April 2013 Michigan Retailer

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Slip into Spring

Retail sales slipped in February and retailers reduced their outlook slightly for the first half of Spring.

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Snap Registration

Data Security

Grand Rapids entrepreneur Wayne Brown has made sophisticated online event registration a snap.

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Here’s the hot retail question: Do you really know if your customers’ information is safe from theft?

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® April 2013 Vol. 38 No. 2

Legislative backers say now is the time to pass Main Street

by Doug Henze State Rep. Eileen Kowall hopes the second time’s the charm in the effort to close tax loopholes that give out-of-state online sellers an unfair advantage over Michigan retail businesses.

The Republican lawmaker’s legislation to require nonM i c h i g a n e-commerce businesses, such as Amazon, to collect the state’s 6 perRep. Eileen Kowall cent sales tax on goods they sell to Michigan residents didn’t make it through the legislature last session.

Rep. Kowall, who represents the House’s 44th District Rep. Rob VerHeulen a n d l i v e s i n w e s t e r n O a kland County’s White Lake Township, has teamed with Rep. Rob VerHeulen, a former mayor in West Michigan, to sponsor the same Main Street Fairness Act this session. The proposed act consists of House Bills 4202 and 4203.

“Our House leadership is more receptive to it this time,” Kowall said.

“I think more people are becoming aware of what an unfair advantage [online retailers] have over our Michigan businesses. It’s part of our House Republican Action Plan to take a hard look at this and, hopefully, get

www.retailers.com

The official publication of the Michigan Retailers Association

MRA launches Buy Nearby campaign An ambitious statewide campaign to encourage consumers to shop at nearby retailers will be launched this spring

by Michigan Retailers Association.

Buy Nearby will be a permanent, year-round, feel-good program designed to promote Michigan retail businesses and communi-

ties, said Thomas Ungrodt, chair of the MRA Board of Directors and president and CEO of Ann Arborbased Ideation.

“We want this to be the start of something big!” said Ungrodt, who also operates gift stores in Ann Arbor and Chelsea.

“We want businesses, communities and shoppers to get excited about the great places and great shops we have in Michigan. We intend Buy Nearby to serve as a personal call to action, a symbol of pride and celebration, a rallying cry across Michigan and an economic driver for our state.”

The campaign will run throughout the year and be “celebrated” annually on the first Saturday in October, similar to the American Express Small Business Saturday on the weekend after Thanksgiving – only larger and more inclusive.

SM

‘Blue-Handed’ On that first October Saturday, advertising and media attention will focus on shoppers visiting nearby communities and retail stores.

Communities, downtowns and retailers will be encouraged to offer s p e c i a l p ro m o t i o n s , events and incentives to make it a big local shopping day.

This year’s celebration, on October 5, will carry the theme “Get Caught Blue-Handed,” a twist on “get caught red-handed.”

“Blue-handed” reflects the blue of the distinctive Buy Nearby logo, which echoes the blue of the Great Lakes that define our state.

“Shoppers will want to be seen and photographed buying at nearby

Continued on page 6

Continued on page 4

Buy Nearby webinar Learn more about Buy Nearby and how you can benefit from the campaign by attending our MRA Member Webinar at 9 a.m. on April 25. You will see

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how to gain access to tools that will help you share in the excitement and generate new sales. Please visit www.retailers.com closer to April 25 for registration information.

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Michigan Retailer

New ways to help retailers succeed

by James P. Hallan, MRA President and Chief Executive Officer As this issue’s Page One story on our new Buy Nearby campaign makes clear, your Association is deeply committed to helping individual Michigan retail and other businesses succeed.

The success of retailers small, medium and large has always been MRA’s mission. But the path to carrying out that mission has gone in exciting new directions over the 73 years of the Association’s existence.

Buy Nearby represents another new direction. MRA plans to use its size, strength and expertise to increase Michigan retail sales by helping drive shoppers into their “nearby” communities and the stores that are located there.

Bold Step Let me explain briefly why this is another bold step.

MRA was formed in 1940 to better represent the interests of the retail in-

Registration In the April 24 session, members can learn: • How to use mobile devices to market your business • Why social and mobile marketing is the most direct and cost-effective way to promote and market your business • How to advertise on Facebook • How to promote a positive online reputation and encourage customers to leave you rave reviews online.

Board of Directors: Thomas Ungrodt Chair Ideation, Ann Arbor

James P. Hallan

President and CEO Michigan Retailers Association

dustry on issues before the Michigan Legislature. In those early years, that was enough.

As the Association grew and matured, it expanded its scope. In addition to providing legislative representation, MRA began providing value-added, cost-saving business services to members, to help them become stronger financially and operationally.

Business insurances, publications, seminars, credit card processing, discounts on shipping and natural gas – the list of membership services has grown dramatically, especially in recent years. All of the services are aimed at strengthening the operations and bottom line of individual businesses.

of that and more. The technological revolution of online shopping also has spurred new efforts to help.

MRA’s board of directors asked, “How can we do even more for Michigan retailers? What can we do to help drive more customers and higher sales to Michigan-based businesses?”

The first big answer: Buy Nearby, a statewide campaign to put more shoppers in your stores and your community.

Please learn all you can about Buy Nearby and participate fully in the campaign. Michigan Retailers Association is starting something new that we expect will grow in excitement and value to retailers and their communities every year. With your support, it will.

Dan Marshall

New Efforts The Michigan economy of the past few years, however, has called for all

Community Focus Buy Nearby is only one of MRA’s new community-focused activities.

Starting last year, MRA initiated a growing list of community meetings – we call them “business tune-ups” – to bring together local retailers to discuss what’s happening in their businesses and their community and to explore how MRA can help.

Look for a postcard invitation or check the calendar on www.retailers. com (under the Education & Events tab at the top of the page) for the first or next get-together in your town.

Credit Card Group

Partner Members In addition, MRA is reaching out to key local business organizations such as chambers of commerce, principal shopping districts and downtown development authorities to add to their business services. The local organization is encouraged to sign up its members as Partner Members of MRA. As a Partner Member, a business gets a number of helpful and informative electronic publications and bulletins from MRA at no cost.

That also makes them aware of the higher-value MRA services that our dues-paying members receive and provides them the opportunity to upgrade their partner status to a regular membership.

We believe that’s a win-win-win situation, because it helps strengthen the local business, the local community and MRA. And strengthening retailers and other local businesses has always been what your Association is all about.

Little Forks Outfitters, Midland

‘Retail University’ offers webinars Three free webinars remain in the “Retail University” 2013 series brought to you by MRA and the national Council of State Retail Associations.

Next up on April 24 is an introduction to mobile and social marketing.

The session is titled “Consumers are mobile and social – are you standing still?” and is presented by Jeff Greer, from Easyfish Marketing.

Easyfish is a digital marketing agency and works with Michigan Retailers Association on the www.retailers. com and www.retailersmutual.com websites.

This is an introductory level webinar to help businesses understand the importance of social media and having a smartphone-friendly website. Greer will host a more advanced webinar on the topic on June 27.

www.retailers.com

Members have a choice of two times for every webinar in the series: 8:30 a.m. ET or 11:30 a.m. ET. In addition, recordings of most past webinars are available to MRA members.

Members can register for a webinar or request a recording of a past webinar by contacting MRA’s Laura Schilling at 800.366.3699 ext. 313 or lschilling@retailers.com.

Shoplifting Following that webinar is a session on helping small retailers prevent losses from shoplifting. The May 21 session, “Shoplifting awareness – a practical and easy guide for preventing loss for small retailers,” is led by Kevin M. Plante, a national leader in the loss prevention industry.

His practical tips range from how to use customer service to discourage theft to how to set up your store so it’s anti-shoplifting.

He’ll also address shopper behavior as an indicator of theft, and what you should do and who can help if you’re having shoplifting problems.

Intermediate Level The final webinar in the series will be held on June 27 and is an intermediate level talk on “How to win over the mobile, connected shopper.” It’s also led by Jeff Greer from Easyfish Marketing.

Vice Chair Marshall Music Company, Lansing

Peter R. Sobelton Treasurer Birmingham

Jean Sarasin

Secretary Michigan Retailers Association

Barb Stein

Past Chair Great Northern Trading Co., Rockford

Brian Ducharme AT&T

Becky Beauchine Kulka

Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos

Orin Mazzoni, Jr.

Orin Jewelers, Garden City

Joseph McCurry Larry Mullins

Brandon Tire & Battery, Ortonville

R.D. (Dan) Musser III

Grand Hotel, Mackinac Island

Joe Swanson Target Corp.

James Walsh

Meijer, Inc., Grand Rapids

D. Larry Sherman

Board Member Emeritus

Michigan Retailers Services, Inc. Board of Directors: Bo Brines Bill Golden

Golden Shoes, Traverse City

Lisa McCalpine-Wittenmyer Walgreens

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.retailersmutual.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.

April 2013

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MICHIGAN RETAIL INDEX

Back to ‘bumpy road’ for retail sales, forecasts year ago February it was 59.3.

The 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 March – May to increase over the same pe-

Current

riod last year, while 8 percent project a decrease and 33 percent no change.

That puts the seasonally adjusted outlook index at 67.3, down from 74.7 in January. A year ago February it stood at 67.9.

The U.S. Commerce Department reported that national sales in February increased 1.1 percent – 0.7 percent excluding autos, gas stations and restaurants.

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11-12

80

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Through February, Michigan sales tax revenues for the year are up 1.1 percent from a year ago.

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.

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Outlook Index

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Michigan retailers’ forecasts for spring sales slipped, following a drop in their February sales, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

February’s sales index number dropped below 50 for the second time in three months, showing that consumers were still adjusting to higher payroll taxes, continued high unemployment and rising gasoline prices.

“February’s fall-off in sales puts Michigan’s retail industry back on a bumpy road,” said Tom Scott, MRA senior vice president. “January gave us a solid jump from a disappointing December, but February sunk to December’s level.”

Most retailers maintained a positive projection for spring sales, but the industry’s overall short-term outlook took a hit in February, falling more than seven points on the index.

The February Michigan Retail Index found that 37 percent of retailers increased sales over the same month last year, while 43 percent recorded declines and 20 percent saw no change. The results create a seasonally adjusted performance index of 46.8, down from 57.9 in January and the lowest February since 2009. A

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)

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Feb

Be sure to complete your online survey each month!

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Michigan Retailer

www.retailers.com

MRA launches Buy Nearby campaign to promote local stores, communities Continued from page 1

stores,” said Barb Stein, chair of the special MRA board committee overseeing development of the campaign.

Stein is owner of Great Northern Trading Co., in Rockford and imme-

winning travel promotion campaign that makes an emotional connection between residents/tourists and the state’s natural and cultural assets.

“We also want to provide more momentum to the movement that’s focusing attention on the importance of supporting Michigan businesses.”

One of the advantages of Buy Nearby, Hallan said, is that it’s meant to support local efforts, not replace them.

“With Buy Nearby, Michigan Retailers Association is bringing its statewide platform and resources to the table in support of what communities and organizations are already doing. We want to be a partner with existing shop-local and buy-Michigan efforts and generate even more attention on the benefits of buying nearby."

The campaign intends to make consumers aware that the benefits of buying nearby include, according to economic studies: • More than 850,000 Michigan jobs are directly dependent on retail sales.

Those jobs are at risk when residents make purchases outside the state.

• For every $100 spent at a local store, $43-$68 goes back into the local economy.

“We intend Buy Nearby to serve as a personal call to ac tion, a symbol of pride and celebration, a rallying cry across Michigan and an economic driver for our state.” diate past chair of the board.

“We’re planning special gift bags, banners, window decorations and other promotional items to make this day a very festive one,” she said.

“It’s going to be a very public way to emphasize the fun, value and importance of buying nearby every day.”

Local Groups “We believe the timing is excellent to launch this type of pro-Michigan, pro-local campaign that complements the efforts of many others across the state,” said James P. Hallan, MRA president and CEO. “We would like to bring a PureMichigan type of emotion to shopping in Michigan and supporting our nearby retailers and communities,” he said, referring to the state’s award-

• For every square foot of retail space, the local economic impact is $105-$179.

Grass Roots The campaign will make heavy use of social media and local, face-to-face marketing. There will be a Buy Nearby website and Facebook page that will enable retailers and shoppers to post comments and find out what’s happening on local shopping scenes.

MRA began getting the word out to communities in late March by approaching leaders of local chambers of commerce, downtown associations, principal shopping districts, downtown development authorities and other groups. Those leaders are asked to become Buy Nearby “ambassadors” and communicate the program to their local businesses.

A webinar is being held for all the ambassadors and prospective ambassadors on April 24.

Retailers will have their own webinar the next day to find out more about how they can participate and the promotional materials that will be available to them.

In addition, MRA is seeking sponsorships to pay for a major advertising campaign to get the word out through radio, television, newspapers and the Internet.

Board Commitment Buy Nearby is the result of MRA board members looking for a dramatic and effective way to help drive more traffic and sales to Michigan retailers, Hallan explained.

“Our mission is to help Michigan retailers and other

businesses succeed,” he said. “We d o t h a t c h i e f l y b y p ro v i d i n g value-added business services, legislative advocacy and information that improves our members’ bottom lines.

“But in this economy, and in this era of technological change that affects how people shop, our board

wanted to come up with a more direct way to help increase retail sales in Michigan.”

MRA hired a Michigan-based marketing communications firm, Bolger and Battle, Inc. in downtown Midland, to help develop and coordinate the campaign.

“This is a campaign that we believe will catch on and grow in scope and value every year,” added Ungrodt.

“Folks throughout Michigan can add their creativity and hard work to Buy Nearby and help make our state an even better place to live, work, play – and shop. That’s our ultimate goal.”

April 2013

5

Young company puts events together in a snap

by Jean B. Eggemeyer

It takes know-how and practice to make complicated processes look easy. Wayne Brown – who has years of experience in banking, marketing and website development – has made sophisticated online event registration, well, a snap.

As president of Grand Rapids-based Snap Registration, Brown has leveraged his skills and harnessed his interest in athletics to build a growing, “go to” company for event management.

“In 1991 I started marketing my own athletic events – 5K runs and triathlons,” said the Grand Rapids native. The young entrepreneur had graduated early from high school with an associate degree from Grand Rapids Community College and founded a business.

His marketing firm, Synergy Marketing Solutions, included designing and programming websites for clients. As his events – and his custom online tools – gained notoriety, several other event planners approached Brown about his methods.

“I saw that there was an opportunity to start a new business,” he said, explaining how Snap Registration came to be.

Major Events Snap Registration has been in operation for seven years and provides services to between 250 and 300 events each year, including the Grand Rapids Triathlon, the Tri del Sol Triathlon and the MI Titanium event.

“Now there are mud runs, warrior dashes and other events that have opened up the field to anyone, whether they’re athletes or not.”

That means the company, even in this down economy, has been enjoying 15 to 25 percent annual growth.

In addition to hosting athletic event registrations, the firm of five also provides online services to arts organizations, associations, fundraising efforts and conferences.

“Compared to two other companies, we liked the generous amount of support Snap offered,” said Snap client Kathi Vande Guchte, Region 6 Emergency Preparedness Conference Planner. “I spent a lot of time on the website…even though I’m technologically challenged, the Snap team was always available to help me.”

Custom Sites Each site that Snap Registration develops is fully customized and branded to the specific event or organization.

“There is no other advertising on the site,” Brown said. “We take privacy very seriously.”

While other event registration host companies collect and sell registrants’ e-mail addresses, Brown says,

Snap Registration will not. tacting several different vendors to competing again soon. In his busy “Some providers sell information keep the work flow on track.” life he relies on Michigan Retailers and all the event participants start Association’s credit card processing hating the spam the site generates,” Credit Cards to take the hassle out of accepting explained Brown. “We get requests The married father of two children payments as event participants regto sell registrants’ information all the calls himself “a triathlete in retireister online. time, but we just don’t do it.” ment” – but promises to resume “Our partnership with MRA is a great Snap Registration is also fit,” he said. “We work with them unique in that it is a full-seron the sites to ensure transactions vice company. In addition to are secure and to work in fraud its online registration techprotection. [Secure payment pronology, Snap of fers print, cessing] is a top-notch service we e-mail and online marketing can provide our clients. assistance, event timing and “Another huge benefit is that photography ser vices, and the partnership gives clients custom-printed promotional fast, direct access to the funds items and gear. their sites generate.”

“Some clients come to us Other event registration pora n d d o n ’ t k n o w w h e re t o tals collect funds under their start,” said Brown. “So we beown names, explained Brown, come their primary marketing and hold the money for a peagent for the event; designriod of time – sometimes two ing and producing brochures, weeks, 30 days, 60 days or even entry forms, signs and banuntil completion of the event – ners. We also have in-house and then disburse it back to screenprinting for promotional event managers. products, medals, t-shirts and Snap Registration, instead, other gear. sweeps collected funds into “Essentially we are a one-stop clients’ bank accounts, directly shop for events.” and with little delay. Event manAs clients take advantage of agers then have cash flow to more services, Snap Registrapay for medals, supplies, staff tion reduces the percentage fee and other expenses. charged per registration.

Brown appreciates MRA’s “Grouping services also leads superior customer service as to more consistent branding,” Wayne Brown's Grand Rapids-based Snap Registration well, pointing to the fact that added Brown. “And clients provides services to many athletic and other events. all he or a client needs to do to Continued on page 9 don’t have to worry about con- Photo by David Trumpie

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Michigan Retailer

www.retailers.com

Legislative backers say now is the time to pass Main Street Continued from page 1

it passed this term. I’ll certainly be pushing for it.”

She said Michigan lawmakers must move forward to enact the legislation as “the only way to guarantee our businesses will have relief.” The U.S. Senate’s favorable action on a March 22 “test vote” on a federal solution is encouraging, she said, but there is no guarantee Congress will actually pass legislation to address the problem, especially as it continues to fight over budget and debt issues.

Distinguished Career For the third-term representative, the fight for sales tax fairness is the latest battle in a career that’s included everything from being a watchdog over funds for colleges and university construction projects to trying to reduce human trafficking.

Kowall, who has served on the House Appropriations Committee and subcommittees including environmental quality, joint capital outlay and general government, recently targeted communities that she believes are diverting tax funds that voters approved for Detroit’s cultural institutions. She has introduced a seven-bill package to prevent local tax increment financing

authorities from “capturing” funds tory approach whenever possible, Kowall when he became a state lawfrom voter-approved local millages she said, recalling how one commaker, offering to sign on to the Main to help support the Detroit Institute missioner wanted to ban trans fats.

Street Fairness package. of Arts and Detroit Zoo. She considered that an overreach by “The local merchants do so much “I feel it’s a matter of public trust,” government. for us – they invest in our commushe said. nities and hire folks,” She also was apVerHeulen said. “Main pointed recently to the Street Fairness is not Michigan Commission going to save a brickson Human Trafficking, and-mor tar retailer which Attorney General that’s not doing what Bill Schuette established the customer wants, to combat the fastbut at least it’s not gogrowing global crimes ing to put them at a of forcing young women disadvantage.” into prostitution, domesA supporter of a freetic servitude and other market approach to forced labor. regulating commerce, A former dental hyVerHeulen says he draws gienist who became the line when some cominterested in politics petitors get an edge by through her involveignoring rules others State Reps. Eileen Kowall and Rob Ver Heulen (right) and MRA President ment as a designer/ and CEO James P. Hallan hold a news conference to announce the have to follow. sales representative for introduction of Main Street Fairness legislation.

“I think it’s importhe family business – tant that government Accurate Woodworking in Waterford “Luckily, we were able to nip it in not allow an unfair advantage, and Township – Kowall cut her teeth in the bud,” she said.

I think this is an unfair advantage,” local politics. She served six years said VerHeulen, pointing to thin retail on the Oakland County Board of Passion for Fairness margins. “I think you just want a level Commissioners before winning elecThe mother of two daughters and playing field.” tion to the state House. wife for 39 years to Michael Kowall On the county board, Kowall’s – a state senator representing the Local Perspective focus was to maintain a nonregula15th District – Eileen Kowall said VerHeulen, who serves on the the Main Street Fairness issue is one House Appropriations Committee she’s extremely passionate about. Ofand Transportation, Community fering a fair price and good service Health, Judiciary and Higher Educaisn’t enough to make local retailers tion subcommittees, aims to bring a competitive if they’re up against a tax local perspective to Lansing. disadvantage, she said.

He said he’s looking for ways to “Retail margins can be quite slim, repair the revenue-sharing system, so how do they compete with that which local units of government [price] disadvantage?” she asked. “I complain has crippled them in recent think they really felt a pinch last holiyears because funds have been kept day season.” at the state level.

Addressing that disparity will be “I want to be supportive of our loanother step in turning around Michcal levels of government,” he said. “I igan’s economy and adding fuel to want to have as much done as close the state’s recovery, she said. That’s to the people as I can.” a key priority for the state legislature.

The father of four adult daugh“I think we did a lot to get Michiters and husband to Norma since gan turned around and moving in the 1975, VerHeulen was in office when right direction last term – more than Walker went through some of its had been done in the last decade,” toughest economic times in recent she said. “I’ve lived in Michigan my memory. Cash-crunched like other whole life. I love this state and want Michigan communities, the city to see it thrive once again.” closed its offices on Fridays and merged dispatch operations with Former Mayor Kent County.

Kowall’s Republican colleague in “We had the ability to raise the millthe Main Street Fairness struggle age, but we thought, ‘Our people are tuned in to the issue well before his struggling, so why raise their taxes?’”

November election to the House from he said. the 74th District.

That mindset will frame his legislaRecently retired after 30 years as a tive style in Lansing as well.

Meijer Inc. attorney and as mayor of “My challenge is to make sure we’re the Grand Rapids suburb of Walker doing everything we can to get the – an office he held from 2001 to 2012 most efficient, responsive govern– VerHeulen remembers merchants in ment we can,” he said.

Rockford voicing concerns about the tax disparity.

Doug Henze is a freelance writer and His interest in local retailers’ former business reporter for the Oakstruggle spurred him to reach out to land Press in Pontiac.

April 2013

7

RETAIL TECHNOLOGY NEWS

Do you really know where your customers’ data are?

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.

Remember the public ser vice announcements of the 1970s and ’80s asking parents, “Do you know where y o u r c h i l d re n are?” As a business owner in today’s dangerous business environment, you should be asking yourself, “Do I know where my customers’ data are?”

I had dinner recently with a colleague who was complaining that while traveling in Florida for business, her primar y card was compromised and the bad guys ran up $31,000 in transactions at various retail locations around the country before anyone noticed “unusual activity.” While I am sure that many people reading this have had a somewhat similar experience, many may not realize how this can happen.

In this case, the victim was an expert in the card-processing arena and was able to zero-in on the point of compromise. She was able to determine that the card data were taken from one of three stores where she purchased something while in Florida.

In each of these three situations the card was out of her possession for a brief period of time. The current thinking from her card issuer is that one merchant’s employee collected her card data (including a mag stripe read) and transmitted that data to a bad guy who cloned her card and used the clone to run the $31,000 in fraudulent transactions.

As a merchant and owner of the business (and the signer on the merchant processing contract with your credit card vendor), you are responsible for the behavior of your employees. If one of your employees is skimming card data, your business (and possibly you) will end up having to deal with the card brands and local, state or federal authorities to resolve this issue.

No one wants to have to post a message on his or her website or

Facebook page like the one I saw recently from a merchant…

“To Our Valued Customers, In reference to the recent news story featuring us…We take our customers’ security and privacy very, very seriously, and have taken action to assure that any wrongdoings done by this person were brought to the attention of the proper authorities…”

Depending on the severity of the breach, this could very well be a lifeending event for your business.

“You should be aware of how your employees handle credit cards and the cards' sensitive data.”

So, what can and should you do?

First, make sure your business is PCI compliant. Fill out the questionnaire at www.compliance101.com/.

Second, as the business owner, you should be aware of how your employees handle consumers’ credit cards and the sensitive data on those cards.

You should not only establish policies that enforce appropriate behavior, you should also perform periodic audits and training sessions.

During an audit, you, as the owner, should “follow” a transaction from the point that a consumer provides card data to one of your employees all the way through to the point that the card data are no longer available to that employee.

Normally, this is during the sales process when a customer hands over the card and it is swiped through the terminal then handed back to the consumer. In some cases you may have more elaborate processes, but each process should be reviewed and have appropriate security policies crafted.

Employees should be advised that theft of credit card data is a crime that is a felony, and if they see suspicious behavior they should report it to the appropriate person.

Please take a minute and consider where your data are – and who in your business has access to that data. It might be an eye-opening and business-saving experience.

8

Michigan Retailer

www.retailers.com

Members give high marks to customer service

by Laura Schilling Michigan Retailers Association has always strived to provide members with expert, personal customer service. That’s why during normal Monday through Friday business hours, MRA's department in Lansing can be heard helping members with credit card processing issues and concerns.

The team of positive, knowledgeable and experienced service representatives is a driving force of the Association and an important point of differentiation between MRA and other processing organizations and businesses.

Satisfaction Surveys As a 27-year MRA employee and manager of the customer service department since 2009, Penny Sierakowski enjoys working with members and making sure her department is providing the best service possible.

“We send out follow-up sur Penny Sierakowski veys on a weekly basis to members who have called

in for help,” said Sierakowski. “We ask people to rate their experience on a one to five rating scale. Our department goal is to achieve a 4.8 or higher average rating at the end of each month.”

The department hit that goal every month except one during 2012, when it recorded 4.66.

If surveys are returned with negative ratings, a follow-up call is made to the member to find out more about the concerns.

concerns and provide the most practical answers.

All of the incoming phone calls to MRA customer service are credit card processing related, with the ma-

for up to an hour in order help the merchant solve the problem. On occasion, these more complicated calls may require the rep to work with the merchant and U.S.-based TransFirst, MRA’s third-par ty administrator that handles after-hours and weekend calls, to resolve the problem.

PCI Compliant C u r r e n t l y, t h e customer service department is working to make members Experience aware of the imporSierakowski notes that tance of being “PCI a negative sur vey is compliant,” which rare, which she credits means meeting the to the outstanding team card payment indusof representatives in the tr y’s data security department. standards to protect The customer service against theft of cusreps have an average ten- Results of MRA customer satisfaction surveys for 2012. Members ranked tomer information. ure of nine years working their overall satisfaction with a recent MRA customer service experience “It is so important in the department, some- on a scale of 0-5, with 5 being the best. for merchants to comthing unheard of in a plete their annual position that normally has a high jority of the calls regarding merchant PCI self-assessment questionnaire to turnover rate. terminal errors or issues that can be ensure they become and remain comThe majority of MRA’s reps have resolved fairly quickly. pliant,” said Sierakowski. “Merchants previous retail experience, which For more in-depth, technical issues, who are not PCI compliant, including Continued on page 9 helps them relate to member representatives may be on the phone

April 2013

9

IT’S THE LAW

Will tax credit hike spur small biz to offer health?

by William J. Hallan, MRA Vice President Government Affairs and General Counsel As the national health care reform law nears the watershed date of January 1, 2014, one of the many big questions is whether increased tax credits will encourage more small businesses to provide health insurance to their employees.

The current small business tax credit rises to 50 percent on that date, and the jury is still out on whether that’s enough incentive to spur many small businesses to offer health coverage to their workers.

President Obama signed the Affordable Care Act (ACA) into law on March 23, 2010, with the purpose of expanding health coverage. Generally, the employer-based requirements of the law go into effect on January 1, 2014.

As far as businesses are concerned, the magic number of the ACA is 50.

If you have 50 or more full-time employees (aggregated part-time employees can count towards the 50 as “equivalents”) you are required to offer health coverage to the full-time employees and their dependents or pay certain taxes if you don’t.

If you’re a small business under the magic number, you’re not required to offer coverage. But if you have fewer than 25 full-time employees (and equivalents) you are eligible for a tax credit to help you pay for their health coverage if you choose to offer that benefit.

Tax Credit Since 2010 The availability of the small business tax credit under the ACA is not new. In fact, it’s been available since 2010. A business is fully eligible for the credit if it employs 10 or fewer

full-time employees with average wages below $25,000.

The credit phases out as the number of employees rises to 25 and average wages grow to $50,000.

The purpose behind the tax credit was to encourage small businesses to offer health coverage to their employees. However, very few of the businesses eligible to claim the credit are taking advantage.

Why is that?

Larger Credit Many, including the Government Accountability Office, say the credit is too small to offset expensive health coverage costs. Generally, the current maximum credit an eligible business could claim is 35 percent of its actual health coverage costs.

Determining eligibility is another problem. The IRS has a worksheet on its website designed to help a business determine eligibility in three simple steps. However, The New York Times reported that it actually took 15 calculations to complete the worksheet.

In addition, due to the phase-out provision, the credit becomes less generous as a business grows and pays its employees more.

On January 1, 2014, the credit increases to a maximum of 50 percent, so the question is whether the increase will be enough to entice small businesses to offer health coverage.

It should be noted that small businesses eligible for this tax credit aren’t penalized by the ACA like large employers, because the ACA does not require businesses with fewer than 50 employees to provide health coverage.

For more information on how to determine eligibility and file Form 8941 to receive the tax credit, visit www.irs. gov or talk with your tax professional.

High marks to customer service Continued from page 8

those who use non-compliant hardware or software, can be fined and are at a much higher risk for a data breach.”

Although MRA provides up to $100,000 in data breach coverage automatically to members who process through the Association, the costs to merchants who have a data breach can exceed $100,000 in some cases.

The PCI questionnaire is avail-

of the job, according to Sierakowski.

“Merchants often call in concerned about their processing rates and the fees they are paying.

By teaching them about what information is needed when processing a card and how they can get the lowest swipe rate, we are helping members save money. In today’s economy, small changes that can

Customer Service Hot Topics PCI Compliance • You must complete an annual PCI self-assessment questionnaire.

The questionnaire is available at www.compliance101.com.

• Control Scan, at 800.571.3928, can assist you with understanding PCI compliance questions, but its reps cannot answer any of the questions for you unless they are familiar with your procedures and equipment.

• You should be sure your hardware and software are PCI compliant. These terminals are no longer compliant: Zon Jr., Tranz, Omni and Hypercom T7P. • Failure to be compliant could able on a link from MRA’s website, at http://www.compliance101.com/.

Members who need help understanding any of the questions should call Control Scan, MRA's partner for PCI compliance, at 800.571.3928.

Card Fraud Credit card fraud is also an increasing concern for merchants, which is why MRA’s customer service reps make it a priority to educate members and make them aware of the risks.

Merchants who believe a transaction may be fraudulent should call customer service at 800.563.5981, select option 4 and ask for a “code 10” authorization.

Sierakowski also reminds members that it’s important to understand that receiving a card authorization only means the funds are available, not that the card being used belongs to the person making the purchase.

Educating members about PCI compliance, fraud awareness and other important processing issues is one of the most rewarding aspects

result in fines, or worse yet, a data breach at your business.

Fraud Awareness • Instances of credit card fraud reported by merchants have been increasing.

• If you are suspicious of a credit card sale, call customer service, select option 4 and ask for a “code 10” authorization.

• If your terminal approves a card, it only means the funds are available. It does not ensure that the person making the purchase is actually the cardholder.

• Never wire money to a customer as part of a sale. Never! add to a business’s bottom line are appreciated.”

Hold Times Customer service works hard to answer calls as quickly as possible throughout the day. Members who are on hold for more than four minutes for a rep in MRA’s department are automatically transferred to TransFirst, which handles overflow calls when needed.

Calling during the morning hours, which tend to be slower than the afternoon, can also decrease the potential wait time.

“Our members’ time is valuable, and I know a downed terminal can cause frustration in their stores, so we work hard to answer calls as quickly and efficiently as possible,” said Sierakowski.

MRA members, through their survey responses, say they appreciate it.

Laura Schilling is MRA communications assistant and Retailers Mutual Insurance Company associate underwriter.

Company puts events together in a snap Continued from page 5

resolve a problem or find an answer is pick up the phone.

“There are a lot of companies out there doing bankcard processing, trying to lure customers in with teaser rates,” he said. “But in those situations, there is always a ‘gotcha’

somewhere in the fine print.

“That professional, personal touch is important in everything we do,” he said.

Jean B. Eggemeyer is a freelance writer, small business owner and former Michigan Retailers Association employee.

10

Michigan Retailer

www.retailers.com

LOTTERY

New $20 Instant tickets proving popular with customers

by M. Scott Bowen, Commissioner

The facts and figures are in and it’s official – $20 Instant tickets are one hot commodity!

Since October 1, 2012, $20 Instant game sales, which account for over 10 percent of total Instant sales, are up a whopping 35 percent over last year.

On March 4 we launched our newest $20 ticket, Diamond Payout™ (IG #650). Diamond Payout™ is a one-ofa-kind instant game and will surely catch the attention of your players with the highest prize payout ever seen on a Michigan Lottery Instant game. It features: • Three top prizes of $1,000,000 • Over $50,000,000 in total prizes • Over 200,000 prizes from $100

to $5,000.

T h e L o t t e r y ’s $ 2 0 p o r t f o l i o also includes $50,000,000 Cash Spectacular™ (IG #488) and $1,000,000 Winner™ (IG #615).

Together, these games have over $40,000,000 in total cash prizes still

available, including four $1,000,000 top prizes.

In order to take advantage of this hot-selling season, be sure to keep your $20 games fully stocked and promoted. If you have questions, talk with your Lottery sales rep. He or she is there to help.

your Lottery patrons to play the All New Cash for Life Instant games and you’re sure to see your inventory fly off the shelves.

As with the $20 Instants, if you need additional information about Cash for Life or other games, talk to your Lotter y representative!

Cash for Life The Cash for Life Instant games were a critical part of our success last year, accounting for 24 percent of total Instant game sales. On April 2 we introduced the All New Cash for Life family of games.

Here are the enhancements we’ve made to the series: • New ticket design • More top “LIFE” prizes The $1 ticket - FOUR “$400 a week for life” top prizes The $2 ticket - FOUR “$800 a week for life” top prizes The $5 ticket - THREE “$2,000 a week for life” top prizes The $10 ticket - THREE “$4,000 a week for life” top prizes • Higher prize payout • Better overall odds.

With these fun details, encourage

Mobile App The Michigan Lottery’s all new mobile app (available for the iPhone and iPad, as well as Android based smartphones and tablets) has a completely new look and includes many new features players have requested.

New features include the ability to scan non-winning draw game tickets into the Player’s Club, reward catalog access and a retailer finder. In addition to the great new features, players will still be able to view winning numbers, see the latest jackpots, play Club Keno “To Go” and more.

˚

˚ ˚ ˚

Tax-Free Raffle Sales of the $10 all-new $40,000 TaxFree Raffle tickets are going on now at all Michigan Lottery retailers.

The top prizewinners will walk away with $40,000 – tax free! This raffle has the best overall odds of any raffle to date – 1 in 6 tickets will win a prize.

On April 15, Tax Day, a drawing will be conducted to select the winning raffle numbers. For every 30,000 raffle tickets sold, 5,001 prizes will be awarded: one $40,000 top prize, 50 prizes of $100, 1,850 prizes of $50, and 3,100 prizes of $15.

Remember, time is limited to purchase tickets, so be sure to let your customers know they have to act fast in order to be part of the raffle action.

Over 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 fiscal year 2012, the contribution to schools was a record $778.4 million. Since its inception in 1972, the Lottery has contributed over $17 billion to education in Michigan.

For additional information, please visit the Lotter y’s Website at www. michiganlottery.com.

Offer Gift Cards, Increase Sales.

Gift Card

Advantages

Increased Sales Upscale Image Simple Setup Greater Security Return Visits Automatic Balance Easy Processing Low Costs Reusable Give yourself and your customers the

Gift of Choice!

800.366.3699 www.retailers.com

RETAILERS

Last year, the Cash For Life series of tickets accounted for 24% of all Michigan Lottery instant game sales. Cash For Life is back with a new look, better overall odds of winning, and over $126 million in total cash prizes. Four different tickets with chances to win up to $4,000 a week for life. Be sure to keep Cash For Life in stock and on display so your players have a chance to turn an instant into a lifetime!

Top prize Cash For LifeŽ winners will receive their prize payments in annual installments over their lifetime or over 20 years, whichever is greater, unless within 60 days from the date they claim their prize, they request the Cash Option method of payment. Overall odds of winning $1 Cash For Life: 1 in 4.53. Overall odds of winning $2 Cash For Life: 1 in 4.25. Overall odds of winning $5 Cash For Life: 1 in 4.03. Overall odds of winning $10 Cash For Life: 1 in 3.89. If you bet more than you can afford to lose, you’ve got a problem. Call 1-800-270-7117 for confidential help.