3
Opioid crisis
What can employers do to protect employees and maintain a safe workplace? MRA General Counsel Bill Hallan has some tips. Page 3
6
New Grocers members
A hearty welcome to our new members from the Michigan Grocers Association, which became an MRA division in January. Check out the list. Page 6
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Key dates for retailers
Save the dates! Here are some suggested dates you may want to use for promoting your products. We provide a fun pull-out calendar. Page 8
® February 2018 Vol. 43 No. 1
www.Retailers.com
The official publication of Michigan Retailers Association
Chains find compelling reasons to go small
By Rick Haglund Major discount retailers that long profited by erecting large-format stores in the suburbs are going small. Meijer, Target and others are zeroing in on underserved urban markets and college towns with smaller-format stores that are a fraction the size of their mammoth supercenters. The move to smaller stores is a result of emerging trends, including growing urban populations, a saturation of retail in the suburbs and more online shopping. “If I’m a Meijer, how am I going to grow my business? I’m everywhere I want to be in suburbia,” said Cindy Ciura, principal of CC Consulting, a retail consulting firm in Bloomfield Hills. Meijer is building two small-format stores in Michigan. A 37,000-squarefoot store that Meijer calls Bridge Street Market is scheduled to open in Grand Rapids later this year. The typical Meijer store is about 200,000 square feet. Continued on page 4
We’ve been busy in Lansing! Politics and policy keep the MRA government team plenty busy, as you’ll see in this issue of The Retailer. On Page 10-11, MRA’s Amy Drumm describes the legislative issues that kept her busy in 2017, and what may pop up in 2018. MRA named its Legislators of the Year at the Jan. 30 meeting of the MRA Boards of Directors. See Page 12 to find out who received the honor. Also at that meeting, Gov. Rick Snyder met with board members. See what he had to say on Page 13.
This is a rendering of Target’s small-format store in East Lansing, slated to open in 2019.
U.S. Supreme Court to revisit online sales tax collection Brick and mortar retailers across the country welcomed the Jan. 12 announcement that the U.S. Supreme Court will take up a case this spring regarding whether out-of-state online retailers should collect state sales taxes. This case has the potential to help Michigan-based brick and mortar retailers who are forced to collect the state’s six percent sales tax on every dollar of every purchase while out-of-state online retailers do not. It could also help fill budget holes in states around the country. A report from Congress’ Government
Accountability Office estimates $13 billion worth of sales taxes go uncollected each year. The case comes out of South Dakota, which passed a law in 2016 requiring out-of-state online sellers to collect the state’s 4.5 percent sales tax. The law was then challenged by Wayfair, Overstock.com and Newegg. These online retailers challenged the South Dakota law for violating the U.S. Constitution’s commerce clause, which only grants congress the authority to impose tax and regulatory Continued on page 7
Changing your business address Page 5
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Michigan Retailer
Musings from frigid Lansing
Board of Directors: Orin Mazzoni, Jr.
Chair Orin Jewelers, Garden City
by James P. Hallan, MRA President and Chief Executive Officer Weather Happy New Year from frigid Lansing. We are all experiencing a very strange weather pattern in Michigan this year. Yesterday it was 58 degrees and balmy. Today, the Lansing schools are closed due to ice and snow. As I pen this article, it’s 21 degrees with heavy snow falling. A week ago we experienced subzero temperatures. Of course, this is one of the many reasons we all love Michigan. Michigan Grocers Effective Jan. 1, the Michigan Grocers Association became a division of Michigan Retailers Association, and we can report that the transition has gone very smoothly. We are welcoming about 200 grocers located throughout Michigan. This follows the banding together with the members of the Michigan Retail Hardware Association two years ago. Linda Gobler, longtime president of the Michigan Grocers, has retired but has been retained as a consultant. One of her last acts was to sell the Michigan Grocers building during the last week of 2017, which we greatly appreciated. Managing old headquarter buildings is not our core mission. So, the transaction was smooth and clean, and together the retail community is stronger, both in terms of members and financial assets.
Showing up I learned a long time ago that those who “show up” and attend meetings have the ability to impact public policy. You can rest assured that Michigan Retailers is fully engaged in the legislative process and we show up to make sure our collective voice is heard. Gov. Rick Snyder remarked at our Jan. 30 board meeting that he’s appreciated our support – indicating that MRA is on the radar! More details of his visit are on Page 13. Services Retailers Insurance Company just ended a terrific year. Over the past year, almost $2 million in new premium was sold through our independent agent network with 276 new policyholders coming on board. Now, those are gross numbers, because as every business knows, customers are lost. But I’m happy to report that we significantly grew the business while taking a rate cut. Look for more information in our upcoming annual report. Online sales tax In extraordinarily good news for brick and mortar retailers, the U.S. Supreme Court has decided to take up a South Dakota case on whether online sellers can be required to
collect sales tax the same as local stores. Many states, including Michigan, passed Main Street Fairness legislation, which expanded the definition of nexus beyond physical presence in order to collect sales tax from entities such as Amazon. However, because the federal interstate commerce clause is involved, a complete solution requires clarity by either the U.S. Congress or the U.S. Supreme Court. Simply put, this is good news that the U.S. Supreme Court has agreed to review how nexus is determined in a changing world of electronic commerce. It is doubtful that the issue would be on the Supreme Court docket without the affirmative action taken by states, such as Michigan, that moved Main Street Fairness Acts through the state legislative process. Mission As we move into 2018 our core mission is constant. Your best interests are always at the forefront. I’d encourage you to check out our dental and health programs, merchant processing program, Buy Nearby marketing program, legislative advocacy and our Foundation, which provides scholarships to member employees.
NAFTA withdrawal would hurt retailers and customers By Larry Lloyd
As the sixth and penultimate round of NAFTA negotiations wrapped up late last month in Montreal, business and industry groups across the U.S. and North America are focused on the future of the 25-year-old free trade deal. Since its inception in 1993, NAFTA has opened new markets and catalyzed enormous economic growth by lowering trade barriers between the U.S., Canada and Mexico. Fourteen million U.S. jobs – many of those in the retail sector – depend on NAFTA. Collectively, North American GDP has risen by 166 percent because of NAFTA, from $8 trillion up to $21 trillion today, according to World Bank data. For retailers and their custom-
ers, the implications of a NAFTA withdrawal would be sweeping and harmful. In addition to the nearly 7 million retail jobs tied to trade, retailers depend on imported goods to deliver for customers at reasonable prices. A study found that in the past decade alone, the cost of television sets in the U.S. is down 87 percent, computers down 75 percent and toys down 43 percent. NAFTA’s lower trade barriers have also fostered complex supply chains, where jeans may be made in Mexico, but with cotton, zippers, thread and buttons made in the U.S. These supply chains
www.retailers.com
work – keeping costs down for customers – because they utilize each country’s comparative advantages and resources. A National Retail
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
Dan Marshall
Past Chair Marshall Music Company, Lansing
Bo Brines
Little Forks Outfitters, Midland
Ken Hayward
Grand Hotel, Mackinac Island
Joseph McCurry
Credit Card Group
Larry Mullins
Brandon Tire & Auto Service Center, Ortonville
Bryan Neiman
Neiman’s Family Market, East China Township
Barb Stein
Great Northern Trading Co., Rockford
Joe Swanson Target Corp.
Thomas Ungrodt
TDU Consulting, LLC, Ann Arbor
James Walsh
Meijer, Inc., Grand Rapids
D. Larry Sherman
Board Member Emeritus
Michigan Retailers Services, Inc. Board of Directors: James P. Hallan President and CEO
Chad Ayers
Allendale True Value, Allendale
Bill Golden
Golden Shoes, Traverse City
John Leppink
Leppink’s Food Centers, Belding
James P. Hallan Meegan Holland Publisher
Editor
Pat Kerwin
Design Manager
Publication Office:
603 South Washington Avenue Lansing, MI 48933 517.372.5656 or 800.366.3699 www.Retailers.com www.RetailersInsurance.com www.BuyNearbyMI.com
Subscriptions: Foundation (NRF) study examining five types of apparel even found that 75 percent of the prices went to U.S. contributors. Continued on page 5
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.
February 2018
3
IT’S THE LAW
Opioid crisis: Employers must act By William J. Hallan, MRA Executive Vice President, COO and General Counsel Like the rest of the country, Michigan is having an opioid crisis. The number of opioid prescriptions is i n c re a s i n g , a s are opioid related deaths and overdoses. Here are some shocking statistics from the Michigan Department of Health and Human Services: • From 1999 to 2016 the total number of overdose deaths involving any type of opioid increased more than 17 times in Michigan. • I n 2 0 1 5 , t h e re w e re 1 1 . 4 m i l l i o n p re s c r i p t i o n s f o r painkillers written in Michigan. That equates to 115 opioid prescriptions per 100 people. • In 2016, 2,335 Michiganders died from drug overdoses. The Michigan legislature has taken a number of steps to deal with the crisis. At the tail end of 2017, a 10bill package was signed into law that, among other things, requires doctors
to utilize an online prescription tracking system, limits the numbers of pills dispensed in a given seven-day period, and expands treatment options for Medicaid recipients in need of addiction help. While a move in the right direction, many employers are wondering what steps, if any, they can take to protect their employees and maintain a safe workplace. This article serves as a follow-up to my October 2017 column on marijuana, which encouraged employers to consider adopting a drug-free policy. To assist its workers’ compensation policyholders, Retailers Insurance Company developed a model DrugFree Workplace Policy that employers can adopt for their own use. Not only does the policy help employers establish guidelines for a drug-free workplace, but it also qualifies RIC workers’ compensation policyholders for a 5 percent premium credit on their policy. While RIC policyholders aren’t required to adopt the model policy to receive the credit, and can adopt their own policy, we’ve tried to make the job easy. The goal of the model policy is to
balance individual employee privacy with the employer’s need for a safe, productive and drug-free environment. Thus, the policy has many elements, such as identifying prohibited activities (e.g., consuming drugs at work), setting forth testing procedures (e.g., testing for job applicants, reasonable-suspicion testing), and establishing actions the employer may take upon a violation (e.g., termination, denial of workers’ compensation benefits). It also addresses how employees should report their use of prescription medication and provides guidance for employers that wish to adopt an employee assistance program. With an opioid epidemic crossing the nation, employers should not be paralyzed with inaction. Establishing guidelines that are clearly communicated and uniformly administered can help keep you, your employees and your workplace safe. Members of Michigan Retailers Association and policyholders of Retailers Insurance Company can obtain a copy of the model policy from Laura Schilling, Director of Underwriting for RIC at lschilling@retailers.com.
Former MRA board member, jeweler passes Douglas Schubot, former owner of Jules R. Schubot Jewellers in Troy, passed away on Jan. 18. Schubot, 87, took over the family business in 1970. The store opened in 1917 by Douglas Schubot’s father, Jules. Schobot was named Retailer of the Year 1998. He was first elected to the MRA Board of Directors in 1992. He served on the board until 2007. “Doug Schubot was an excellent jeweler who carved out his unique niche by exclusively selling high-line items,” said James Hallan, President and CEO of MRA. “Doug was a terrific MRA board member for 15 years beginning in 1992 and ending in 2007. His thoughtful input was instrumental in helping us lay the groundwork for today’s successes.”
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Michigan Retailer
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Chains try small formats Continued from page 1
T h e Wa l k e r - b a s e d r e t a i l e r also announced it will open a 42,000-square-foot store as part of a $60 million mixed-use development along the Detroit River on the city’s east side in 2019. Target operates 59 small-format stores, including 13 near college campuses. It’s planning to have a total 130 such stores open by the end of 2019. The Minneapolis-based retailer has announced it will open a 22,000-squarefoot store in East Lansing’s $135 million Center City development, which also will contain 365 apartments, in 2019. The typical Target store is about 130,000 square feet. Target’s new store will offer those living in downtown East Lansing something that urban dwellers in other cities often lack—groceries. The store also will carry cosmetics, personal care items, men and women’s clothing, and a selection of home décor items aimed at dorm and apartment residents. “ Yo u ’ v e r e a l l y c r e a t e d a n investment in Center City with a grocery option that encourages high-density urban downtown living,” said Steve Willobee, chief operating officer of the Lansing Area Economic
Partnership. Target has no plans for additional small-format stores in Michigan, but is “always looking for possible new locations, including Michigan,” said spokeswoman Jacqueline DeBuse. Other retailers, including Art Van and Kroger, have built some small-format stores. Kohl’s has shrunk the size of 300 of its stores and is looking for a grocery partner to fill the empty spaces. Growing urban populations of young people and empty nesters, especially in downtowns, have attracted the attention of retailers. The cities of Detroit and Ann Arbor led all 233 Southeast Michigan communities in the number of new residential unit permits in 2016, according to the latest available data from the Southeast Michigan Council of Governments. Ninety-four percent of those units in Detroit were apartments or lofts while 85 percent in Ann Arbor were apartments. The city of Grand Rapids issued permits for 2,542 housing units in the two-year period of 2016 and 2017, up 51 percent from 1,681 permits issued in the 2014 and 2015 period. Opening urban stores can be
The small-format Target store in Brooklyn, N.Y.
more expensive and complex than building new stores on open land in the suburbs, Ciura said. Most big retailers, which generally own their suburban stores, lease space in urban developments. Utilities, taxes and wages often are higher in urban locations than in the suburbs, she said. “Retailers aren’t used to these high costs of occupancy. They have to refine and redevelop their business models,” Ciura said. Even the savviest retailers have stumbled in entering urban markets.
Walmart is closing all 102 of its Walmart Express stores, which some analysts said failed because they offered too many brands of the same items. It’s now launching a new line of stores it calls Neighborhood Markets, which focus more on groceries. Target CEO Brian Cornell recently told investors that small-format stores are a critical component of the retailer’s growth strategy. Those stores are generating sales of about $600 per square foot, double that of its larger stores, he said.
February 2018
5
RETAIL TECHNOLOGY NEWS
Visa eliminates need for signatures on EMV transactions By John Mayleben
Changing your business address
What if your store moves or the name of your street changes? Figure it’ll take at least a year to spread the word far and wide, so don’t let up on reminders! Here’s how to get the word out:
Stuff bags
1
Two months out, insert postcards in shopping bags announcing your move – perhaps a “ Stay tuned” message on when and where the move will take place.
Social media posts
2
Encourage your customers to follow your social media for the most up-todate details about when the change is happening and special deals you’ll offer at your new address.
Use Facebook Live
3
How about a video of you locking the door on your old store, getting in the car and driving to your new store? Show customers that it wasn’t hard for you to move, so it won’t be hard for them to find you.
Communicate
4
Don’t forget to make these changes: Voicemail. Your email signature. Business cards and other printed materials. Your web site. All of these should scream reminders that you’ve moved. And of course, notify the media!
Don’t forget Google
5
You don’t want to fall off Google’s radar when people search for your business. Be sure to change your address (and eliminate your old one) on Google My Business, which provides tips for doing that here: http://bit.ly/movewithGoogle Source: The Retail Doctor - RetailDoc.com
I’ve been known to wonder if the Declaration of Independence were signed today instead of 240-plus years ago, how would we put our “John Hancock” on the document. After all, who would have thought we wouldn’t need to put our signature on a credit card transaction? Visa has recently answered this question. Effective this April, if you accept a Visa EMV card transaction, you will not be required to get a signature on that transaction. This change is ONLY for EMV transactions (chip or contactless) - not for the old traditional mag stripe transactions. Visa is clearly using this as an incentive to drive those last remaining merchants towards accepting EMV transactions. This fits with their goal of having all of the U.S. face-to-face transactions run on the EMV system. The reason for this is fraud control. This type of pressure on any of the remaining merchants who have not upgraded their technology will continue to ramp up. The benefit to a merchant who is EMV compliant is that they can avoid holding liability for counterfeit card transactions.
MRA has been of fering EMV compliant terminals to our members since 2014, so, thankfully, most of our merchant processing locations are already up to date. Vi s a re c e n t l y re p o r t e d t h a t counterfeit card fraud is down 66 percent over two years ago. They also reported that card issuers had issued more than 460 million chip-based Visa cards. As I look in my wallet today, none of my cards are the traditional mag stripe and I would guess that is the same for most consumers. If you haven’t upgraded your technology to accept EMV chip transactions, please take a minute to reach out to us at MRA. We can provide you with numerous options for you to consider for upgrading your merchant processing terminal. By the way, maybe those 56 patriots might have simply “dipped” their chip cards or tapped their iPhones against the reader to signify their acceptance of the Declaration of Independence. But that certainly doesn’t have the cache of “putting your John Hancock” on the document. As always, if you have any questions, please don’t hesitate to contact us at MRA. 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.
No NAFTA could hurt retailers Continued from page 1
“An end to NAFTA would not lead to a rush of jobs back to the United States,” writes Matthew Shay, president and CEO of the National Retail Federation, in The Hill. “It would have the opposite impact, negatively impacting the U.S. economy, particularly U.S. companies that have used the provisions of NAFTA to build North American value chains.” Many other industry groups have joined the NRF in its calls to preserve the benefits of NAFTA. Privately owned freight railroads — an industry that connects and serves nearly every industrial, wholesale, retail and resource-based sector of the economy — offers a distinct perspective on how trade powers our economy, with a recent report finding that 50,000 rail jobs and 42 percent of rail carloads and intermodal units directly depend on trade. The Michigan economy is closely linked with trade. A seamless sup-
ply chain linking North American production and markets enables Michigan retailers to be globally competitive. Railroads have invested $100 million of private capital into the intermodal network over the last four years to enhance efficiency, productivity and safety for shippers. Railroaders also comprise 50,000 of the 7 million U.S. jobs dependent on North American retail free trade. With the final round of NAFTA negotiations set for late February in Mexico, stakeholders across the U.S. are highlighting the benefits of the agreement and watching closely. Larry Lloyd is State Director-Michigan of GoRail, which educates community leaders across the country about the public benefits of freight rail investments and a strong rail network. You can follow him on Twitter: @LarryIsaacLloyd and @GoRail.
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Michigan Retailer
www.retailers.com
NEW MEMBERS
MRA welcomes Michigan Grocers Association members With the New Year came an influx of new members from the Michigan Grocers Association, now a division of MRA. Listed below are the 197 grocers who have joined (we’ll have other new members listed in our April Retailer). Thanks to all the grocers who show faith in MRA’s ability to advocate on their behalf and provide competitive services. We also hope you join us in our Buy Nearby campaign, which educates consumers on the impact of shopping local. The Log Cabin Country Store, Akron Great North Foods, Alpena Prairie Farms Dairy, Alto Crosset Company, Ann Arbor Arbor Farms Market, Ann Arbor Busch’s Fresh Food Markets, Ann Arbor Houseman’s Foods, Baldwin Better Made Snack Foods Inc., Bay City Jamies Dairies, Bay City Michigan Brand, Bay City McDonough’s Market, Beaver Island Leppink’s Food Centers, Belding Don’s Foodland, Birch Run Marion Springs General Store, Brant Siler’s Market, Breckenridge Ben’s Supercenter, Brown City Lowery’s Meat & Grocery, Buchanan Nehring’s Market, Burton Thermo King Michigan, Byron Center Campbell Group, Caledonia Hoyt Treasury Services LLC, Caledonia Cedarville Foods, Cedarville Shoppers Market III, Center Line Grazing Fields, Charlotte Witbeck’s Family Foods, Clare Neiman’s Family Market, Clarkston Bowman’s BBQ Meat Market, Climax Daily Deals Food Outlet, Comstock Park Jeff’s Marketplace, Croswell Saturn Food Center, Dearborn Heights Faygo Beverages, Detroit Reach Influence, Detroit Savon Foods Super Market, Detroit Fairline Food Center, Detroit Imperial Supermarket, Detroit Carl’s of Dimondale, Dimondale Dick’s Food Market, Dorr DeMond’s Super Valu, Douglas Myers Super Valu - Dowagiac, Dowagiac Sune’s Drygoods and Grocery, Drummond Island Riverside Market, Durand Michigan Pork Producers Association, East Lansing
Michigan Potato Industry Commission, East Lansing RPS Regency, East Lansing Klenow’s Market, East Tawas Eastport Market, Eastport Elmer’s County Market, Escanaba Jack’s Fruit & Meat Market, Essexville Foster’s Supermarket, Evart Fairview Food Market, Fairview Merrill Lynch, Farmington Palace & Foodmax Super Markets, Farmington Jo’s Little Store, Fennville BUNZL Michigan, Fenton Fife Lake Village Market, Fife Lake Koegel Meats, Flint Bueche Food World, Flushing Independent Food Retailers Association, Frankenmuth The Johnston Group, Frankenmuth Shop-N-Save Food Centers, Fremont Freeman Family Enterprises, Gaylord Shelby Publishing Company, Georgia The Grain N Grape, Gladstone Anderson’s Market, Glen Arbor Roger’s Food Pride, Glennie Kessel Enterprises LLC, Grand Blanc Spinners Corner Grocery, Grand Haven Alliance Beverage Distributing, Grand Rapids Country Fresh, Grand Rapids Great Lakes Coca-Cola, Grand Rapids Hilco Fixture Finders, Grand Rapids Hussmann Corporation, Grand Rapids Kellogg Company, Grand Rapids Star Truck Rentals, Grand Rapids Professional Media Management, Grand Rapids Asian Delight Marketplace, Grand Rapids Elite Snacks Inc., Grand Rapids Ralphs Food Market, Grand Rapids Big Top Market, Grand Rapids Kingma’s Markets, Grand Rapids Duthler’s Family Foods, Grand Rapids H.T. Hackney Co., Grand Rapids SpartanNash, Grand Rapids Kent Butchers’ Supply Co., Grandville Mondelez International, Grandville Frank’s Shop Rite, Grass Lake Larry’s Family Foods, Gwinn Alward’s Market, Hale Steve’s Country Market, Harrison Gales IGA, Hart Hansen Foods, Hart Ed’s Orchard Market, Hesperia Hillsdale Market House, Hillsdale Holly Food’s Supermarket, Holly York Risk Services Group, Howell Ace Hardware Corporation, Illinois Ken’s Village Market, Indian River Aunt Millie’s Bakeries, Indiana Miller Poultry, Indiana
Martin’s Super Markets, Indiana SUPERVALU, Indiana Angeli Foods, Iron River Consumers Energy, Jackson Walton Insurance Group, Jackson Polly’s Country Markets, Jackson Preferred Inventory Service, Jenison Schupan Recycling, Kalamazoo Gil’s Market, Kalamazoo Park Street Market, Kalamazoo Northland Food and Family Center, Kalkaska Kinross Co-Op, Kincheloe Carlin Edwards Brown PLLC, Lansing Michigan Apple Committee, Lansing Michigan Brewers Guild, Lansing BMC, Lansing Paramount Coffee Company, Lansing Gorman’s Food Market, Lansing Westlund’s Apple Market, Lansing Kris Mart, Lincoln Williams Cheese Company, Linwood ENVIPCO, Livonia Doud’s Market, Mackinac Island Apple Barrel, Manistique Jack’s Fresh Market, Manistique Town & Country Supermarket, Marshall Wagoner’s Your Hometown Food Store, Mattawan Wingert’s Food Center, Mayville Great Lakes Foods, Menominee Middleville Market Place, Middleville LaLonde’s Markets, Midland Miner’s Inc., Minnesota Hi-Lite Super Market, Monroe Danny’s Fine Foods, Monroe Max & Emily’s Classic Cheesecake, Mount Pleasant Ric’s Food Centers, Mount Pleasant Barney’s Market, New Buffalo North American Breweries, New York AMRA Energy LLC, New York AppCard Inc., New York Mac’s Market, Newberry Rahilly’s IGA, Newberry FMS Solutions, Novi Magnum Coffee, Nunica Nichols, Ohio Cookie Cupboard Gourmet Dough, Ohio Crown Poly Inc., Ohio Envirochemical Inc., Ohio Prometis Partners Inc., Ohio United Dairy Industry of Michigan, Okemos Okemos Pointe Market, Okemos Valley Food Center, Pinconning Harding’s Markets -West, Plainwell Plastipak Packaging, Plymouth MillerCoors, Plymouth Arctic Glacier Premium Ice, Port Huron Tom’s Food Center, Portland
Village Market, Rapid City Ashton General Store, Reed City Foster Blue Water Oil, Richmond Holiday Market, Royal Oak Roger’s Foodland, Saint Joseph Soo Supervalu, Sault Sainte Marie Weick’s Foodtown, Shelbyville The Little Store, Six Lakes Vinckier Foods, Smiths Creek Speedy Q Markets, Smiths Creek J & D Market, Snover Novolex, South Carolina Village Market Food Centers, South Haven Fazer’s Foods, Spalding Orchard Markets, Spring Lake Hansen Foods, Suttons Bay King Arthur Flour, Tennessee Larkin Insurance Group, Traverse City Herkner Farms, Traverse City Fieldstone Market, Traverse City Holiday Shopper, Traverse City Cherry Capital Foods, Traverse City Oleson’s Food Stores, Traverse City Tom’s Food Markets, Traverse City The Peninsula Market, Traverse City Nino Salvaggio International Marketplace, Troy Hollywood Markets, Troy Jack’s Family Grocery, Union City Central Shop Rite, Vassar Lipari Foods, Warren Baumann’s Food Center, Weidman Dublin General Store, Wellston Climate Pros Inc., Westland Great Lakes Fresh Market, Whitehall Acuity Insurance, Wisconsin Alternative Utility Services Inc., Wisconsin Associated Wholesale Grocers, Wisconsin Pepsi Beverages Company, Wixom TOMRA of North America, Wixom UBCR, Wixom RNDC of Michigan, Wyandotte
February 2018
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U.S. Supreme Court to revisit online sales tax collection Continued from page 1
burdens on interstate businesses. The South Dakota case seeks to challenge the relevancy of two previous cases, a 1992 case Quill Corp v. North Dakota settled in 1992 and a1967 case National Bellas Hess v. Department of Revenue. In both cases the U.S. Supreme Court ruled that a mail order business (Bellas Hess) or internet seller (Quill) was not required to collect sales or use tax unless the seller had some physical presence in the state. However, in Quill, the court included a direct plea to Congress that it can and should address this issue. The hope is the court in its review of the case will find the previous Bellas Hess and Quill cases to be obsolete in the face of current technology. Twenty-six years have passed since the court first ruled in Quill and Congress has still not addressed the collection of state sales and use taxes. States began challenging this physical presence standard in 2008 by passing “Main Street Fairness” legislation. MRA won approval of Main Street Fairness legislation in 2014 after several years of advocating for the change. Michigan’s legislation expanded the definition of physical presence to include new activities beyond a physical location or building. Michigan’s law has had an impact – Amazon and other sellers now collect sales tax on purchases made by Michigan residents. However, in order to capture all out-of-state sales activity, federal action is necessary. State legislation like Michigan’s 2014 Main Street Fairness law has prompted Congress to consider addressing the issue, but Congress has not been
able to decide how to handle it. It should be noted that Congress does not have much skin in the game. Sales and use taxes are collected by the states, not the federal government and could be perceived as tax increase by residents in the six states that don’t currently impose a sales tax. While there is pending legislation in Congress, its inaction prompted the Supreme Court to offer to weigh in on the issue. In a 2015 ruling on a procedural matter, U.S. Supreme Court Justice Anthony Kennedy wrote in his opinion, “The legal system should find an appropriate case for this Court to reexamine Quill and Bellas Hess.” Interestingly, the same congressmen who have not yet found federal legislation to move forward, weighed in on the South Dakota case, urging the court to leave the matter up to Congress. In an amicus brief from the chairmen of several committees with jurisdiction over the issue, they wrote, “The fact that Congress thus far has not enacted a federal solution to the problem of the collection of state use taxes on sales by remote vendors should not be seen by the Court as a reason to give up on Congress.” It seems the Supreme Court disagrees. Michigan’s attorney general, Bill Schuette, signed on to an amicus brief with 33 other states urging the court to take up the case and soon. While we wait to see the outcome of the case, it is worth noting that even a favorable ruling will still likely require both federal and state legislation to implement.
Applications starting to come in for MRA scholarships The application window for the Michigan Retailers Association’s scholarship contest is open until April 2, so make sure your student employees or dependents of employees are aware they may be eligible. MRA is offering 19 one-year scholarships for the 2018-19 academic year. Those eligible to apply are high school seniors and college freshmen, sophomores and juniors who are dependent children of owners or full-time employees of MRA member businesses, which now include Michigan Grocers members. Part-time employees who are full-time students are also eligible. Scholarships range from $1,000 to $2,000. Financial need is not a consideration. In selecting the winners, an independent committee evaluates the applicants’ academic records, test scores, and extracurricular activities including retail employment. Applicants will be notified of the results in June. Students may apply online for the MRA and Felice scholarships at bit.ly/mrascholarships. Questions? Contact MRA’s Rachel Schrauben at (800) 366-3699 or rschrauben@retailers.com to check eligibility or request an application.
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Michigan Retailer
Maybe you missed the opportunity to promote a President’s Day sale, but it’s not too late to get your retail calendar in order!
MAR
(From a retail perspective, this often turns into a DIY day for many non-church-going folks who are in the spring cleaning mood)
APR 5 Cinco de Mayo 12 World Fair Trade Day 13 Mother’s Day 16 May –14 June Ramadan 28 Memorial Day
1
1 World Book Day 4 The Oscars 8 International Women’s Day 17 St. Patrick’s Day 30 Good Friday
Here are some suggested dates for you to be aware of. These may offer potential sales opportunities or flag you as dates that may affect your sales.
MAY
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22
1 Easter Sunday AND April Fool’s Day 22 Earth Day 25 Administrative Professional’s Day
13
JUN
14 2018 FIFA World Cup 14-15 Eid al-Fitr
the festive culmination of the month of Ramadan, which started May 14. The date is tentative, as its contingent on the sighting of the moon of Shawwal
17 Father’s Day 21 Summer Solstice
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February 2018
9
JUL
AUG
28
3 Wimbledon 4 Independence Day 27 Mars approach
21 Eid al-Adha
A worldwide Muslim festival; the date is tentative as the actual date is contingent on the sighting of the moon of Dhul Hijjah
(Mars’ orbit will bring it closest to Earth since 2003. Expect telescopes, tents, astronaut gear to sell well and more than a few Martian outfits to be seen out and about)
SEP
28 Back To School
(Traditionally the last weekend in July is the busiest for back-to-school purchases)
2 International Bacon Day 3 Labor Day 9 Rosh Hashana 22 Oktoberfest
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OCT 5-7 8 16 31
Buy Nearby Weekend Columbus Day Bosses Day Halloween
DEC -10 2 22 25 26 31
Hanukkah Super Saturday!! Christmas After Christmas sales New Year’s Eve
JAN ’19
1 New Years
A day for the Rose Bowl and other college football games so expect people to stock up on party supplies
21 Martin Luther King Jr. Day
NOV 1-30 Movember
5-7
When men grow facial hair in November to bring attention to men’s health issues. Don’t expect to sell a lot of shaving wares!
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11 Veterans Day
(100-year anniversary of WWI)
22 23 24 26
31
Thanksgiving Black Friday Small Business Saturday (#ShopSmall) Cyber Monday
FEB ’19
1
2 Groundhog Day 3 The Super Bowl
The Greatest Show on Turf, celebrated with beers, snacks and sport paraphernalia
5 Chinese New Year – Year of the Pig 14 Valentine’s Day
The first post-Christmas present giving opportunity of the New Year. Flowers, chocolates, jewelry and lingerie top the most frequently gifted lists
18 President’s Day
5
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Michigan Retailer
www.retailers.com
GOVERNMENT AFFAIRS NEWS
Annual Legislative review
What MRA accomplished in 2017 and what we expect in 2018 By Amy Drumm, MRA Vice President, Government Affairs Every year I put together an annual report tracking the legislation that MRA has followed. You should have or will soon re c e i v e t h e report, which carries much more detail about bills that passed, failed or are pending, in addition to other legislative activities. Keeping food and beverages tax-free HB 4999, Public Act 135 of 2017 MRA spent several months prepping to win approval of a bill that prevents a patchwork of local taxes or fees from being applied to sugar-sweetened food or beverages for immediate or non-immediate consumption. Local taxes on sugar-sweetened beverages had most recently popped up in places like Cook County (Chicago) and Philadelphia. In these localities, overall grocery sales dropped and customers fled. The taxes and fees implemented in other states were incredibly confusing for retailers and even jeopardized food assistance programs for low-income individuals. The Michigan legislation clarified the state is the only entity that is allowed to levy a tax or fee on food and beverages. MRA has been quick to act to prevent local rules or taxes that would create a complicated patchwork of regulations for retailers to navigate, making Michigan a model state on this issue and other preemption efforts. Cracking down on retail fraud SB 44, Public Act 241 of 2017 MRA has worked on legislation for several terms that would further discourage retail theft; it finally became law this year. The new law gives law enforcement additional incentive and resources to address the ongoing problem of retail fraud and organized retail crime. SB 44 would add retail fraud and organized retail crime to the list of crimes the courts can seek cost recovery from perpetrators to pay for law enforcement’s investigation. The legislation had repeatedly been held up in the House. MRA sat down with the committee chairman to thoroughly explain the issue and reach a compromise on first-time offenders. The compromise only allows courts to order cost recovery from individuals who steal or attempt to steal more than $200 worth of mer-
chandise or have previously been convicted of retail theft. Limiting legal liability on prescriptions MRA has worked for the past several terms on legislation that would allow pharmacies to dispense a new category of drugs made with biologic components referred to as biologics, biosimilars and interchangeable biosimilars. This legislative term, the effort took a different twist as we were neutral on language that would require the dispensing pharmacy to notify the prescriber when dispensing these new drugs by making an entry in an electronic pharmacy records system accessible to the prescriber. These entries already occur so it does not
MLCC decided to rescind the rule because no other licenses are given that same protection. The potential rescission prompted those who benefit from the rule, current liquor license holders, to fight to keep the policy alive. MRA members have traditionally supported open markets and fair competition. Accordingly, MRA opposed attempts to codify the rule into law. We made our position clear to the chairman and legislators. The Senate approved legislation, SB 501, that updates the rule to allow using GPS to determine the half-mile radius rather than the current, complicated measuring process. The rule will be rescinded since the legislature
At left and above are detail shots of the Capitol dome. The stars are platinum and gold leaf, and represent Michigan’s unlimited future.
require any additional work for the pharmacy. The real work revolved around striking outdated language in the statute that leaves retailers open to possible litigation when substituting a generic for a namebrand drug. In 2018, we’ll continue working to get pharmaceutical companies and patient advocate groups to support our effort. Supporting free markets and fair competition When the Michigan Liquor Control Commission (MLCC) moved to rescind an archaic and anti-competitive rule referred to as the “half-mile rule,” it set off a flurry of legislative activity and prompted MRA to get involved. The rule, created by the MLCC, prohibits the issuance of a liquor license to a store if another store with a liquor license is located within a half mile. There are several exemptions to the rule. The
did not act before adjourning in December. There is greater opposition to SB 501 in the House, which may consider SB 501 or a similar bill HB 4504 in 2018, but we have heard it is not a priority. Preventing unemployment fraud (Unemployment Insurance Agency reforms) HB 5165-5172, Public Acts 225-232 of 2017 MRA joined a coalition of business groups in supporting legislation that reforms Michigan’s unemployment insurance program. The bills, HB 5165-5172, were the product of a workgroup made up of representatives for both unemployment claimants and employers. The workgroup met to identify reforms after news broke earlier this year that the Agency had falsely accused nearly 48,000 individuals of unemployment Continued on page 11
February 2018
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Continued: Annual Legislative review Continued from page 10
fraud. The bills were seen as a fair, but fragile compromise that addresses issues claimants and employers are currently facing. Among the many reforms, businesses should note there will be a strengthened identity verification process to flag fraud on the front end of the claims process, a timely process for handling imposter claims, and consistent communications regarding employers’ responses to inquiries from the Unemployment Agency. Giving customers more flexibility SB 360, Public Act 165 of 2017 MRA worked with Senator Margaret O’Brien (R-Portage) to allow pharmacists the flexibility to dispense a 90-day or longer supply of medication so long as the prescription allows for enough refills. The new law, which takes effect on Feb. 11, 2018, ensures that pharmacists will not have to call the prescriber for approval as currently required by some insurance plans. Pharmacists will need to consult with the patient prior to dispensing more than a 30-day supply.
In 2018, MRA will focus on these issues: Protect retailers from troubling data security regulations In early 2018, the chairman of the Senate Banking and Financial Institutions Committee, Sen. Darwin Booher (R-Evart), plans to have the committee consider his data breach legislation. Financial institutions including the powerful bankers and credit union associations helped craft the legislation. The bills, SB 632633, seek to require a special notice be provided to financial institutions within three days of a data breach. It would require breached businesses to offer identity theft protection and mitigation services for 12 months to affected individuals. The most troubling requirement in the legislation would allow a financial institution to bring a civil suit against another breached entity to cover costs related to reissuing cards, closing accounts, opening or reopening deposits, refunds or credits made to cardholders, and providing notification. MRA has met with the bill sponsor, committee members, and legislative leaders to share our concerns over the added layer of regulations and requirements. Many are not logistically possible for merchants to perform. Merchants already follow the Payment Card Industry – Data Security Compliance (PCI-DSS) mandates regarding different levels of data security and protection, based on the risk of each transaction. It appears that the real problem the bills seek to address is that the financial institutions are not happy with the
pharmacy members and would apply to all prescription medications, not just opioids. We have identified a bill sponsor to champion the issue through the legislature and are working to finalize language. Several states have passed similar laws. Prescription errors, fake prescriptions, and opioid abuse have dropped in states where the law includes penalties that ensure a majority of physicians are using the system. The legislation is likely to generate some opposition from the prescribing community. MRA is building a coalition of groups supporting the legislation and hopes to make good progress in 2018 towards getting a mandatory e-prescribing law on Michigan’s books. The first floor of the Capitol rotunda.
current agreements with the card networks related to payments and the type and timeliness of notification. MRA is building a coalition of business groups with similar concerns and plans to vigorously oppose the legislation. Stop a potential property tax increase For several years MRA has been fighting back various bills that seeks to increase property taxes by making the appeals process far more difficult. The legislative efforts are in response to local governments’ frustration with retailers who were over-assessed and have successfully appealed their property taxes, resulting in hits to local budgets. While the legislation (HB 4397 & SB 578) did not receive a hearing in 2017, 2019 will result in changes in legislative leadership that could impact the likelihood of this tax increase becoming a reality. MRA will closely monitor this issue in 2018 and watch other states’ actions to prevent retailers from being hit with a large property tax increase to fill local government coffers. Support summer retail tourism The tourism industry and education groups have been at odds for years on the start of the school year. MRA continues to fight proposals that would allow schools to start prior to Labor Day. In 2017, a Senate committee approved legislation and a House committee held several hearings debating the concept. Introduced legislation would restrict school days to Tuesday-Thursday prior to Labor Day. The discussion shifted towards allowing a balanced calendar vs. an agrarian calendar. Legislators were passionate about the topic and it is clear this is just the start of more robust conversations on changing the school calendar. School districts and edu-
cation groups support changing the school calendar while business and tourism groups are opposed. Prevent false opioid prescriptions MRA has been working with members to draft a bill that will prevent fake prescriptions for opioids by requiring all prescriptions be sent electronically to the pharmacy. The bill comes at the request of MRA’s
Limit product regulations In 2017, we saw a lot of legislation regarding drones and fireworks. We anticipate this trend will continue into 2018. We’ve heard there is some legislative interest in giving law enforcement more ability to regulate/ enforce the use of drones particularly around “sensitive areas.” Sensitive areas were somewhat broadly defined in a task force report that came out in November but typically include correctional facilities, law enforcement buildings and critical infrastructure.
We’ve got plans to cover all of yours. Blue Cross Blue Shield of Michigan and Blue Care Network offers the complete insurance solution to protect the overall health and well-being of your employees. For more information, contact the Michigan Retailers Association at 517-372-5656 GROUP HEALTH PLANS | SPECIALTY BENEFITS | BCBSM.COM/EMPLOYERS
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Michigan Retailer
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MRA honors lawmakers MacGregor, VerHeulen for work on tax bill This year, Michigan Retailers Association chose two outstanding friends of retail to receive MRA’s Legislator of the Year awards: Representative Rob VerHeulen (R-Walker) and Senator Peter MacGregor (R-Rockford). Both legislators sponsored bills that became a new law preventing local governments from taxing food or beverages (Public Act 135 of 2018). They were recognized at the January 2018 board meeting for their strong support of the retail industry. Representative Rob VerHeulen is serving his third and final term in the Michigan House of Representatives. He represents a portion of West Michigan’s Kent County including the cities of Walker, Grandville, Rockford and Cedar Springs. Prior to serving in the House, VerHeulen was an attorney for Meijer Inc. and served as the Mayor of Walker. He has earned the Friend of Retail designation or endorsement every year. In fact, he was the only legislator with a 100 percent score on MRA’s voting record last term. His freshman term he sponsored MRA’s Main Street Fairness legislation and worked tirelessly to help push it over the finish line. He and two others were named MRA’s Legislators of the Year in 2015 for that effort. Senator Peter MacGregor was elected in November 2014 to his first term in the Michigan Senate. He previously served four years in the Michigan House of Representatives. In the Senate, he represents a portion of West Michigan’s Kent County including the cities of Cedar Springs, Grandville, Rockford, Walker and Wyoming. Prior to serving in the legislature, MacGregor owned a small business and served as a Cannon Township Planning Commissioner, Township Trustee and Township Supervisor. He was named a Friend of Retail in 2012 and 2014 and has been very supportive of retail.
Above, from left to right, are Amy Drumm, Vice President of Government Affairs; state Sen. Peter MacGregor and Rep. Rob VerHeulen, both named 2017 MRA Legislators of the year; and MRA President and CEO Jim Hallan. At right, the awards given to MacGregor (R-Walker) and VerHeulen (R-Rockford) for helping get a bill passed that prevents municipalities from taxing food and beverages. The awards, at right, were given at the Jan. 30 meeting of the MRA Boards of Directors.
Thanks to all our contributors to the MRA PAC; here’s how you can donate Here’s our honor roll of those who contributed to MRA’s PAC, and in doing so, helped ease regulations and further the cause of retailers as they make their way in a world of online competition, credit card fraud, data breaches and more perils. We thank those who donated in 2017! In 2018, your support means even more during
this crucial election year. You can donate by going to bit.ly/RetailPAC. Please note that state law prohibits the acceptance of corporate credit cards, and that donations of $100 or above require you to list occupation and employer information. MRA is the only PAC dedicated to supporting candidates who understand retail issues. In addi-
tion, MRA will guide you on candidates in your districts who are Friends of Retail. We’re a proven force in Lansing, with big legislative wins, including organized retail creim, item pricing and Main Street Fairness.
BENEFACTOR
Tom Scott, MRA, Okemos D. Larry Sherman, Retired - Sherman Shoes, Inc. Franklin Tom Tuggle, MRA, Williamston
Amy Jolley, MRA, Lansing Becky Beauchine Kulka, Becky Beauchine Kulka Diamonds & Fine Jewelry, Okemos Chris Smith, MRA, East Lansing
Jim Hallan, MRA, East Lansing Orin Mazzoni, Orin Jewelers, Northville Larry Meyer, Retired - MRA, East Lansing Peter Sobelton, Mondial Properties, Birmingham Joe Swanson, Target Corp., Naubinway Jim Walsh, Meijer Inc., Ada
CHAIRMAN’S CIRCLE
Bo Brines, Little Forks Outfitters, Midland Kurt Dettmer, MRA, Macomb Amy Drumm, MRA, Lansing Brian Ducharme, AT&T, Indianapolis, IN Bill Golden, Golden Shoes, Traverse City Bill Hallan, MRA, Okemos Pat Harrington, MRA, Lansing Jeff Joyce, Mieras Family Shoes, Inc., Grand Rapids Dan Marshall, Marshall Music, Lansing Joe McCurry, Credit Card Group, Jefferson, GA Rod Phillips, Country Casuals, Boyne City Burke Sage, MRA, Rockford Jean Sarasin, Retired - MRA, Traverse City
PATRON
Chad Ayers, Allendale True Value, Allendale Ken Hayward, Grand Hotel, Mackinac Island Patrick Kerwin, MRA, Mason Emily Matthews, Capital Region Community Foundation, Lansing Larry Mullins, Brandon Tire & Auto Service Center, Ortonville Ally Nemetz, MRA, Perry William Spreder, Mack Alger Firestone, St. Clair Shores Barb Stein, Great Northern Trading Co., Rockford
EXECUTIVE CLUB
Andrew Gemmen, Gemmen’s Home & Hardware, Hudsonville
MRA: Your champion on retail issues!
CONTRIBUTOR
Jane Allison, Baldwin Lumber, Baldwin John Morgan, J. Morgan LTG, Grand Haven Mary McCourt-Dufina, Loonfeather Gift Shop, Mackinac Island Cheryl Medler, MRA, Lansing Steve Trecha, Integrating Strategies, Inc., Haslett Tom Ungrodt, TDU Consulting, LLC, Ann Arbor Don Baron, Baron’s Window Coverings, East Lansing Philip Elkus, Baron’s Menswear, Farmington Hills Chris Gee, Roll Models, Inc., Allen Park Patty Zaskowski, MRA, Okemos
February 2018
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Gov. Snyder talks jobs, civility and recycling with MRA boards Last month Gov. Rick Snyder visited with MRA’s Boards of Directors to share the items still on his to-do list before he leaves office. The Governor is in his final year before leaving office because of constitutional term limits. During his seven years in office, Snyder has checked off many items on MRA’s wish list: item pricing modernization, business tax reform, organized retail crime, Main Street Fairness, preemption of local policies including wage, benefits and plastic bags. But he made it clear there is still more he hopes to accomplish. For all these efforts, MRA board members greeted the governor with a standing ovation. Near the top of Gov. Snyder’s remaining list are some tough cultural reforms to fill the skilled trades gap by “getting out of our own way.” The governor spoke about changing mindsets to value careers in skilled trades and give students early opportunities to explore those careers. He talked about an initiative to get prisoners trained in computer coding who have jobs before they leave prison. He also said he met a 14-yearold student on a robotics team whose sponsoring company was so impressed that it has hired him as an intern. “Normally we’d say, ‘We’ll train him when he’s 18, 19 or 20’ – rather than saying ‘I don’t care how old you are, what your background is … if you enjoy this work, let’s get you lined up; let’s go!’” Snyder said. “We’ve got all these stereotypes we’ve just got to blow through all that noise and garbage and recog-
nize we need to give these young people an opportunity.” He also spoke passionately about civility in politics and policy discussions. He attributes the many accomplishments and reforms tackled in seven years to his motto of relentless positive action. “I don’t’ believe I’ve criticized anyone in seven years,” Snyder said. “I think it’s a better way to operate and we need to see more of that in our country.”
As a former CPA, fiscal responsibility and long-term planning are critical components of any policy decisions he makes. Before he leaves office, he hopes to see additional investments made in the state’s infrastructure. These investments would look at some of the often-forgotten pieces – expanding access to high speed broadband and repairing water and sewer systems. One of the infrastructure puzzle pieces he recently unveiled looks at
reducing waste by increasing Michigan’s overall recycling rate. This issue is near and dear to retailers who are required to take back bottles and cans under the bottle deposit law. Michigan has one of the lowest recycling rates in the nation at just 15 percent compared to the average of 30 percent. Snyder’s goal is to find a pathway to get to 45 percent or greater and he is open to considering bottle bill changes once that goal is achieved.
Above, Gov. Rick Snyder shares a laugh with MRA boards at its Jan. 30 meeting. At left, Gov. Snyder talks about his goals, including recruiting talent, improving the state’s infrastructure and promoting Michigan as a world leader in mobility. Below, from left to right, are MRA President and CEO Jim Hallan, Gov. Rick Snyder, MRA Board Chair Orin Mazzoni Jr. (Orin Jewelers, Northville and Garden City), and Retailers Insurance Co. Chair Jeff Joyce (Mieras Family Shoes, Grand Rapids).
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Michigan Retailer
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IRS gives employers extension to file ACA-required form
By Ally Nemetz, Director, Customer Service and Data Administration The IRS has extended the deadline to March 2 for insurance carriers and employers with self-funded health insurance plans to send IRA Form 1095 to employees. The original deadline was Jan. 31, so this gives employers another month to prepare and send the tax form, which is required by the Affordable Care Act, or Obamacare. It must be sent to full-time employees (those who work an average of 30 or more hours per week) or to employees who were enrolled in a health plan for any month in 2017. Although we are in the third year of this requirement, there are still many employees who are unfamiliar with the IRS Form 1095. If you have any questions, please contact Ally Nemetz at (800) 366.3699, ext. 350. New individual IRS requirement for reporting health coverage Beginning with the 2018 reporting year, the IRS will not accept individuals’ returns if they are missing the health
coverage information on their 2017 federal tax returns. In October 2017, the Internal Revenue Service (IRS) released guidance that individuals must now answer questions about health coverage on their federal tax return. For the 2018 reporting year, individuals must indicate whether they had: • Minimum essential coverage (MEC) for the year; • Qualified for an exemption from having health coverage; or • Are paying the individual sharedresponsibility payment. The 2017 tax year is the first time the IRS will not accept tax returns that do not include the above information. If individuals do not provide the information: • Electronic returns will not be accepted until the information is provided. • Paper returns may be suspended and any refund delayed until the IRS receives the additional information. Employers may want to make sure their employees are aware of their need to fully complete their tax return with the MEC information. Although those filing taxes are not required to attach the 1095
Form to their federal tax return, it is possible the employee or tax preparer will be looking for the 1095-B or 1095-C form to prepare their tax return. There is a line on the 1040 Tax Return, line 61 and line 11 on the 1040EZ Form, that will ask about health care. This is also known as Individual Shared Responsibility Provision. As mentioned above, your tax preparer may ask you for a copy of your 1095 Form. It is not necessary to send the IRS a copy of your 1095 Form along with your tax papers. You can file your taxes at any time even if you haven’t yet received your 1095 Form. Just make sure to properly answer the Individual Responsibility question.
2018 changes that af fect small groups Under new guidelines in the Affordable Care Act, the age band rating for children, which affects premiums, has been changed from 0-18 to 0-14. This change was made to better reflect the health risk of children, which affects the rates, and to provide a more gradual transition as children age. What this means to you: • In 2018, there will be one age band for children between ages 0-14. • After age 14, there will be single-year age bands that have increasing age factors until an individual reaches age 21, at which time the age factor is 1. The change took effect Jan. 1 for new groups or will start at your 2018 rate-renewal.
February 2018
15
LOTTERY
Club Keno Extra expected to generate player excitement, boost sales By Aric Nesbitt, Commissioner The Michigan Lotter y’s Club Keno game enjoys one of the most avid and loyal player followings of any Lotter y game, capturing nearly 20 percent of total player purchases. The game’s popularity comes from the variety of play options it offers players, strong prize structure, plus its social aspect. Beginning Feb. 18, players will have one more way to play one of the Lottery’s most popular games with the introduction of Club Keno Extra. For $1 more per $1 wagered on Club Keno, players will have another chance to win with their Club Keno numbers, in the Extra drawing. Extra drawings occur after each Club Keno drawing. Ten Extra numbers are selected from the remaining 60 Club Keno numbers. Players will match their numbers to the numbers selected in the Club Keno drawing and Extra drawing. Players can win prizes for matching numbers in both drawings. Numbers from the Club Keno drawing and Extra drawing may not be combined for a higher prize. With prizes ranging up to $500,000 on a $1 Extra wager, we expect the new Club Keno Extra add-on game to excite players and increase play and sales for retailers. Retailers also will benefit from additional redemption commission opportunities. Club Keno has been a favorite with players since it launched in October 2003. We expect the Club Keno Extra game to create a new level of excitement for players and boost sales and commissions for retailers. Michigan Lottery Launching New Website; Spin-To-Win Daily Giveaway The Michigan Lottery is unveiling an updated website and new Spin-To-Win daily giveaway that will make earning free play easier than ever for players. Players who visit MichiganLottery. com will find a new and improved website. The updated site will be easier for players to navigate, and will make playing online games easier than ever. In addition to a new look, MichiganLottery.com also will offer players a new way to earn free play and other great prizes daily. Players may visit MichiganLottery.com daily and log in to play a Spin-To-Win game that will award prizes, including: free play coupons, special online game offers, and entries into monthly drawings. Play-
ers may play the Spin-To-Win game once daily. Players who do not have a Lottery online account must sign up for one at MichiganLottery.com. NEW INSTANT TICKETS: These tickets go on sale Feb. 6: IG 246 - Sizzlin’ Wild Time - $2 IG 251 - Instant Keno - $5 IG 237 - $150,000,000 Payout - $30 INSTANT GAMES SET TO EXPIRE: Feb. 5 IG 757 - Triple 777 - $1 IG 759 - Caesars Jackpot - $5 IG 766 - $500 Grand Cashword - $10 IG 768 - Beginners Luck - $1 March 5 IG 743 - Emerald Green 7’s - $2 IG 760 - Bonus Ball Bingo - $3 IG 761 - $2,000,000 Bonus - $20 NEW PULL TABS TICKETS: These tickets go on sale Feb. 6: MI 519 - Coin Quest - $.50 MI 521 - Bankroll Riches - $2 PULL TABS GAMES SET TO EXPIRE: Feb. 12 MI 579 - Cherry Up - $.50 MI 580 - Hot Cash - $1 Feb. 13 MI 581 - Money Machine - $1 MI 561 - Fast Cash - $.50 March 13 IT 867 - Lucky Spot - $1 MI 562 - Greenback Stash - $1 MI 570 - Slot Crazy - $.50 MI 572 - Wild Vegas - $1 March 20 MI 577 - Deer Hunter - $.50 MI 583 - Max Money - $2 MI 586 - Jackpot 777 - $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.
Credit card processing updates by Penny Sierakowski, Manager, Customer Service Department Processing Updates If you haven’t upgraded your device to accept/process Chip cards, we strongly recommend you upgrade soon. Call customer service (800.563.5981) to discuss upgrade options. 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 notify customer service if you have changes to your bank account, ownership or Tax ID. Fraud Control If you detect suspicious/fraudulent transactions, call 800.563.5981 option 2 to flag them. Terminal functions that assist with fraud control: • Process with a terminal/device that is chip card-enabled. • Address Verification (AVS) requires the street number and zip code. If it doesn’t match the credit card, you will receive a mismatch response and be prompted to proceed. You have the option to cancel the transaction. • Security Code Verification (CVV) requires the 3-digit code on the back of the credit card. If it doesn’t match
the credit card, you will receive a mismatch response and be prompted to proceed. You have the option to cancel the transaction. • Password Protection requires a password for all returns, reversals, force capture, store/forward, reports, etc. • Fraud Control, when enabled, will prompt for the last four digits of the credit card to be verified. If incorrect, the prompt will state invalid card number. • Verify the credit card receipt to make sure the customer name and credit card number on the front of the card are identical to what’s on the printed credit card receipt. If not, call 800.563.5981 option 4 and say “CODE 10.” 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 (800.563.5981) for upgrade options.
W E N
!
ANOTHER CHANCE FOR CLUB KENO PLAYERS TO WIN EVEN MORE!
10 EXTRA WINNING NUMBERS AFTER EACH CLUB KENO DRAWING! ASK YOUR LOTTERY SALES REPRESENTATIVE FOR MORE DETAILS ABOUT THIS GREAT NEW CLUB KENO ADD-ON GAME.