cadillac Accents of Home, Caledonia Pizza Girl, Charlevoix Ridge Cider LLC, Conklin Northern Michigan Waterways Hazardous, Custer JJ Cousineau LLC, Decatur Savon Foods Supermarket, Detroit New Providence Ltd., East Lansing JP Heating of Northern MI LLC, Gaylord Aman Park Trail Run, Grand Rapids BUM Run 5K, Grand Rapids Forest Hills Public Schools, Grand Rapids Dream Believe Achieve Triathlon, Grand Rapids Cross Country Team Challenge, Grand Rapids Cookie 5K, Grand Rapids Moonlight Bootlegger 5K, Grand Rapids Insane Inflatable 5K, Grand Rapids GRAAHI Rhythm Run, Grand Rapids Honey Creek Dualthon, Grand Rapids
Turner Concrete LLC, Hemlock Figi Jezi Farm Market LLC, Holland Glenda’s Lakewood Flowers, Holland Jackie’s Place, Holland Four Corners Framing Company LLC, Holland Armstead Automotive Repair & Service Inc., Holly Howell Mobile Inc., Howell Doug & Don’s Auto Care LLC, Hudsonville KI Pizza LLC, Interlochen Rocky Top Beer & BBQ, Jackson T-Shirt Printing Plus Inc., Kalamazoo Twin Lakes Marina Inc., Lewiston Firefly Premier Events LLC, Livonia Lakeside Inn of Ludington, Ludington Perkins Park Campground, Marquette Industrial Metal Sales LLC, Mount Clemens Metropolitan Appliance Service LLC, Muskegon BMI Managed Support Services Inc., New Baltimore Darby Metal Treating Inc., Plainwell Marella & Co., Royal Oak Coty’s Landing, Saginaw Ajee Enterprises Inc., Saint Joseph Kent Equipment, Sparta Amy’s Peppi Pizza, Spring Arbor Kime Collision Corp., Standish M T Legacy, Taylor Nature’s Flame, Webberville
Buy More, Save More! 1 Wager - $5 5 Wagers - 20 $
15 Wagers - $50 40 Wagers - $100
$5,0
00 bonu s comm is to the r etailer w sion ho sells the jackpotwinning ticket!
Odds of winning a Bonus Drawing or the Jackpot Drawing depend on the number of wagers sold by each drawing deadline. If you bet more than you can afford to lose, you’ve got a problem. Call 1-800-270-7117 for confidential help.