June 13 Michigan Retailer

2

Caught in Gridlock

Despite strong, bipartisan support for leveling the retail playing field, Main Street Fairness legislation got caught in political gridlock.

Page 2

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Smiling Retailers

A former retailer puts together a crash course in book form on how amazing customer service really can boost sales.

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Guide to Contracts

Contracts may be boring and confusing, but this quick guide can help you with the basics to protect your business.

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® June 2013 Vol. 38 No. 3

Retail organization takes on challenge of industry’s image A national organization is taking on the challenge of transforming the image of the retail industry – especially among young people looking for careers.

“Our industry has a perception problem – and we need to address it head on,” said Matthew Shay, president and CEO of the National Retail Federation (NRF) in Washington, D.C. Shay said a new NRF campaign called “This is Retail: Careers, Community, Innovation” is designed to “counter the myths about our industry with research and stories that show the true face of retail. That, in fact, retail offers richly rewarding and diverse career opportunities, is central to communities, big and small, and that retail is at the forefront of innovation.”

He added, “By fundamentally transforming the perception of retail, we will ensure the industry continues to thrive and grow.”

New Research Shay announced the campaign in April, along with new research showing what young adults are looking for in a job.

In general, the research shows that the average young adult values aspects of community, innovation and prosperous career opportunities when considering a company as a potential employer, according to NRF. One-quarter (25.3%) of 18-24 year olds say companies whose mission and values match their own is important to them when considering a future employer, and about 1 in 5 (18.2%) says that having a reputation for giving back to the community is important.

Continued on page 5

The official publication of the Michigan Retailers Association

SM

www.retailers.com

Buy Nearby teams with Pure Michigan The Buy Nearby campaign launched this spring by Michigan Retailers Association is partnering with Pure Michigan to help shoppers across the state find the goods and services they’re seeking.

MRA is working with the state’s Pure Michigan Business Connect program to put together a searchable

database that will enable shoppers to identify retailers offering the merchandise and services they want to find.

The online database is expected to be completed by mid-summer and become the first retail search engine of

Birmingham’s active PSD attracts shoppers, stores

its kind in Michigan or any other state.

“We’re encouraging consumers to buy nearby at Michigan retailers, so it only makes sense for us to help shoppers find the stores that offer what they’re looking for,” said MRA’s James P. Hallan, president and CEO. “It’s an exciting project.”

Pure Michigan The new retail database will be an offshoot of the existing Pure Michigan Business Connect search engine that enables Michigan companies to find other Michigan companies to serve as suppliers and customers, according to Vince Nystrom, Michigan Economic Development Corporation (MEDC) vice president strategic accounts.

The Pure Michigan Business Connect program is part of the MEDC, the state’s primary economic development agency. Nystrom oversees the program.

“The purpose is to connect Michigan companies with opportunities to help them grow and expand,” Nystrom said. “Although it is a business-to-business site, by partnering Continued on page 6

Rachael A-Woods, Birmingham PSD board member and owner of ArtLoft, shows new merchandise to John Heiney, executive director of the Birmingham PSD.

by Doug Henze It’s no secret that running a retail business can be all-consuming.

Ordering inventory, getting employees on track, taking care of customers and attending to the hundreds of other things that pop up in a day leave little time for promoting the company. But without it, how will the business thrive?

For Birmingham retailers, the solution has been the efforts of the

Birmingham Principal Shopping District leadership. Roughly similar to a Downtown Development Authority, but focused only on the downtown and adjacent business districts, the PSD aims to steer foot traffic to member merchants using events and promotions.

“When you’re running a business, you don’t always have time to think of all the things that can make you successful,” said Rachael A-Woods, a Birmingham PSD board member and owner of ArtLoft, a 16-year-old boutique that sells clothing, jewelry and other items. “The PSD is just a wonderful way to support the businesses and create traffic.”

Continued on page 5

Benefits boosted for dental plans Coverage has been increased for two benefits in Retailers Mutual’s dental insurance plans, which are administered

by Delta Dental of Michigan.

Effective July 1, sealants will be a covered benefit under both plans.

In addition, the lifetime maximum for Orthodontics coverage in Plan A has been increased to $1,500 from $1,250.

Open enrollment in the dental, health and vision benefits plans is currently underway.

The open enrollment period is the time to sign up for these membership services or add or delete members of a group. Members also can make any benefit changes.

Members can contact MRA at 800.366.3699, ext. 681. for information or make changes.

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Michigan Retailer

Keep the calls, emails coming

Board of Directors: Thomas Ungrodt Chair Ideation, Ann Arbor

by James P. Hallan, MRA President and Chief Executive Officer At times, the legislative process can be exhilarating. At others, downright disappointing. The first week of June was the latter, one of the times when common sense vanished into thin air.

The Michigan House Tax Policy Committee was set to vote on our Main Street Fairness initiative on June 5, but abruptly changed course just prior to its meeting. Our issue got caught in the political crossfire between the political parties over the state budget and other issues not of our making.

The committee chairman wisely put off a vote until the politics could be sorted out and cooler heads prevail.

Price Disadvantage Let’s recall what the bills do. They simply say that all retailers must collect sales tax at the time of sale.

As we all know too well, pure

Internet retailers from outside Michigan do not have to collect sales tax, giving them an unfair pricing advantage. Thus, retailers that have built in Michigan, invested in Michigan and employ Michigan residents are at a 6 percent disadvantage when compared to an Internet retailer like Amazon.

Looking at the big picture, it defies logic that the Michigan Legislature is hesitant to protect those of you who create Michigan jobs.

House Bills 4202-4203, introduced

by Rep. Eileen Kowall and Rep. Rob VerHeulen, would level the playing field for everyone. The bills have broad-based, bipartisan support, including: Michigan Chamber of Commerce, Michigan Education Association, Michigan Grocers Association, Michigan Small and Rural Schools Association, Michigan Association of School Boards, Michigan

New employees add to MRA depth MRA has hired business professional and local resident Katie Jensen as the key contact for businesses in Northern Michigan and the Upper Peninsula.

Jensen, of Harbor Springs, began her new position as MRA business development representative for Northern Michigan and the U.P. on June 3. She succeeds John Leahy, who left to pursue a career in another industry.

Katie Jensen

Connie Minster

Jensen previously was Northern Michigan and U.P. district manager for workforce solutions company Kelly Services, Inc. She also has retail experience in Petoskey, is a former national account executive for a software company and was an insurance agent in Colorado.

“Katie Jensen brings more than 20 years of successful sales, account management and business development and retention experience to her new capacity with Michigan

Retailers,” said President and CEO James P. Hallan. “It’s also important to note that she has lived and worked in Northern Michigan for nearly 15 years, so she fully understands the unique characteristics and needs of businesses in that region.”

Other Changes Connie Minster joined MRA’s customer service department as a representative last fall.

Dora Serna

Laura Schilling

Her daily duties include troubleshooting members’ problems and helping merchants with their credit card terminals, as well as answering questions on pricing and statements.

She previously was a technical support technician and coordinator of the technology help desk at Northwestern Michigan College in Traverse City. She also worked part-time in retail for three years.

In addition, two existing MRA emContinued on page 6

www.retailers.com

School Administrators, Michigan Townships Association, many local chambers of commerce and small and large retailers alike.

The list goes on and on. Yet the bills remain gridlocked in committee.

Simple Reasons The bills have such broad support for two simple reasons.

The first is that 73 percent of the sales tax goes to support public schools, and failure to act is leaving money – uncollected taxes that are legally due – on the table while schools are struggling financially.

The second is that the business community cannot understand why we as a state continue to give favored treatment to out-of-state Internet retailers that have not invested in Michigan. Our brick-and-mortar retailers cannot survive if they are only showrooms for the Amazons of the world.

Bold, positive action on this issue would be refreshing and is long overdue.

Every reader of this article should call or write his or her representative and demand action, or at least politely ask why lawmakers are allowing politics to trump good public policy. Please make the call or send the email and make it clear this is an issue of retail survival.

Personal Notes Allow me to close on a couple of personal notes.

Michigan lost a great friend and wonderful ambassador in April.

R.D. Musser, chairman emeritus of Grand Hotel, passed away after a short illness.

Retail and tourism are closely intertwined, and Mr. Musser put Mackinac Island on the map by creating a magical retreat for family, conventions and political events.

He was a pioneer in the hospitality industry, and the entire retail community will miss his friendship and leadership. I’m honored to have counted him as a friend.

On another, happier note, our youngest daughter got married this past weekend on a beautiful, crystal clear, Pure Michigan day in June.

She’s the third and final child…whew!

We couldn’t be happier, as she married a very fine young man and they will be living and working in Michigan.

James P. Hallan

President and CEO Michigan Retailers Association

Dan Marshall

Vice Chair Marshall Music Company, Lansing

Peter R. Sobelton Treasurer Birmingham

Jean Sarasin

Secretary Michigan Retailers Association

Barb Stein

Past Chair Great Northern Trading Co., Rockford

Brian Ducharme AT&T

Becky Beauchine Kulka

Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos

Orin Mazzoni, Jr.

Orin Jewelers, Garden City

Joseph McCurry

Credit Card Group

Larry Mullins

Brandon Tire & Battery, Ortonville

R.D. (Dan) Musser III

Grand Hotel, Mackinac Island

Joe Swanson Target Corp.

James Walsh

Meijer, Inc., Grand Rapids

D. Larry Sherman

Board Member Emeritus

Michigan Retailers Services, Inc. Board of Directors: Bo Brines Little Forks Outfitters, Midland

Bill Golden

Golden Shoes, Traverse City

Lisa McCalpine-Wittenmyer Walgreens

James P. Hallan Thomas B. Scott Publisher

Editor

Pat Kerwin

Design Manager

Publication Office: 603 South Washington Avenue Lansing, MI 48933 517.372.5656 or 800.366.3699 Fax: 517.372.1303 www.retailers.com www.retailersmutual.com

Subscriptions:

Michigan Retailer (USPS 345-780, ISSN 0889-0439) is published in February, April, June, August, October and December for $20 per year by Michigan Retailers Association, 603 South Washington Ave., Lansing, MI 48933. Subscription fees are automatically included in the Michigan Retailers Asociation membership dues. Periodical postage paid at Lansing, Michigan. POSTMASTER: Send address changes to 603 South Washington Ave., Lansing, MI 48933. The Michigan Retailer may be recycled with other white office paper.

June 2013

3

MICHIGAN RETAIL INDEX

Retail sales and forecasts rebounding in spring industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 59 percent of retailers expect sales during May–July to increase over the same period last year, while 10 percent project a decrease and 31 percent no change.

Current

That puts the seasonally adjusted outlook index at 68.1, up from 66.8 in March. A year ago April it stood at 69.2.

At the national level, April retail sales excluding autos, gasoline and building materials increased as well, rising 0.5 percent, according to the U.S. Commerce Department.

Michigan sales tax receipts totaled $610.2 million in April, 3.3 percent

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Performance Index

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80

70

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60

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50

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more than in April 2012. On a yearto-date basis, sales tax collections are up 1.1 percent from last year.

Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www. retailers.com/mra/news/michiganretail-index.html. The website includes figures dating back to July 1994.

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Outlook Index

80

11-12

2012

2013

700 600 500

591 512 522

537 531

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610

400 300

APR

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Michigan’s retail industry bounced back in April after two months of subpar performance, and expectations were for continued improvement for the rest of the spring and early summer. That’s according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

“Two months of job gains, lower gasoline prices and consumers itching for spring offset the effects of April’s poor weather and the drag of higher payroll taxes,” said Tom Scott, MRA senior vice president communications and marketing.

“May’s warm weather should encourage consumers to continue spending at a good clip.”

The April Michigan Retail Index found that 46 percent of retailers increased sales over the same month last year, while 34 percent recorded declines and 20 percent saw no change. The results create a seasonally adjusted performance index of 54.0, up from 47.8 in March. A year ago April it was 52.6.

The Index gauges the perfor mance of the state’s overall retail

Seasonally adjusted diffusion index, calculated by adding the percent of respondents indicating increased sales and half the percent indicating no change, and then seasonally adjusting the result using the U.S. Census Bureau’s X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.

200 (millions)

Apr

Be sure to complete your online survey each month!

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Michigan Retailer

www.retailers.com

Annual legislative reception draws a crowd MRA hosted its annual legislative reception on April 23 to help foster positive relationships between the retail industry and Michigan lawmakers.

Dozens of state senators, representatives and legislative aides attended the late afternoon event, which was held next door to the Capitol in the offices of the Dykema law firm. Many Michigan Retailers board members participated, as did government affairs representatives of several MRA members.

MRA President and CEO James P. Hallan, Rep. Lisa Posthumus Lyons, Rep. Wayne Schmidt.

Photos by Dave Trumpie of Trumpie Photography.

Sen. Jack Brandenburg, Larry Meyer, Sen. Roger Kahn.

Dykema attorneys Alan Wilk and William Perrone and Jim Hallan watch a Buy Nearby video on display at the reception.

MRA Board member Orin Mazzoni, Jr. and Amy Frankmann of MNLA.

Target's Tim Elhert, Rep. Joel Johnson, Rep. Phil Potvin, Rep. Joe Graves.

Sen. Geoff Hansen, Amway's Dirk Bloemendaal.

June 2013

5

Why I wrote Smile, a crash course for retailers

by Kirt Manecke

The other day I walked into a local retail shop and, as often happens in many stores, nobody greeted me.

From my experience, this occurs far too often.

I wrote Smile: Sell More with Amazing Customer Service because I see a critical need. According to Consumer Reports, two in three customers have walked out of a store because of poor customer service.

Clearly, many retailers and their staffs can benefit from customer service and sales training. But many do not have the time or cannot afford expensive programs. Smile is an affordable solution to a big problem.

In the spirit of books like The One Minute Manager, my book can be read in 60 minutes or less. I know this because I gave test readers the manuscript and timed them. My book is a crash course in customer service and sales. This means: 1) your staff will actually read it, and 2) they can start today.

Where did the idea for Smile come from? Early in my career, I opened a specialty sporting goods store in Oakland

County. Critical to the store’s success was a six-week training program I created. Employees gained confidence, shoppers became buyers and ambassadors, and the store saw record sales.

T h i s p ro g r a m eventually became Smile.

Awards The book was published in December 2012, and so far I am more than pleased with the results.

Kirt Manecke Smile has won six awards and is being featured in the July issue of STORES magazine published by the National Retail Federation.

One auto dealer, Thad Szott of Thad Szott Auto Group in southeast Michigan, purchased 30 books, one for each of his staff. “We chose Smile as a major component of our core training,” he said.

A restaurant owner in Detroit’s Greektown reported that after one of

Retail organization takes on challenge Continued from page 1

Additionally, nearly two in five (38.9%) say that learning a new or innovative technology is an experience and skill they’d want to gain at their first “real” job.

“Retail offers what young adults value in a career – yet too few are buying into the opportunities that exist; we want retail to be the first place young adults shop for a career,” said Shay.

“Retail helps push boundaries in innovation, it brings good to people across the world through charitable actions, it is the foundation of every Main Street in America, and it offers life-long careers in areas such as real estate, software development, private investigating and even animal training and photography. “‘This is Retail’ is about telling that story.”

Jobs Board As part of the overall campaign, NRF announced in June the launch of an online service to help retailers and job seekers.

Retail Jobs powered by NRF, located at jobs.nrf.com, will provide retail companies the opportunity to showcase the assortment of positions they have available.

In addition to job board postings, employers have an opportunity to have their jobs featured in daily emails to thousands of retail professionals via NRF and Shop.org SmartBriefs.

Students looking for entry-level po-

sitions for a career in retail, as well as retail professionals and all other job seekers, can post resumes directly to the site for employers to search.

Job seekers will benefit from the targeted opportunities available and the option to post an anonymous resume for retailers to view.

Additional information on the job board is available from the NRF Foundation at 202.783.7971.

“Whether in stores or corporate headquarters, retail offers incredible careers in fields like marketing, finance, technology, loss prevention, merchandising and management,” said NRF Foundation Executive Director Ellen Davis. “Retail Jobs powered

by NRF is tangible proof that our industry offers diverse and unique career paths for some of the world’s most recognizable brands.”

Retail Stories The campaign’s website at thisisretail.org also includes: • Original content, including a creative slideshow of the “most weirdly awesome” retail jobs and a careers road map that helps candidates decide which area of retail suits their skill set best.

• Personal stories from retailers and industry partners highlighting careers, community and innovation with a focus on how working within the retail industry has impacted them personally and professionally.

his waitresses read Smile, a customer hugged her and gave her a $20 tip, the biggest she’d ever received for breakfast.

Ken Snook, of Colasanti’s Market

in Highland, says, “Every staff member who works in the store, including myself, is responsible for reading Smile. We want everyone to understand how important it is to do as the book recommends.”

Recently, I was visiting a gift shop that carries my book. An employee asked a customer, “How can I help you?” I thought to myself, “Nicely done.” It turns out, the employee, a teacher who never worked retail, was

filling in for the owner.

I complemented her on her great customer service and sales skills. “I learned that from your book,” she said.

“In fact, I learned a lot of other techniques I am using every day.” She gave me the thumbs up and said “It works!”

When you provide your staff with the right techniques and positive examples, your sales will soar. Ultimately, happy customers spend more money.

Excerpt from Smile: When the Phone Rings While You’re with a Customer If you need to answer the phone while you’re busy with a customer, put your current customer first.

Here’s how: 1. Excuse yourself with your current customer before you answer the phone.

2. Thank the person who’s calling for contacting you and politely explain that you’re already helping a customer or client.

3. Ask for the caller’s name and phone number and repeat the number to verify that you’ve written it down correctly.

Smile: Sell More with Amazing Customer Service is available for $15.99 at www.SmiletheBook. com, by calling 248.685.0483, at Casa De Amici gift store inside Colasanti’s Market in Highland, and at Main Street Art in downtown Milford.

Birmingham’s active PSD attracts shoppers Continued from page 1

Funding PSDs are rooted in 1960s Michigan legislation that created a mechanism for funding trash cleanup and physical improvements to downtowns, said John Heiney, executive director of the Birmingham PSD. Wanting more focus on marketing and special events in order to compete with neighboring malls, Birmingham merchants brought the issue to the attention of Michigan Retailers Association, and together they worked with state legislators to improve the law.

“The Birmingham PSD was the first of its kind in Michigan,” Heiney said of the entity, which began operation in 1992. Other cities with PSDs include Lansing, Holland, Rochester and Plymouth.

Birmingham’s PSD, which includes 1.5 million square feet of retail space and 2.2 million square feet of nonretail space, was born out of merchants’ concern that the expanding Somerset

Mall in Troy would bring increased competition, according to Heiney.

“They felt like they had to step it up,” he said. “They were tired of passing the hat around when they needed money.”

Businesses in the PSD pay a fee based on their location. A first-floor merchant in Birmingham’s downtown pays the highest rate – 50 cents a square foot – while businesses outside the central business district and not on the first floor are assessed the lowest amount, 9 cents a square foot.

“We think 50 cents per square foot is a deal,” Heiney said, adding that upscale malls charge many times that for common area maintenance.

Big Events For their money, the 600 businesses in the PSD – half of them restaurants, salons and retailers and the other half office users – get group advertising Continued on page 8

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Michigan Retailer

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Buy Nearby campaign teams with Pure Michigan Continued from page 1

with MRA’s Buy Nearby campaign on a consumer-oriented retail search engine we can provide another good way to help retail businesses boost sales and expand.”

“Local retailers bring vibrancy to our downtowns, strengthen our

addition to basic information such as store name, address and contact information, a retailer will be able to input numerous keywords regarding the products that store carries, including specific brands.

When a consumer searches for any

Retailers interested in being included in the searchable retail database can contact MRA’s Laura Schilling at lschilling@retailers. com or 800.366.3699 ext. 313 to be notified as soon as the project is up and running.

On that first October Saturday, advertising and media attention will focus on shoppers visiting nearby communities and retail stores. Communities, downtowns and retailers will be encouraged to offer special promotions, events and incentives to make it a big local shopping day.

and build upon the growing number of shop-local and buy-Michigan efforts taking place across Michigan, said Hallan.

“We believe there is growing awareness of the importance of buying nearby. For every $100 spent at a local store, $43 to $68 goes back into

MRA Board Chair Tom Ungrodt, Past Chair Barb Stein and President and CEO James P. Hallan have fun with forming the Michigan map with their blue hands.

ability to attract and retain young professionals, and help grow our communities,” said MEDC Community Development Director Katharine Czarnecki. “Expanding the Business Connect program across the retail and consumer sectors continues MEDC’s commitment to driving further private investment and job growth in Michigan communities.”

Hallan added, “Part of Buy Nearby’s goal is to bring a ‘Pure Michigan’ feeling and sense of pride to shopping locally and throughout the state. So partnering with the business side of Pure Michigan is a natural.”

Retailer Participation Once the database is up and running, retailers can enter their own information, Nystrom explained. In

of those keywords or combinations of keywords, that retailer’s store will come up in the search results.

The database also will allow each retailer to post – and change on a regular basis – a special offer for shoppers.

Participation is voluntary and there is no charge for becoming part of the database. Retail stores that don’t participate can’t come up in any search results, because their information won’t be in the database.

Barb Stein makes a point that Buy Nearby will help local retailers and their communities.

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

New employees add to MRA depth Continued from page 2

ployees have changed posts.

Communications Coordinator Laura Schilling accepted the new position of Associate Underwriter for Retailers Mutual Insurance Company last December. Her new duties include assisting the underwriting department with new business quotes and policy renewals, along with managing records for Retailers Mutual’s independent agents.

Schilling retains some of her former responsibilities from the communications department as well. She joined MRA in 2006 after graduating from Michigan State University.

New Voice In March, Customer Service Representative Dora Serna accepted the position of MRA receptionist following Ruszella Slates’ retirement after 19 years.

Members who call in to MRA will now be greeted by the friendly voice of Serna, who will then direct them to the appropriate department.

Serna worked in the customer service department since she started at MRA in 2001 and is comfortable and familiar helping members. “I will miss being a part of the customer service team at MRA, but I am excited to be taking over as receptionist,” she said.

Tom Ungrodt explains that Buy Nearby will build upon and strengthen local communities’ existing efforts.

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

Special gift bags, banners, window decorations and other promotional items to be made available for purchase by the Buy Nearby campaign are designed to make the day a festive one.

Local Efforts Buy Nearby is intended to support

the local economy,” he said.

“Retail is responsible for more than 850,000 jobs in this state, and we don’t want to see more of those jobs and wages sent out of state to online retailers that don’t have any presence or investment here.”

Additional information will be provided to MRA members and other retailers as it becomes available. Resources will be provided through the retail toolkit on the Buy Nearby regular website, BuyNearbyMI.com/toolkit.

June 2013

7

RETAIL TECHNOLOGY NEWS

‘BYOD’ is the latest thing, but look before you jump John Mayleben CPP, is MRA senior vice president technology and new product development and a national expert on electronic payment processing. He is the first person in Michigan and among the first in the nation to receive the Certified Payments Professional designation from the national Electronic Transactions Association.

Most of us have heard of BYOB, a popular acronym for Bring Your Own Bottle. The big new thing in the credit card processing arena appears to be BYOD – Bring

Your Own Device.

Bringing your own smart phone, tablet or other mobile device into the part of your business that accepts credit and debit cards for payments sounds like a good way to extend your card processing capabilities into a delivery or service vehicle or even a busy checkout line.

But there are a number of pitfalls to this low-cost strategy.

Far too many, in my opinion, to adopt BYOD blindly.

rently using or planning to deploy a smart phone solution, it is critical that you review these standards and make sure your policies and procedures match the minimum required.

These can be downloaded from the PCI Council’s website (https:// www.pcisecuritystandards.org/ documents).

Many Questions Most of the standards discussed in that document relate to controlling the data or the device. If you allow BYOD in your business, you are, in effect, allowing the sales person, service person or delivery driver to load

“There are a number of pitfalls to this low-cost strategy.”

Protect Data As all merchants should know, protecting card data is not only a requirement of the card brands (Visa/MasterCard) but also state and federal law. The penalties for a data breach are so significant that at Michigan Retailers Association we automatically provide $100,000 in data breach insurance to each merchant using our system for processing their transactions.

But with the pervasive use of smart phones and the development of smart phone merchant processing solutions by vendors (including MRA), more and more businesses are seeing opportunities to extend the ability to “swipe” a card (and benefit from the lower rates of face-to-face transactions) and get out from behind their current fixed, in-store, credit card terminal.

They do that by downloading an app from the web that turns a smart phone into a credit card processing device.

If your processor has a smart phone solution that you think would benefit your business, you should develop a procedure for who and where/when this solution can be used.

The PCI Security Council has just released standards for mobile phone merchant processing. If you are cur-

your credit card terminal onto their mobile device.

Even if you presume that this is okay for the workday, what happens when they leave for the day?

What happens on their day off?

What happens if they are no longer employed by your business? What happens if they lose their phone?

And don’t tell you?

To repeat, a BYOD situation creates too many opportunities to compromise your customers’ card data. And compromising your customers’ data should be avoided at all costs.

With the evolution of this industry, the need for a low-cost smart phone solution is starting to be filled. At least one terminal service provider has developed a smart phone (data only) solution that is designed to scale up and down as your business needs change and evolve. This solution is provided without the usual cost from the cellular networks or the typical two-year contract for a cell phone.

You, as the “owner” of the merchant account, need to make sure that you look before you jump into this new payment space.

If you have any questions about this or any other merchant processing issue, please don’t hesitate to contact us here at Michigan Retailers Association. It’s always better with an expert to help guide you through the process.

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Michigan Retailer

JCP deserves fresh look

by Steve Flaster

When an American retailer has served the public well for more than 100 years, it should not lightly be thrown to the wolves. Such is the case with JC Penney, or JCP as it started calling itself recently.

Yes, Penney’s has made some big mistakes, but it has been wise enough to realize the perilous path down which it was headed. It has called back its former leader to readdress and correct the situation, much as Starbuck’s successfully did with Howard Schultz.

Penney’s most recent television commercials get your attention in a good way. They are understandable, address recent mistakes and ask customers to give the store another look.

All of this says good things about the new top management team and attitude. I, for one, responded by opening my first JC Penney charge account.

I like the new men’s sportswear being produced under the JCP label and think the rewards and loyalty program is very generous to customers.

I hope to use my Penney’s account for many years to come.

Change But Don’t Change Change is the one constant thing about retailing. However, retailers need to be careful about what they change, and this is where Penney’s got into trouble. It tried to change things that customers liked about shopping at Penney’s, namely coupons and frequent sales. The most loyal customers responded by deserting the store in droves.

As an old saying goes, if it is not broken, don’t fix it. But Penney’s is not the first large organization to do such a thing. In the 1980s Coke changed the taste that its custom-

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ers liked. Customers responded by pouring “new” coke into the streets.

Management changed back, and everybody was happy. Here’s hoping so will it be for JC Penney.

In addition to being careful about what we change, there are three key lessons that all retailers can learn from the Penney’s experience.

1. The same strategy doesn’t necessarily work for different target markets. The “new” strategy for Penney’s was based on a strategy that had worked in a different store with a different target market. What’s good for one store and one market is not necessarily good for another.

2. Ask Your Customers. The best way to know what to do to improve your business is to ask your customers. They are the ones whose response will make or break you.

They will tell you what to change and what not to change. They will also tell you which of the changes you have made are good ones and should not be changed back.

3. Test Things. The idea of full steam ahead generally is not wise. Even if something sounds great, give selected markets and stores the chance to tell you if you are right. Better to be wrong in one market than nationwide.

Remember Your Roots Penney’s got into trouble by becoming distant from its customers, but that’s not how the company traditionally acted. Ironically, Penney’s once had an organizational structure that stayed close to its customers by having separate buyers in each store.

While this proved to be cost inefficient, distancing itself from its customers and customer input almost proved perilous. Let’s hope Penney’s is now headed back in the right direction and will organize focus groups and other astute strategies to get needed customer input.

The American people are very generous and forgiving. We like people to acknowledge when they have made mistakes, and we are very much inclined to give them another chance when they are honest with us. We should all wish Mike Ullman great success.

I expect he will speak out to us and include our ideas and input in his plans.

I hope I speak for thousands, if not millions, in saying that I would hate to lose my JC Penney bonus points. Let’s give JCP another look and another chance.

JC Penney deserves it.

Steve Flaster is a retailer, instructor of retailing and marketing at Michigan State University, speaker and consultant. You can reach him by email at srflaster@gmail.com.

www.retailers.com

Birmingham’s active PSD attracts shoppers Continued from page 5

buys, social media coverage, a newsletter, downtown maintenance and a host of events designed to bring them customers.

In February there’s a restaurant week when affordable meals bring in diners and shoppers. From May through October, the PSD hosts a farmers’ market.

Other events include summer mov-

publish the glossy Bir mingham Magazine, which goes to several thousand households.

Snow removal in the winter and beautification in the summer, including the hanging of 200 flower baskets downtown, are also PSD functions.

Business Recruitment “We also actively recruit businesses,” Heiney said. “We have a list of available properties in the downtown.”

R e c e n t l y, t h e P S D brought in athletic apparel seller Lululemon and Paper Source, a stationery dealer.

It’s part of the battle PSD leaders have been fighting since downtown anchor Jacobson’s closed its two stores in 2002 – creating 100,000 square feet of “dark” space. PostJacobson’s, the downtown bottomed out at an 87 percent occupancy rate.

Even with the commercial real estate market still sluggish from the Great Recession, that rate has risen to 97 percent, Heiney said.

That’s partly due to the 2009 hiring of leasing consultant Julie Fielder, a former Taubman Centers veteran who helped recruit national retailers, and to the city’s affluent population.

“Last year alone we filled dozens of vacant spaces,” Heiney said. “If you walk downtown, you see an active, vibrant downtown with very few vacancies.”

The PSD continues to find ways to shrink the vacancy rate and boost existing businesses. The district has joined Oakland County’s Mainstreet program, which is based on a national blueprint to support downtowns.

The PSD is part of a recent Michigan Retailers Association outreach effort that allows the businesses in the district to receive free MRA publications and participate in industry webinars.

“We think this is a very innovative program,” Heiney said.

Robert L. Benkert, founder of upscale menswear store the Claymore Shop, said he sees the PSD’s efforts as a “great service” for Birmingham merchants. The shop, which has served customers for 47 years, is east of Woodward Avenue, just north of the downtown.

“I like the discounts that they come up with for different advertising pieces they do, and how they bring people in,” said Benkert, a PSD board member. “Overall, it’s just good for the city, I believe, and it’s good for the retailers.”

“If you walk downtown, you see an active, vibrant downtown.” ie nights, a winter Santa house and a new promotion called First Thursdays, where stores stay open until 9 p.m. one day a month from May through September.

Mid-summer brings a giant block party. “We host Day on the Town on July 27,” Heiney said. “We close the streets down and have a big street fair and sidewalk sale.”

For the Woodward Dream Cruise in August, the PSD leadership plans to bring in a car show that will boast 400 cars and a major display by Chevrolet.

In December, the Birmingham Winter Markt – from the German word for market – provides a venue for merchants to sell crafts and gifts.

“That’s been a big success,” said Heiney, of the four-year-old event.

“It brings as many as 12,000 people downtown for the weekend. The whole idea of all the events is to give people a reason to come downtown.”

As executive director, Heiney is the day-to-day maestro of PSD operations, managing a $1 million annual budget. A Huntington Woods native with a background in public relations for local hospitals, he signed on with the PSD in 1999.

“It’s been a great experience,” said Heiney. “You never know what you’re going to do on a given day. You have a plan and it becomes something else. I say I have 300 bosses, with all the retailers. They have high expectations, so it’s a pleasure for us to strive to meet those expectations.”

He directs a staff of four paid parttimers and gets help with planning and operations from the 12-member PSD board and four committees of volunteers. The committees consist of merchants, residents and commercial property owners.

“Between the PSD board and committees, we have over 50 people who volunteer,” Heiney said.

In addition to planning events, PSD leaders do advertising campaigns, operate the enjoyBirmingham.com website, which links to retailers’ websites, and publish a business director y. They also

Doug Henze is a freelance writer and former business reporter for the Oakland Press in Pontiac.

June 2013

9

IT’S THE LAW

Quick guide to contracts...before you fall asleep

by William J. Hallan, MRA Vice President Government Affairs and General Counsel Nothing gets a retailer’s blood pumping quite like contract negotiation… except maybe watching paint d r y. M o s t r e tailers are not lawyers, and contracts only slow down what they do best: selling goods and services.

It’s so much easier to just “sign the damn thing” instead of taking the time to read the boilerplate language and negotiate.

Yet contracts are everywhere.

Leases, purchase orders, service contracts, equipment agreements and hotel banquet event orders are just some of the contracts retailers encounter. But before you sign that next contract (and before you fall asleep reading this column), I thought it would be wise to provide a few tips that might change your mind about contracts and help you negotiate.

Tip 1: Contracts are good.

In the movie Jerr y Maguire, Tom Cruise, a sports agent, loses his opportunity to represent a top NFL draft pick because he failed to get a signed contract. Contracts set the parameters of a relationship (the who, where, what and when). In short, contracts

map out how the parties will perform if the relationship goes from good to bad to ugly. Businesses need some degree of certainty to operate effectively, and contracts can help provide that certainty.

Tip 2: Read the contract.

You’re probably thinking that in an ideal world you would read every line in a contract or pay your lawyer to do so. Few people take the time to read contracts.

Even lawyers routinely hit the online “I Accept” button without reading the terms. But when it comes to important contracts that affect the operation of your business, you should at least familiarize yourself with the essential terms to prepare for negotiation.

Tip 3: Essential Terms.

Even if you’re not a lawyer or don’t want to pay for your lawyer to look at the contract, you can still spot the essential terms of a contract: • Parties – The correct legal names should be used (the who).

• Performance – The required work/service/goods should be clearly identified (the where and what).

• Price – The pricing expectation

needs to be clear and easy to calculate.

• Term – The contract should state when it starts and how long it runs. Is there any renewal period? Is it automatic? Is there notice required? (the when).

• Events of default – The contract should identify what constitutes default (failure to deliver goods or failure to pay). Does the contract give

the parties an opportunity to fix the situation in the event of default?

• Remedies for default or breach – Does the contract provide for specific performance, liquidated damages, termination or mitigation?

• Indemnity – Contracts often include indemnity provisions where

one party agrees to indemnify (reimburse or be liable to) the other party if there is a loss. It’s best if these clauses are mutual.

Tip 4: Negotiate.

Many people either don’t take the time or don’t believe they have sufficient bargaining power to negotiate a contract. Some larger companies offer “adhesion” contracts, which is basically a “take it or leave it” contract (think Apple’s terms and conditions to use iTunes).

Outside of that scenario, you should take the opportunity to really examine the contract and propose more favorable terms.

It’s been my experience that most people want to be reasonable and will negotiate to make the deal.

Remember, you don’t want to be one year into a three-year deal that’s gone south with no exit strategy.

So, even though reading contracts might put you to sleep, it’s better to stay awake long enough to make sure your business is protected and doesn’t get short-changed in any contract you sign.

10

Michigan Retailer

NEW MEMBERS Mid Michigan Agency Inc., Alma Raymond A Maturo DDS PC, Ann Arbor Chaircover Express Inc., Ann Arbor St. Thomas the Apostle Church, Ann Arbor Pennfield Pizza LLC, Battle Creek Synergy Environmental Inc., Brighton Kregels Landscape Service LLC, Byron Center The After 26 Project Inc., Cadillac Riccardi’s Pizza & Grinders, Cedar Springs Aberdeen Bike & Outdoors, Chelsea High Performing School Solutions LLC, Davisburg HRV Inc., Dearborn Heights Society of Saint Vincent de Paul, Detroit Dollar Deal #9, Detroit Sound Solutions Home Audio & Video, Dewitt Chippewa Plastics Inc., Evart Northwest Tire & Service Inc., Flint Kenneth T Saukas PC dba DAWN, Grand Rapids DeVos Urban Leadership Initiative, Grand Rapids Kent County Republican Committee, Grand Rapids Patrick Thompson Builder, Grand Rapids Infinity Home Improvement, Grand Rapids Creston Market, Grand Rapids

Reserve Wine & Food, Grand Rapids MCK Security LLC, Grandville Grandville Public Schools, Grandville Sheeran Chiropratic PLLC, Grandville Flying Colorz Studio, Holland Global Media Technologies LLC, Holland WW Greenhouses Inc., Hudsonville Norl Schut Greenhouses Inc., Hudsonville A Frame Above, Jackson Chicago Drive Veterinary Clinic, Jenison Quick and Easy, Kalamazoo Wenke Greenhouses, Kalamazoo Catholic Schools of Greater Kalamazoo, Kalamazoo Michigan Licensed Beverage Association Management Co., Lansing Go Greener LLC, Lansing Mustang Lounge Entertainment LLC, Mackinac Island The Neighborhood Spot LLC, Marquette Sports Stop, Mason Judd’s Rental Inc., Midland Mieske’s Country Market, Midland MS Outdoors Inc., Niles Big Apple Bagels, Petoskey St Clair Golf Club, Saint Clair Pilgrim Congregational UCC, Saint Joseph Premier Janitorial & Pool Supplies Inc., Sault Sainte Marie

Summary Annual Report for the Michigan Retailers Association Multiple Employer Welfare Arrangement Dental Plan and Trust This is a summary of the annual report of the Michigan Retailers Association Multiple Employer Welfare Arrangement Dental Plan and Trust for the 12 months ended December 31, 2012. (Note: On January 1, 2013, the Michigan Retailers Association Multiple Employer Welfare Arrangement Dental Plan and Trust was dissolved following regulatory approval and the dental plan is now offered through Retailers Mutual Insurance Company.) The annual report has been filed with the Internal Revenue Service, as required under the Employee Retirement Income Security Act of 1974 (ERISA), Tax ID #38-3090275.

Michigan Retailers Association MEWA has committed itself to pay all dental claims incurred under the terms of the plan.

Insurance Information The plan has contracted with Delta Dental Plan of Michigan to pay claims incurred under the terms of the plan. The total premiums paid for the plan year ending December 31, 2012, were $630,975. Because it is a so-called “experience-rated” contract, the premium costs are affected by, among other things, the number and size of claims.

Basic Financial Statement The value of plan assets, after subtracting liabilities of the plan, was $746,092 as of December 31, 2012, compared to $769,341 as of the beginning of the plan year. During the plan year the plan experienced a decrease in its net assets of $23,249. This increase includes unrealized appreciation and depreciation in the value of plan assets; that is, the difference between the value of the plan’s assets at the end of the year and the value of the assets at the beginning of the year or the cost of assets acquired during the year. During the plan year, the plan had total income of $637,700, including employer and employee contributions of $630,975 and earnings from investments of $6,725.

Plan expenses were $660,949. These expenses included $45,538 in administrative expenses, $503,984 in benefits paid to participants and beneficiaries, and $111,427 in other expenses.

Your Rights to Additional Information You have the right to receive a copy of the full annual report, or any part thereof, on request. The items listed below are included in that report: 1. An accountant’s report; 2. Assets held for investment; 3. Fiduciary information, including transactions between the plan and parties-in-interest (that is, persons who have certain relationships with the plan); 4. Loans or other obligations in default; 5. Leases in default; 6. Transactions in excess of 3 percent of plan assets.

To obtain a copy of the full annual report, or any part thereof, write or call the office of Michigan Retailers Services, Inc., 603 South Washington Avenue, Lansing, Michigan 48933 (517.372.5656). The charge to cover copying costs will be $5.00 for the full annual report, or $.40 per page for any part thereof.

You also have the right to receive from the plan administrator, on request and at no charge, a statement of the assets and liabilities of the plan and accompanying notes, or both. If you request a copy of the full annual report from the plan administrator, these two statements and accompanying notes will be included as part of that report. The charge to cover copying costs given above does not include a charge for the copying of these portions of the report because these portions are furnished without charge.

You also have the legally protected right to examine the annual report at the main office of the plan: Michigan Retailers Association, 603 South Washington Avenue, Lansing, Michigan 48933, and at the U.S. Department of Labor in Washington, D.C., or to obtain a copy from the U.S. Department of Labor upon payment of copying costs. Requests to the Department should be addressed to Public Disclosure Room, N4677, Pension and Welfare Benefit Programs, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20216.

www.retailers.com

RE: RETAILERS

MRA member discount at new TC food festival MRA members can receive a $100 discount on booth space at the 1st Annual Taste of Traverse, scheduled for September 13-15 in downtown Traverse City. The offer is good through August 2, said Rachel Lazere of Lakeshore Event Group. MRA members must “like” the new festival’s Facebook page to qualify for the discount.

The event is designed to let visitors sip, sample and shop as they enjoy what national magazines are calling one of the best food and wine areas in the nation. Information is available from 231.714.4646 or 248.619.9696.

Hatch Detroit is accepting entries from would-be entrepreneurs who want to open a retail shop in Detroit.

The winner receives $50,000 plus consulting services to help start a business. The competition, now in its third year, is sponsored by Comerica Bank, and entrants are required to submit a detailed proposal, with business plan and budget. Applications are due July 13. More information at hatchdetroit.com.

One of the Midwest’s largest craft cider producers, Vander Mill Cider &

Winery in Spring Lake, has completed a 3,500-square-foot, $600,000 expansion that includes the addition of fermentation equipment and a canning system that will boost production. Three canned Vander Mill brands – Hard Apple, Totally Roasted and Blue Gold – were scheduled to hit the marketplace this spring. The facility’s 2,500-foot tasting room and cafe also have been renovated. Vander Mill opened in 2006.

Brys Estate Vineyard & Winery, located on Old Mission Peninsula in northwest Michigan, was recognized recently with top honors at some of the world’s leading wine competitions, including the International Wine and Spirits Competition in London, England. In London, Brys Estate won a gold medal for its 2011 Gewurztraminer, one of 15 awards presented to U.S. wineries. It also received a silver medal for 2011 Pinot Noir and 2007 “Dry Ice” wines. Honors were received, too, at the 2013 Pacific Rim International Wine Competition held in California, the Riverside International Wine Competition, also in California, and the Tasters Guild International Wine Competition.

Membership Services Corner Quick notes on key services. Call 800.366.3699 for details.

Credit Card Processing • The IRS requires us to have valid business taxpayer W-9 information for all of our merchant processing accounts. Call customer service if you need to verify your business information, or if you need a W-9 form.

• Credit card processing supplies can be ordered online at www.retailers.com or by calling 800.563.5981 option 3.

• You can now process credit card transactions with your iPhone or Android. Call us for details.

• Pin-based debit transactions cannot be voided.

• Credit card fraud is on the rise; call to verify any suspicious email, phone or Internet orders you receive.

• Data Security compliance is mandatory; therefore, 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: Zon Jr, Tranz, Omni

and Hypercom T7P. Health Insurance The Patient Protection and Affordable Care Act (PPACA) requires all employers to provide their employees with a notice of the health insurance coverage options available on the online insurance marketplace, also referred to as an exchange, by October 1. Employees hired after October 1 must receive the notice of coverage options within 14 days of being hired.

The U.S. Department of Labor has issued a model notice for employers offering health insurance to some or all employees, and another for those who do not provide health insurance. COBRA notices are also affected.

MRA members can access the model notices by visiting the health care reform section of memberinsurancesolutions.com. Look under the Health Care and Group Programs section of the website for the three forms and for a technical release explaining the requirement and how to use the forms.

June 2013

11

LOTTERY

New ‘Raise The Stakes’ ticket adds team play to Instants

by M. Scott Bowen, Commissioner

B e p re p a re d for some serious Lottery business this summer as new Instant games coming on the market have plenty to offer Lottery players.

The Michigan Lottery launched a new instant game on June 4 that includes a variety of features that players – and the Lottery industry – have never seen before.

The $2 Raise The Stakes™ ticket, which includes over $7 million in total instant-win cash prizes, also includes 150 second-chance drawings with prizes totaling over $300,000.

The game also provides players with both a website, RaiseStakes. com, and free mobile app from which they can create and join teams with other players in order to pool their entries. Players also will be given access to various social media tools, to engage with their friends and Raise The Stakes teammates.

Each Raise The Stakes ticket has a stub with a unique entry code, worth one to 60 entries, hidden beneath

the latex. Codes can be submitted through either the website or the mobile app. Be sure to remind players that if they have the mobile app, they can choose to quickly scan the QR code on the ticket to automatically submit their entries rather than entering them manually.

Raise The Stakes will have 140 drawings, with five winners selected each day, to win $100. Remind players that entering their codes can lead to cash in their pockets.

In addition to the daily drawings, there will be 10 progressive jackpot drawings during the Raise the Stakes promotional period. Players can choose to keep their entries for themselves or assign them to a team for a shot at increasing their chances to win.

Every entry the player or a team member submits raises the potential progressive jackpot prize by $500 and 60 entries to “raise the stakes” to the maximum prize of $30,000. In each drawing, if the entry selected was assigned to an individual, then that individual wins the entire progressive jackpot. If the entry selected was assigned to a team, then each member

of the team receives $500 for each entry he or she contributed.

Team participation, a very new element for Lottery play, not only increases a player’s potential progressive jackpot faster, it also increases the chances of winning. Encourage your players to use social media tools like Facebook and Twitter to invite friends or open their team to anyone who might want to join. Players can also use social media to chat with team members as they get closer to their jackpot goal and to celebrate their winnings.

Raise The Stakes definitely takes Instant play to a whole new level, and your customers may have questions.

I encourage you to visit the game’s website, www.raisestakes.com, to familiarize yourself with the game’s components. And be sure to watch the Raise The Stakes video at http:// youtu.be/s8BNJjr4CuM. It is not only entertaining, but informative as well.

This game is sure to generate a lot of interest and excitement for our players because it provides so many winning opportunities. The daily drawing prizes of $100 and the progressive jackpot prizes – with a winner’s amount determined by his

or her contributions to the team effort – will be awarded to players via email in the form of a voucher.

Like any Lottery Instant ticket, you can redeem a voucher of up to and including $600. To cash these vouchers, simply press the “Coupon” key on the home screen of the Lottery terminal and select “Instant Coupon.” Then scan the barcode on the voucher and enter the underlined 5-digit number through the terminal or manually validate by using the Instant ticket validation procedure.

Be sure to welcome these vouchers from players, because if you don’t, another retailer will. And that means lost cashing commission for you.

Over 97 cents of every dollar spent on Lottery tickets is returned to the state in the form of contributions to the state School Aid Fund, prizes to players and commissions to retailers. In fiscal year 2012, the contribution to schools was a record $778.4 million. Since its inception in 1972, the Lottery has contributed over $17 billion to education in Michigan.

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

www.BuyNearbyMI.com