The contest for our MRA Foundation scholarships kicks off Jan. 1, and this year, the number of scholarships will increase. Page 3
Sexual harassment policies
Sensitivities around sexual harassment are higher than ever. Looking for guidance? Check out MRA’s policy Page 4
Should you create an Instagram account for your business? These statistics will help you decide. Page 6
® December 2017 Vol. 42 No. 6
The official publication of Michigan Retailers Association
Have you experienced organized retail crime? You’re not alone
keep retail stores on the first floors of their buildings? And is that even desirable? Birmingham, a wealthy Detroit suburb, is attempting to answer those questions.
Retail loss prevention employees say organized retail crime is increasing, and even more worrisome, violence by such criminals is becoming more common as well. The National Retail Federation’s 13th annual survey on organized retail crime (ORC) showed that 96 percent of responding retailers were victims in the past year. Of those, 67 percent said they saw an increase in their stores compared to 2016. More than 25 percent reported that violent behavior was involved – either against a store employee or even shoppers. Losses averaged $726,351 per $1 billion in sales, up from $700,259 last year. “Successful prevention of ORC requires coordination between law enforcement, the retail industry and prosecutors,” said William Hallan, MRA’s executive vice president and a member of the Michigan ORC Advisory Board, appointed by Gov. Rick Snyder. “To aid in that coordination, the board developed an interactive
Continued on page 2
Continued on page 11
Downtown Birmingham restricts personal service businesses that can occupy first floors, as a way to accommodate more retail.
Downtowns strive to keep retail on 1st floors By Rick Haglund Retail stores have longed served as the indispensable core of downtowns. But as online shopping grows and brick-and-mortar stores close in an over-retailed environment, community leaders are trying to figure out how
to keep their downtowns thriving. Many believe that a strong mix of retail stores on the first floor of buildings is essential to maintaining foot traffic in downtowns and neighborhood shopping areas. But can cities force landlords to
Michigan Grocers Association picks 2 grocers for MRA boards As the Michigan Grocers Association joins forces with the Michigan Retailers Association, two current members of the MGA Board of Directors will serve in a leadership capacity with the Retailers Association. Effective January 1, 2018: • MGA Treasurer Bryan Neiman, N e i m a n ’s F a m i l y M a r k e t , will serve on the Michigan Retailers Association Board of Directors and Legislative Committee.
• MGA Director John Leppink, Leppink’s Food Centers, will serve on the Michigan Retailers Services, Inc. (MRS) Board and the Audit Committee. MRS is the wholly owned subsidiary of MRA that provides a wide-array of profit-boosting membership services to association members. “We’re delighted to have Bryan and John join our boards of directors,” said Jim Hallan, MRA President and CEO.
“Their breadth of experience will be invaluable in helping us strengthen our organization and understand the challenges of grocers in this everevolving world of retail.” Neiman is President and CEO of Neiman’s Family Market, with four locations in Alpena, Tawas, St. Clair and Clarkston. His parents, Hal and Jean Neiman, founded the company in 1983 by opening the Alpena IGA store, which later became Neiman’s Family Market. This coming year will mark 35
years as a growing, successful family business. The St. Clair store is currently undergoing a $2 million upgrade. Joining his family’s business in 2007 as a Store Director, Neiman previously worked for The Fresh Market in North Carolina and Indiana. He holds a bachelor’s degree in organizational communications from Capital University. “My goal in serving on the MRA board is to represent grocery retailers by sharing my retail food industry Continued on page 8
Making retail work in January Page 5
Board of Directors: Orin Mazzoni, Jr.
Chair Orin Jewelers, Garden City
by James P. Hallan, MRA President and Chief Executive Officer By the time the Retailer gets to you, it will be somewhere between Thanksgiving and Christmas. That means it’s crunch time for everyone. The days are long, fun and always a bit stressful. Customers can be pleasant or a bit demanding. Time is at a premium. Our holiday forecast in conjunction with the Federal Reserve shows optimism among the membership. Economic indicators and consumer confidence are strong, and we are hopeful everyone has sizzling sales and a safe holiday season.
also say goodbye to board member Brian DuCharme, who has retired from AT&T mobility, and now calls sunny Naples his new home. DuCharme Brian was a terrific, engaging and thoughtful board member who always saw the big picture. We wish him the best in his well deserved retirement.
New board members With the January 1 affiliation of the Michigan Grocers Association, Michigan Retailers will be adding two new board members representing the grocery industry. We’re pleased to welcome John Leppink, Leppink’s Food Centers based in Belding and Bryan Neiman, Neiman’s Family Market based in East China Township to our governance team. Both operate multiple locations and we look forward to adding their expertise to our growing organization. You can read more about them on the front page of this Retailer. While we welcome new board members, we
Membership Seventy-eight years ago Michigan Retailers was formed to represent the retail community. With your support, MRA has now become the largest state retail association in the country. Many members still have a common January 1 renewal date while newer members have renewal dates based on their anniversary date of when they joined our organization. Many thanks to those of you who have already renewed your membership, and for those who will be receiving a January membership invoice we appreciate your favorable consideration.
March of time I had some minor surgery a few weeks ago on my right foot that is reflective of an aging body. The surgery went fine, but my driving privileges have been curtailed for six weeks so I’ve been reliant on others to get to and from work. A special thanks to my wife, Beth, for handling the bulk of the chauffeuring duties. We shall both be relieved when my freedom is returned. Special thanks to DTE Five years ago we launched the Buy Nearby program encouraging customers to keep dollars in the mitten. Ever since our launch, DTE has been a major sponsor of our Buy Nearby program and we are pleased to report that they agreed to continue their major sponsorship in 2018. All of us at MRA, and especially the Buy Nearby Guy, tip our hat to DTE and are very appreciative of their support to our campaign. Merry Christmas and Happy Holidays From your Lansing-based “world headquarters,” we send you our best wishes for joyous holidays and blessings for peace and prosperity in the New Year.
Downtowns strive to keep retail on 1st floors Continued from page 1
The Birmingham City Commission in mid-November passed an ordinance limiting the kinds of personal service businesses that can occupy first floors in the downtown business district. Personal services have long been allowed downtown, but were never clearly defined. In recent years, various kinds of offices, such as real estate and advertising that stretched the definition of personal services began replacing closed retail stores. The new ordinance, which drew from 20 similar ordinances by cities around the country, allows personal services such as salons and shoe repair on the first floors of downtown buildings. But business-to-business services and medical offices are prohibited. A group of landlords has threatened to sue to overturn the ordinance. One West Michigan developerlandlord and a nationally prominent urban planner say such restrictions are a mistake. Sam Cummings, a managing partner of CWD Real Estate Investment in
Grand Rapids, said in a perfect world, he’d enact a first-floor retail requirement. “But you can’t make a retailer successful by making the property owner require retail.” Planner Robert Gibbs said he used to require first-floor retail in his master plans for urban developments, but has changed his thinking on that issue. “It’s a burden on property owners,” said Gibbs, president of the Gibbs Planning Group, located on the second floor of a downtown Birmingham building. “It results in mediocre retail just to fill vacancies. It forces the market.” Buildings should be designed with flexibility to accommodate whatever use the market indicates, Gibbs said. His master plans now call for at least 12-foot-high ceilings and glass fronts on the first floors of commercial buildings, making them friendly to retail uses. “Most retailers need high ceilings,” he said. “It makes the space seem airier and the research shows customers stay longer. If the ceiling is too low, it seems claustrophobic.”
Retailing needs to provide shoppers with an experience as well as products, said Cummings, whose company has developed more than three million square feet of retail and office space in West Michigan. He pointed to retailers like Sur La Table, Orvis and Lululemon that offer classes in their stores to complement their retail offerings. “A lot of our tenants use their brickand-mortar stores for experiences as much as they do selling goods,” Cummings said. Gibbs and Cummings agree that a “critical mass” of retailers is needed for downtowns to remain viable. That means about 100,000 square feet of retail for a city of 20,000 people, Gibbs said. “We must have retail downtown,” said Pierre Boutros, a Birmingham city commissioner who voted against the personal services ordinance because he wanted more study on the issue. “The question is how we do it. It could have a huge impact on the city.”
James P. Hallan
President and CEO Michigan Retailers Association
Becky Beauchine Kulka
Vice Chair Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos
Peter R. Sobelton
Treasurer Mondial Properties, Birmingham
William J. Hallan
Executive Vice President Michigan Retailers Association
Past Chair Marshall Music Company, Lansing
Brian Ducharme AT&T Mobility
Grand Hotel, Mackinac Island
Credit Card Group
Brandon Tire & Auto Service Center, Ortonville
Great Northern Trading Co., Rockford
Joe Swanson Target Corp.
TDU Consulting, LLC, Ann Arbor
Meijer, Inc., Grand Rapids
D. Larry Sherman
Board Member Emeritus
Michigan Retailers Services, Inc. Board of Directors: Chad Ayers Allendale True Value, Allendale
Little Forks Outfitters, Midland
Golden Shoes, Traverse City
James P. Hallan Meegan Holland Publisher
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
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 Association 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.
Help support the Retail Index Survey
MRA scholarship contest begins Jan. 1
80 70 60 50 40 30
One of MRA’s crucial tools in promoting retailer interests in the media and beyond – the monthly Retail Index – has been teetering due to lack of participation. We need you to participate and here’s why. For several years, MRA has been the only state association in our region to help the Federal Reserve Bank of Chicago on the Index, which it uses as a key indicator used in its economic reporting. At MRA, the majority of our media calls involve the monthly Index. TV, radio and print reporters love to find out what retailers are thinking. If you’re a retail member of MRA, you likely get emails every month asking you to take the survey. It takes only 10 minutes, but the impact is incalculable. But for the last couple years we’ve seen a drop in participation, which could put the Index results in peril. Regional Federal Reserve officials meet with business people across Michigan to present its economic forecast and to hear from participants about what they’re seeing in the field. MRA attends those meetings and reports on what we hear from you, the retailer, through the Index. We want to make sure you’re heard! That’s why the survey is a crucial tool for us to help you – and the Federal Reserve – get an accurate picture of where retailing is now, and what your expectations are. Especially in January, when you get the survey
for your December results, we’d be most appreciative if you took the time to fill out the results of your holiday season sales. This will be a media story and of keen interest to Federal Reserve economists. The next time you get that Retail Index email from us, please open it and take part in the survey. Your voice deserves to be heard, and it will have an impact! If you have any suggestions on how we might improve upon the Index, please contact Meegan Holland at email@example.com or at 800-3663699 ext. 340.
Michigan Retailers Association’s annual competition for college and training scholarships begins Jan. 1. Applications will be accepted through April 2 for 19 one-year scholarships for the 2018-19 academic year. Those eligible to apply are high school seniors and college freshman, sophomores and juniors who are dependent sons and daughters of owners or full-time employees of MRA’s nearly 5,000 member businesses. Part-time employees who are full-time students are also eligible. Scholarships range from $1,000 to $2,000. With the addition of the Michigan Grocers Association on Jan. 1, the Paul M. Felice Memorial Scholarships will be given to employees or independent children of employees who work at MGA member businesses. The scholarship program is funded by the Michigan Retailers Foundation. Students can apply online at MRA’s website, www.retailers.com (under the Member Benefits/ Scholarship Program pulldown at the top of the homepage). Students may also contact MRA’s Rachel Schrauben at 800.366.3699 or rschrauben@ retailers.com to request an application by mail or to check eligibility. Recipients are selected for their above-average academic performance and extracurricular activities, which can include part-time employment. Financial need is not a consideration. As of 1999, 511 scholarships have been awarded, totaling more than $484,000.
IT’S THE LAW
Don’t have a sexual harassment policy? Here’s what MRA uses By William J. Hallan, MRA Executive Vice President, COO and General Counsel Har vey Wein stein, Kevin S p a c e y, B e n Affleck, Bill O’Reilly, Charlie Rose and Matt Lauer. Need I go on? It’s easy to cast the issue aside as a product of the Hollywood culture. The sort of thing that’s caused by those in Los Angeles or New York that are used to getting away with sexual harassment. But the reality is that such incidents can occur at any workplace and the indiscretions of others serve as helpful reminders for retailers. As an employer, you should be thinking about harassment, whether sexual or otherwise. To make it easy for you, I’ve included below the exact language of MRA’s AntiDiscrimination and Anti-Harassment Policy. We encourage you to work
with your legal counsel to develop your own policy.
MRA Anti-Discrimination and Anti-Harassment Policy
Michigan Retailers is committed to encouraging and sustaining a work environment that is free from discrimination and harassment. Michigan Retailers prohibits discrimination on the basis of race, color, religion, national origin, disability, veteran status, sexual orientation, gender identity, sex, genetic information, disability or age. Michigan Retailers also does not tolerate harassment of any kind. Sexual harassment and sexual misconduct are forms of sex discrimination and a prohibited by Michigan Retailers. Harassment occurs when: • There is conduct that, because of its severity and/or persistence, interferes significantly
with an individual’s work, or adversely affects an individual’s working conditions; or • A person uses a position of authority to engage in unwelcome sexual advances, requests for sexual favors, or other conduct of a sexual nature. Michigan Retailers prohibits retaliation against you for reporting a concern, filing a complaint, or participating in the investigation of harassment. Please see our Anti-Retaliation Policy for further information. The conduct that is complained about is evaluated from the perspective of a reasonable person similarly situated to the person complaining and in consideration of the context of the behavior. You should also know that harassment is distinguished from behavior that, even though unpleasant or disconcerting, is appropriate to
the carrying out of certain instructional, advisory or supervisory responsibilities. Michigan Retailers prohibits discrimination and provides equal employment opportunities without regard to race, color, religion, national origin, disability, veteran status, sexual orientation, gender identity, sex or age. These demographic traits are commonly referred to as protected classes. Prohibited discrimination occurs when you are subjected to an adverse employment action based upon one or more of the protected classes above. If you think you have been harassed, discriminated against, or if you have any questions about this anti-discrimination and anti-harassment policy, you should contact Michigan Retailers’ General Counsel, Manager of Human Resources or its President and CEO.
What’s Happening 2018 gift shows are taking reservations
OSHA’s Top 10 most cited violations for 2017
Travel Michigan launches winter advertising
Following the hustle and bustle of the holiday season, retailers have a chance to breathe, rethink their strategy for next year and start planning for the year ahead. One way to do something different in 2018 is to attend a nearby gift show. Michigan hosts many gift shows perfect to see what other goods you could place on your store’s shelves. Some of Michigan’s gift shows include: Lansing Gift Show, located at the Lansing Center on March 4-6. More information on how to sign-up can be found: http://lansinggiftshow.com/ Petoskey Gift, Gourmet and Souvenir Show, located at North Central Michigan College on April 21-23. More information can be found: http://www.petoskeygiftshow.com/ Northern Michigan Gift & Souvenir Show, located at Boyne Highlands Resort on April 22-24. More information can be found: http://www.nmgiftshow.com/ Michigan Retailers Association will have a booth at the Lansing and Northern Michigan Gift Shows and Buy Nearby Guy will make an appearance at the Lansing Gift Show on Sunday, March 4.
OSHA released its 2017 Top 10 cited violations. While the list didn’t change much from 2016, OSHA officials say the violations are easily fixable. “The OSHA Top 10 is more than just a list, it is a blueprint for keeping workers safe,” National Safety Council President and CEO Deborah A.P. Hersman said in a press release. “When we all work together to address hazards, we can (help) ensure employees go home safely each day.” For the second year in a row, “Fall Protection” led as the most common employer violation. 1. Fall Protection – General Requirements (1926.501): 6,072 violations 2. Hazard Communication (1910.1200): 4,176 3. Scaffolding (1926.451): 3,288 4. Respiratory Protection (1910.134): 3,097 5. Lockout/Tagout (1910.147): 2,877 6. Ladders (1926.1053): 2,241 7. Powered Industrial Trucks (1910.178): 2,162 8. Machine Guarding (1910.212): 1,933 9. Fall Protection – Training Requirements: 1,523 10. Electrical – Wiring Methods (1910.305): 1,405
Travel Michigan launched its regional winter advertising campaign in November. Travelers in key markets across the Great Lakes region are hearing about Pure Michigan on TV and radio through the holiday season. Digital ads have been running since Nov. 1. “We embrace winter, and the travel opportunities it brings, here in Pure Michigan and this campaign is designed to inspire winter getaways to Michigan this season,” said Dave Lorenz, Vice President of Travel Michigan, which is part of the Michigan Economic Development Corporation. Last year, visitors spent nearly $3.9 billion on leisure travel during the winter, highlighting the economic importance of the season. “Our winter advertising efforts are aimed at inspiring travel to Michigan from the region that will result in overnight stays and getaways,” Lorenz said. “In addition to the advertising campaign we utilize social media, our seasonal travel guides, the michigan.org website and our consumer enewsletter to provide ideas and planning tools to turn that inspiration into a trip.”
RETAIL TECHNOLOGY NEWS
Credit card signatures may go by the wayside as technology marches on By John Mayleben
Making retail work in January
This is the month consumers make large purchases – cars, appliances, furniture, electronics (especially big-screen TVs). But what about the rest? Here’s how to survive January.
Catch consumers at every price point
and possibly a little lower than your norm to get a few additional sales.
Don’t put everything on sale
instead provide a fresh showcase for what you want to sell – items that have languished in your inventory.
Give thanks to those who have already shopped at your store
Offer an incentive to return to your store - a customer appreciation sale, a special event or a coupon.
Stand out from your competition
through visual displays, product assortment, customer service or special events. Customers who shop local notice these touches.
Consider new selling strategies
- at local markets, cross selling with other boutiques, swapping stale merchandise or selling online. Source: Retailminded.com
A recent MasterCard announcement makes me wonder how we would have presented and signed the Declaration of Independence on July 4 th 2018 as th compared to July 4 , 1776. MasterCard has announced that they will, effective April 2018, no longer require a cardholder’s signature at checkout. This is for any purchases by credit or signature debit (the version that doesn’t use a PIN number now) in the US or Canada. That’s right: No signature will be needed to argue a chargeback or customer dispute. Today, more than 80 percent of instore transactions are exempt from the signature requirement. This change simply moves the line a little further. The goal is to streamline and speed up the checkout experience for the consumers. This change is the result of years of development of newer technologies that prevent or at least minimize fraud. As most of the cards now have EMV chips and more merchants are migrating their POS systems to Point to Point Encryption (P2PE) solutions, MasterCard is seeing fewer situations where the old-fashioned signature comparison would have stopped a fraudulent transaction. As most cardholders and merchants have already experienced, the networks check many different data-points to determine if they
should provide an approval code. It is no longer just “Is the credit limit big enough?” Location, time of day, business SIC code, size of purchase, all play an active role in the approval process. Add to that, most card issuers, today, offer email or text alerts for some/all of your transactions, thereby shortening, even more, the time that a bad guy has to use your card information. All of these evolutions in the business, that started with imprinters (knucklebusters), carbon slips, and newsprint “warning bulletins”, have allowed MasterCard to retire the signature. It will be interesting to see if the other card brands follow suit. While we, as merchants, think of Visa, MasterCard, Discover and American Express as one big payment experience, they are separate networks with different rules and policies. If they don’t follow suit, it will be challenging implementing a no signature solution just for MasterCard. Training cashiers could prove problematic and accidently create a liability for you, as the merchant, if they don’t get a signature on one of the other network transactions. Time will tell if the others follow suit. Maybe the next generation of consumers won’t even know why us “old folks” refer to your signature as a “John Hancock”… Hint, he was the first guy to sign the Declaration of Independence in 1776… John Mayleben, one of the nation’s first Certified Payments Professionals designated by the Electronic Transaction Association, is an MRA consultant and naitonal expert on payment processing.
Hardware stores can capitalize on winter weather Wintry weather is just starting and while many retailers can use weather to drive sales, hardware stores are in a unique position to do so. Thirty percent of consumer-buying patterns are influenced by weather conditions, according to RetailWire. And now that meteorologists are getting better at forecasting major weather events, retailers can use weather to drive sales. Use social media to suggest items that customers may want to purchase before the weather hits. Load up an endcap with storm-related items near the door. The North American Retail Hardware Association suggests stocking these items: • Winter items: Snowblowers, ice melt, shovels, firewood, space heaters, generators, sleds, handwarmers, batteries, flashlights,
chainsaws and regular saws for fallen tree branches (nonelectric). • Food: Bottled water, ready-to-eat canned meats, fruits and vegetables; high-energy foods like peanut butter and granola bars; comfort/stress foods like cookies, instant coffee and hard candy • First aid supplies: Gauze, bandages, thermometer, soap, latex gloves, aspirin and other nonprescription drugs. • Clothing, bedding and sanitation supplies: Blankets or sleeping bags, disinfectant, bucket, plastic garbage bags, household chlorine bleach. • Tools: Utility knife, pliers, signal flares, whistles, fire extinguishers. • Enter tainment: Games and books.
Tax reform puzzle: Proposals may be good fit for retailers By Amy Drumm, MRA Vice President, Government Affairs Retailers who file their business broadening the tax base and lowering taxes separate from their personal the corporate tax rate would increase income taxes, could see a significant gross domestic product (GDP), wages reduction in the amount of taxes and consumer spending. they pay if either of the two tax reform plans working their way through Congress are signed into law. That’s because retailers do not benefit from many of the tax breaks and loopholes available to other industries. Examples of these credits include research and experimentation credits used by engineering and technology firms, credits for low-income housing investments, and a deduction for doSole proprietors and LLCs that remestic manufacturing. port profits on personal income tax In fact, retailers pay the highest returns would see some tax relief. effective corporate tax rate – at or Most businesses are set up as “passclose to the maximum 35 percent. throughs,” not corporations. For Both congressional tax reform plans these “pass-through businesses,” inwould cut the maximum corporate stead of being taxed at the individual rate from 35 percent to 20 percent. rate for business profits, which can The House would cut the corporate be as high as 39.6 percent, the House tax rate to 10 percent beginning in plan would charge a 25 percent rate 2018 while the Senate plan would not on business profits (17.4 percent rate go into effect until 2019. under the Senate plan). The National Retail Federation In addition, the federal tax reform (NRF) found that reducing the corplans would allow immediate deducporate tax rate to 20 percent could tions for business investments rather create 500,000-1.5 million jobs. than spreading the deduction over Studies by the Joint Commission multiple years. The plans also mainon Taxation and Ernst and Young tain the deductions for interest paid (conducted for NRF) also found that on small business loans that allow for
Retailers pay the highest effective corporate tax rate - about 35 percent. Tax reform is expected to cut that rate.
expansion, investment and hiring. The congressional plans also would adjust personal income tax rates and deductions which may provide individuals and families some tax relief. Both plans call for a nearly doubling of the standard deductions while reducing or eliminating certain itemized exemptions. You might be tempted to call it a simplification, but the House bill is still 429 pages long. There’s debate over the impact to the national debt from these reforms. Proposed deficits under current law project a $10.1 trillion-dollar deficit over the next 10 years. Legislative supporters of the reforms claim they will pay for themselves. But economists greatly disagree on how much the increased economic activity will cover of the $1.5 trillion-dollar cost. Before you start mentally spending those extra dollars, remember that Federal tax reform isn’t a guarantee. While this is the farthest a plan has come to becoming reality and business associations are more optimistic, Congress is at best, only about half way through the process. And the really hard part starts once each chamber passes its own version of reforms and they must agree on a final compromise bill. Let’s not
forget that the president has the final say in signing or vetoing a bill, IF one reaches his desk. That’s where you can get involved. Write or call your congressman and Michigan’s U.S. Senators, Debbie Stabenow and Gary Peters. Encourage them to support tax reform that aligns with changes that would benefit both retailers and consumers as outlined by the National Retail Federation: - Reforms should cut business tax rates and close loopholes that only benefit some industries over others. - Reforms should not favor one type of business over another based on their legal entity (C corporation vs. pass-through), how they own their property (leased vs. owned), or distribution channel (brick and mortar vs. remote sale). - Tax reform should not include a consumption tax (like the border adjustability tax proposed earlier this year or a national sales tax). - Reforms should provide long-term certainty rather than temporary deductions. - Reforms should include adequate transition rules to ensure businesses are not penalized by investment decisions made in years prior to the reform’s passage.
A SNAPSHOT OF INSTAGRAM USERS
Of all adult online users, 32 percent are on Instagram. These numbers will help you decide whether your business should be on it as well. Source: Pew Research Center
of online women
of online men
of online adults age 18-29.
of online adults age 30-49.
of online adults earning $50K-$74,999
of online adults earning $75,000+
of online adults living in urban/suburban areas
GOVERNMENT AFFAIRS NEWS
How well should you know your legislators? By Amy Drumm, MRA Vice President, Government Affairs Every two years a shift happens in Lansing. Sometimes it is a big shift and at other times it is hardly noticeable. Next year, the entire legislature, all 148 seats, will be on the ballot. 64 seats, or 43 percent, will be filled with new faces beginning in 2019. How many of them will know what matters to retailers like you? That is why this is a great time to review the importance of getting involved in the legislative and election process, building relationships with your legislators and candidates, and even consider the possibility of running for office yourself. While MRA is busy building and nurturing relationships at the Capitol every day, this work does not only occur in Lansing. In fact, it is often more important for you, as a business owner in their community, to establish strong relationships with the elected officials who represent your business interests. Educating legislators and community leaders is a critically important step in the legislative process – one that should not be taken for granted or put off until the last minute. A lawmaker who has spoken to his or her local retailer or business owner and knows the concerns and interests of the community is much more likely to be helpful when issues arise in Lansing. If engaging lawmakers is unfamiliar or new, consider this as an opportunity for an investment that protects your business. Do not be intimidated to talk to legislators. Invite them to your business, ask them about their priorities, share with them the challenges that current or proposed regulations pose for your business, employees and family. Lawmakers want to hear your business’ story in order to better understand the businesses, communities and people they represent. It’s a win-win for both parties. Making your voice heard is not difficult and should not be time consuming. Let’s break down the steps: Step one: Know what is going on in Lansing. MRA members are already a step ahead because you get our regular legislative updates, but it’s also important to hear directly from your representatives. Learn who your legislators are and get on their mailing lists. Most legislators send out an electronic newsletter to keep their constituents updated. Make
sure you’re on that list. To find out who your legislators are, go to www.house. mi.gov and www.senate. michigan.gov and click on the link to find your representative/senator. After entering your address it will give you your legislator’s name and contact information. Step two: Share your story and opinion. This can be as simple as writing an email, a letter to the editor, a Facebook post or a tweet. Those can all be done any day at any hour. Step three: Develop a relationship with your legislators and candidates for office. Attend their office hours, invite them to your business or a coffee hour with your employees, or schedule a visit to their office in Lansing. If you’re comfortable doing Michigan Rep. Frank Liberati (D-Allen Park) is surrounded by family at their deli and bakery. so, consider attending a Liberati is one of the few retailers in this Legislature. fundraiser. With term limits, legislators can only serve six years in the Michigan House of Representatives and eight years in the Michigan Senate. With elections every 2-4 years, they need your support to stay in office. Few legislators enjoy having to raise money or ask for help for a campaign. They remember everyone who chips in time and resources. Step four: Be your own advocate. Consider running for office yourself – or encourage another retailer to run. Ok, I know this is not for everyone, but give it serious consideration! No one knows your business and the challenges you face better than you. Who could possibly be a better representative than one of your fellow business owners? (Considering running for office and have questions on the process? I’m happy to provide information; reach me at firstname.lastname@example.org) Being proactive by getting to know legislators and candidates can prevent a number of headaches for you and your business. Turning your legislator into an advocate ensures that Rates will decrease up to 6 percent, thanks to the positive there is always someone asking the performance of our program. Enroll between Nov. 1-Dec. 15. important questions when legislation that could impact your livelihood is Call Ally Nemetz: ext. 350 considered. Adminstered by Delta Dental. Building relationships with legislators and community leaders is the best way to protect your business and its continued success from potential government overreach. It is also the best way to address prob1017 lems and concerns as they arise.
Your New Year just got a little happier. Retailers Insurance Company dental rates go down Jan. 1! 800.366.3699
A closer look at the 2018 FedEx and UPS rate increases With the New Year approaching, it’s time to look at the UPS and FedEx rate increases for 2018 and how they will affect your costs. In September, FedEx announced an average increase of 4.9 percent on Express and Ground services. UPS joined the party in October, announcing that they will also be increasing their rates by an average of 4.9 percent. The new UPS rates will take effect on Dec. 24, while FedEx will be instating them a week later on Jan. 1. Here are some quick facts: • UPS is lowering the dimensional weight divisor to 139 for domestic packages less than or equal to one cubic foot in size (1,728 cubic inches) • Surcharges for larger packages will rise sharply • FedEx is adding a 2.5 percent third party billing surcharge to match UPS • Additional surcharges and increased rates will apply during the 2017 holiday season The averages might be the same, but the rates vary. With higher increases for some services and lower
increases for others, you can’t budget based on your costs increasing 4.9 percent. It’s important to look at what services you use, your package characteristics, and the locations you’re shipping to. You will need to evaluate the new rate charts, the surcharge increases, and other changes to find your biggest cost offenders. The 2018 FedEx and UPS rate increases are proof that the carriers are getting smarter, hitting shippers where it hurts most. Luckily, you don’t have to navigate the changes alone. PartnerShip®, the company that manages the MRA Shipping Program, has evaluated the new rate charts and completed a detailed analysis, so it’s easier for MRA Members to assess the impact on their shipping costs. Download the free white paper at http://web.partnership.com/cn/auhsa/FedEx-UPS-Rates-2018 When you enroll in the MRA Shipping Program, you receive exclusive discounts on select FedEx® services – helping to offset the 2018 rate increases. For more information or to enroll today, visit PartnerShip. com/41mra or call 800-599-2902.
MGA picks 2 grocers for MRA boards Continued from page 1
knowledge and my passion for the people and businesses that make the industry a success,” Neiman says. “As an MRA board member, I hope to promote the food industry’s continued success.” Neiman and his wife, Stephanie, have been married 22 years. They have three children: Eliza who is age 16, Ruby who is 13, and Rex who is seven. Neiman and his family live in St. Clair where they are very active in the community. John Leppink is president of Leppink’s Incorporated, where he oversees the total store operations of four Leppink’s Food Centers, three Leppink’s Pharmacies, 10 Save A Lot food stores, and one North Bank Hardware store with his business partner Richard Cole. In addition to the various retail operations, John and Rich operate LCL Development, LLC, which is a property leasing company that currently oversees 30 active rental properties. Leppink’s Food Centers began in 1928 when John’s grandfather, also
named John Leppink, opened “John Leppinks Quality Cash Market” located in Belding. From there the company has grown to six Leppink’s Food Centers, with John’s cousin, Ransom Leppink, owning and operating two of them. As a third-generation grocer, Leppink grew up working in the stores. He is a graduate of Western Michigan University’s Food Marketing Program. “I look forward to working with MRA to make our state stronger,” Leppink says. “My goal is to find opportunities to share my grocery industry expertise to make sure grocers continue to have a strong voice in our state.” Leppink and his wife, Jackie, have been married 33 years. They have three grown children who all work in the food industry: Robert is Leppink’s Center Store Director; Arianna is the Marketing Director, and she assists with LCL Development; and Andrew is a Director with Quality Food Centers in Seattle.
New Medicare cards won’t have Social Security numbers By Ally Nemetz, Customer Service/Data Administration New Medicar e cards The Centers for Medicare & Medicaid Services (CMS), under the Medicare Access and CHIP Reauthorization Act of 2015, is required to remove Social Security Numbers (SSNs) from all Medicare cards by April 2019. A new Medicare Beneficiary Identifier (MBI) will replace the SSN-based Health Insurance Claim Number (HICN) on the new Medicare cards for Medicare transactions like billing, eligibility status and claim status. The biggest reason the SSN is being removed from the Medicare cards is to fight medical identity theft for people with Medicare. By replacing the SSN-based HICN on all Medicare cards, CMS can better protect private health care and financial information, and federal health care benefit and service payments. The cards will be mailed beginning April 2018.
Affordable Care Act 1095 tax forms for the 2017 tax year The Affordable Care Act, or Obamacare, requires insurance carriers and the employer (for employers with a self-funded health insurance plan) to send a tax form called the IRS Form 1095 to employees who are full-time employees (work an average of 30 or more hours per week) or to employees that were enrolled in a health plan for any month in 2017. The deadline to furnish the 1095 forms is January 31, 2018. The IRS has not extended the good-faith penalty
Credit card processing: Be alert for fraud We are hearing of potential fraud incidents that involve requests to wire money or to ship merchandise out of the country. If you experience this, please call customer service at 800.563.5981 to discuss before processing the transaction. Also be on the alert for suspicious or fraudulent transactions. Contact customer service to discuss any of the following: • Multiple purchases by the same customer • Multiple credit cards from the same customer • AVS (Address Verification) or VCode (Security Code) does not match Processing errors If you receive a “Re-Enter or Lost Communication” response when processing a transaction, please contact Customer Service so we can verify the transaction before you continue to process. If you currently use a dial-up connection on your credit card terminal and experience communication errors, you may want to explore an Ethernet connection to eliminate these errors. Data Security Compliance Data security compliance is mandatory. You must complete an annual
PCI Self-Assessment Questionnaire to verify if your business is PCI compliant. Visit http://www.compliance101. com to begin the questionnaire. These terminals are no longer PCI Compliant and must be upgraded: Zon, Tranz, Omni, Hypercom, Nurit, Equinox, Verifone 510 and 570. Please contact customer service to obtain upgrade options. Processing updates • We need to obtain your email address to notify you of processing updates, system issues or industry changes. Call 800.563.5981 option 2 or email customerservice@ retailers.com and include your merchant name and merchant number. • If you process via IP communication (Gateway, Software, Mobile or Wireless device) please verify your protocol has been updated to TLS 1.2 to avoid outages due to unsupported protocol. • Please reconcile your processing statement with your daily settlement report and your bank statement. Contact customer service if you have any discrepancies. • Keyed transactions must be imprinted to remedy customer disputes. Call customer service if you need an imprinter or imprinter sales slips.
relief for this filing period so employers that have a self-funded health plan should get prepared and review eligibility reports as soon as possible allowing time for corrections/amendments as needed. Although we are in the third year of this requirement, there are still many employees who are unfamiliar with the IRS Form 1095. To help your employees understand the purpose of the 1095 form, it may be helpful to distribute a memo or post information about the 1095s. You can visit the IRS website for useful information and Q&As to help you with
communication for your employees. Extended open enrollment for dental We have extended our Open Enrollment period through Dec. 30 with an effective date of Jan. 1. Eligible employees and dependents have the opportunity to enroll for coverage during this time. To learn more, please contact our office at 800.366.3699, ext. 681. It’s also worth noting that Retailers Insurance Company dental rates are going down, thanks to performance of the program.
Travel Michigan reports on impact of tourism The impact of Michigan’s tourism industry on the state’s economy is evident in a new report from Tourism Economics that found visitors spent $23.7 billion in Michigan in 2016. This is a 3 percent growth in spending from the previous year and is largely attributed to a 3 percent growth in visitors, with more than 119 million visitors traveling in Michigan in 2016. This visitor spending also directly supported 221,420 jobs across the state. Tourism plays a critical role in several statewide industries, including lodging (95 percent), recreation (43.5 percent) and food & beverage (25.5 percent). It accounts for 3.1 percent of Michigan’s retail trade. Increases in visitor activities in Michigan in 2016 also supported a 1.7 percent growth in employment, marking the sixth straight year of growth for tourism supported employment in Michigan. While representing only 42 percent of all stays, overnight visitor spending accounts for 80 percent of all traveler spending, and on average overnight visitors spent $381 in Michigan during their stay in 2016. Pure Michigan seasonal ad-
GET RECOGNIZED! Have you contributed to Michigan Retailers Association political action committee yet? If not, do so by Dec. 31 and you’ll be recognized in the February issue of The Retailer! With an election year looming, you’ll likely get lots of requests for political donations. Why our PAC? • Because like you, we believe in open markets, fewer regulations and simple policies. • Because we’ve worked hard to block legislation that would create a patchwork of complicated local regulation, confusing to retailers and consumers alike.
Photo by Patrick Kerwin
vertising efforts, including winter, are primarily focused on regional and national markets (warm weather only) to drive overnight stays in the state throughout the entire year and generate additional traveler spending. A report by Longwoods International released earlier this year found the Pure Michigan advertising campaign generated 5 million trips to Michigan from out-of-state travelers, resulting in $1.5 billion in visitor spending. In a separate report, Tourism Economics estimates that direct visitor
spending resulting from the Pure Michigan advertising campaign spurred an additional $897 million in spending in the Michigan economy and total visitor spending supported 21,932 jobs. Vi s i t m i c h i g a n . o rg / i n d u s t r y / research for the full Tourism Economics report on The Economic Impact of Travel in Michigan (2016), as well as regional economic impact tables. The Tourism Economic Campaign Economic Impact report is also available, as is a 2016 Michigan Visitor’s Study by Longwoods International.
• Because we’re a proven force in Lansing, with big legislative wins, including product bans, item pricing and Main Street Fairness. • Because in the 2018 election cycle, Michigan Retailers Association will be the only PAC dedicated to supporting candidates who understand retail issues.
Together we can grow opportunities for retailers and beat back government overreach into your business. Together we are stronger.
Your champion on retail issues
Preliminary results show record 2017 fiscal year for Michigan Lottery By Aric Nesbitt, Commissioner T h e p re l i m i nary results for the Lottery’s 2017 fiscal year bring very good news for retailers, the Lottery, and most importantly, public education in Michigan. Preliminary numbers show that Lottery sales broke the $3 billion mark for the second straight year. This impressive record is the result of teamwork between the Lottery and its 11,000 retailers across the state. The 2017 figures show a record $3.3 billion in Lottery sales, topping the previous record set in 2016 by about $200 million. Retailers also enjoyed a record year in 2017, with commissions hitting a record $248.4 million, up more than 7 percent from the previous record of $231.8 million set last year.
Total sales of instant games surpassed $1 billion for the third straight year. The Lottery’s instant game portfolio once again was a major part of this success. Instant games remain a favorite for the most loyal Lottery players, as well as casual players and make up nearly 40 percent of overall sales. The Lottery’s team puts a great deal of focus and effort into developing instant games that will attract players to retailers and boost sales. The Lottery’s marketing team developed a number of advertising campaigns to support new instant games, helping to raise awareness of our games and boost sales for retailers. That work paid off in a big way in 2017, with total sales of instant games surpassing $1 billion for the third straight year. Instant game sales increased an impressive 16 percent over 2016 to $1.3 billion. The hard work of retailers and the Lottery also led to a record contribution to the state’s School Aid Fund. Preliminary figures indicate the Lottery’s contribution to the School Aid Fund will total about $920 million, marking 11 straight years of $700 million-plus contributions to support public education from the Lottery. Since it began in 1972, the Lottery has provided more than $21 billion to
support public education in our state. The record results in 2017 wouldn’t have happened without each retailer’s hard work and commitment to the Lottery’s mission. We’re excited about the opportunities that 2018 presents, and look forward to working with retailers to break even more records! NEW INSTANT TICKETS These tickets go on sale Dec. 5: IG 219 - Bonus Cashword - $3 IG 220 - White Ice 7’s - $5 IG 245 - 25th Anniversary Wild Time - $5 IG 233 - Diamond Dazzler - $20 INSTANT GAMES SET TO EXPIRE Dec. 4 IG 738 - Wild Time - $2 IG 751 - Super Bingo - $5 IG 749 - $300 Grand Cashword - $5 IG 777 - Ice Cold Cash - $5 IG 722 - Mega Money Multiplier - $20 Jan. 8 IG 737 - Fantastic 5’s - $5 NEW PULL TABS TICKETS These tickets go on sale Dec. 5: MI 516 - Buck Buster - $.50 MI 517 - Polar Dough! - $1 MI 514 - Triple Diamonds - $2 PULL TABS GAMES SET TO EXPIRE Dec. 12 IT 863 - Pure Gold - $1 MI 566 - Pac-Man - $1 MI 567 - Double Cherry Slots - $.50 MI 568 - Gold Bar Bonanza - $2 MI 582 - All American Winners - $1 Jan. 16 MI 575 - Pinball - $1 Jan. 17 MI 564 - Ultra 8’s Multiplier - $1 TICKET ACTIVATION 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 benefits the state in the form of contributions to the state School Aid Fund, prizes to players and commissions to retailers and vendors. In 2016, the Lottery provided a record $888.9 million to help support Michigan’s public schools. Since it began in 1972, the Lottery has contributed more than $20.5 billion to support public education. For additional information, follow the Michigan Lottery on Facebook, Instagram, Twitter and online at www.michiganlottery.com.
NEW MEMBERS Northern Dents Inc., Au Gres McDonalds Food & Family Center Inc., Bad Axe Exhibition Services, Bay City Lo-Gale Rentals, Benton Harbor American Heritage AFC Inc., Brownstown Something Personal, Cadillac Alliance Coating Systems LLC, Canton Resourceful Recycling Inc., Chesaning Deluxe Nails by Vo LLC, Dearborn Golden Logistics LLC, Dearborn Anaya’s Pallets and Transport Inc., Detroit Sound Solutions Home Audio & Visual LLC, DeWitt Source 1 Imaging Systems, DeWitt Stephenson & Company PC, CPAs, East Tawas Di-Anodic Finishing Corp, Grand Rapids Sun Rentals Inc., Grand Rapids West Michigan CDL Inc., Grandville Grosse Pointe Pizza Corp, Grosse Pointe A & S Industrial LLC, Hancock BestWay Pak-N-Send, Haslett Girlfriends Fit Club LLC, Holland EOCT Inc., Kalamazoo Orion Market, Lake Orion UAW Local 5960, Lake Orion Halftime C-Stores, Lawton Identify Inc., Madison Heights
Sports Ink Screen Printing & Embroidery LLC, Manistee CC Jewelers of Manistee, Manistee Mushroom Sports Bar LLC, Mesick Jones For Men Inc., Monroe Monroe County Rod and Gun Club Inc., Monroe R Diner, Monroe Nino & Nick LLC, Monroe Michigan Insurance Group, Muskegon AC & E Rental Inc., Okemos TMA Electric LLC, Port Huron Bridge Street Baby LLC, Rockford Northern Filter Service Inc., Six Lakes Expedite Express Transportation Services, Southfield Buckhorn Inn, Tawas City Harrison Veterinary Services LLC, Tawas City Volpi Corp, Temperance Sound Environments LLC, Traverse City K & M Tires and Service LLC, Traverse City Local Union 3000, Trenton Weidman Eagles #4540, Weidman Vantage Point Manufacturing, West Branch Ogemaw Community Thrift Store, West Branch Elvis Auto Service LLC, Wyoming Delux Rental, Ypsilanti Progressive Systems Inc., Zeeland
Have you experienced organized retail crime? Continued from page 1
website (www.miroc.us) that is used to track and report organized retail crime in real time.” To glean information from the site, you must be approved for access. The board also hosts an annual conference to discuss all things ORC. Next year’s conference is on March 8 and approximately 150 attendees are expected. Returning stolen merchandise is the most common form of retail theft, constituting 68 percent of all ORC, followed by employee return fraud (65 percent), the NRF survey showed. Returns of merchandise purchased on fraudulent or stolen tender (57 percent) and returns made by ORC groups (54%) came in third and fourth. Wardrobing (wearing an item and returning it) and returns using counterfeit receipts or e-receipts also were common methods used. The survey showed that six in 10 retailers had recovered merchandise from physical fencing locations including pawn shops, flea markets and temporary “pop-up” stores, about the same as last year. While the internet offers anonymity to criminals who want to fence items, only
56 percent of retailers had found stolen goods online, down from 75 percent. ORC criminals look for items that can be stolen and quickly resold. “The demand for common household items is always strong, so they are easy to fence,” Hallan said. In Michigan, popular stolen goods that can easily be reintroduced into the stream of commerce include razor blades, baby formula, Red Bull and over-the-counter medications, Hallan said. Luxury items are also popular targets, including designer clothes and handbags, Dyson vacuums, Nest thermostats and iPads. About 11 percent of purchases will be returned this year (13 percent during the holidays), and of those, 11 percent of those likely were stolen. The same return rate goes for items purchased online but returned to a store, but of those, about 9 percent stem from fraud. Los Angeles continued to be the hardest-hit area for ORC in the nation, a position it has held since 2012. It was followed by New York City, Houston, Miami, Atlanta and Chicago. No Michigan cities fell in the top 10.
THE HOLIDAY GIFT THAT HAS SOMETHING FOR EVERYONE Fun to give and great to get, it’s easy to see why customers make Michigan Lottery holiday instants their go-to gift. Everyone likes the chance to win up to $500,000, with more than $61.8 million in total cash prizes. There’s plenty for you, too, with more than $6.6 million in retailer commissions. So, stock up on the holiday gift that oﬀers big winnings, big sales and is everyone’s go-to: holiday instant tickets.
The December 2017 issue of Michigan Retailer, the official publication of Michigan Retailers Association.