June 15 Michigan Retailer

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Upbeat Sales Forecasts

Centennial Retailer

Michigan retailers’ sales forecasts remain strong for late spring and early summer, following a solid April.

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Robinette’s Apple Haus & Winery in northeast Grand Rapids is the most recent addition to MRA’s list of Centennial Retailers.

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Big Plusses with Small-Group Dental MRA’s Ally Nemetz talks about the advantages of Retailers Insurance small-group dental plans.

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® June 2015 Vol. 40 No. 3

New road-funds plan unlikely to ask voters to increase sales tax Lawmakers and Governor Rick Snyder are scrambling to come up with a new road-funding package in the wake of voters’ historic defeat of the May 5 ballot proposal.

The package thrashed by voters included a one-penny increase in the state sales tax rate.

Although a number of efforts are underway and House Republicans have introduced a detailed plan, there is not yet agreement on how to raise the more than $1 billion officials say is needed annually to fix the state’s crumbling roads.

At this stage, however, it appears lawmakers will not go back to voters to ask for a sales tax increase.

Lawmakers’ comments following the defeat – the most lopsided for a constitutional amendment in more than 50 years – indicated no political appetite for another try at raising the sales tax.

House Plan House Republicans introduced their new plan only two weeks after the vote.

The bills include some pieces of the original plan that were tied to Proposal 1: competitive bidding and road warranties, while looking to reprioritize existing funds and adjust registration fees for electronic vehicle owners.

The legislation was referred to a new committee created specifically to handle the delicate issue: the House Roads and Economic Development Committee. The committee, chaired

by Rep. Jeff Farrington (R-Utica), already began hearing testimony.

Overall, the plan compiles $1.05 billion in funds for road and infrastructure repairs. Most ($700 million) of the funding for the plan comes from the state’s $9.5 billion general fund.

The official publication of the Michigan Retailers Association

www.retailers.com

Buy Nearby kicks off regional events Saugatuck is a good example of how buying nearby can create jobs and foster economic development in communities, several West Michigan retailers and business leaders said during a Buy Nearby news conference

held in the Lake Michigan resort town.

“I want to thank Michigan Retailers Association for hosting this event here…because this type of campaign is important,” said David Lokker, owner of Landsharks, a local

Jonathan Koop, owner of Michigan Awesome, discusses his business and the importance of Buy Nearby at a news conference in Saugatuck. Photo by David Trumpie

Schwark brothers create award to honor parents

Scholarship winners will appear in August issue

Regional Events The news conference was the first in a series of similar regional events planned this summer to help focus public attention on the importance of Buy Nearby, said James P. Hallan, MRA president and CEO. Hallan was joined by Buy Nearby Guy, the campaign’s giant mascot shaped like the Buy Nearby logo – a shopping bag in the shape of Michigan.

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Pre-emption bill moving forward

rule number one,” Schwark said.

“He wanted everyone to enjoy doing business with us,” Schwark said.

His father was Macomb County businessman Kenneth A. Schwark, the founder of the former Schwark Furniture store chain and the Sycamore Hills Golf Club.

The elder Schwark died March 23, 2014, at age 89.

To honor their father and 92-year-old mother, Jim and his two younger brothers have created the annual Kenneth A. and Margaret Schwark Legacy Scholarship within the Michigan Retailers Association’s annual scholarship program.

The Michigan House has approved controversial legislation designed to protect private businesses from a patchwork of local wage and other labor laws.

Michigan Retailers Association supports the pro-business measure, which would prohibit local communities from adopting ordinances or policies related to employee wages, benefits or other work-related mandates.

The pre-emption would include local minimum wage or prevailing wage ordinances, local paid or unpaid leave mandates and local fringe benefits or scheduling mandates.

Passage of the legislation would mean that only the state could enact such laws or policies, thereby preventing businesses operating in multiple communities from facing a confusing array of different regulations.

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by Doug Henze

Jim Schwark recalls the two simple – but important – rules his father taught him when he started in the family business.

“Number one, the customer is always right – treat customers with respect. Number two, go back to

retail business that hosted the May 20 news conference.

Landsharks was founded by Lokker’s mother, Sally Troutman, in 1989.

It has grown from 100 business days a year and two employees to 363 days and 16 employees, Lokker said.

“It’s kind of uncommon for a Saugatuck retailer, a small business like Landsharks or any small business up and down the lakeshore resort towns of Lake Michigan, to be open year round.

We wouldn’t have that privilege if it weren’t for programs like Local First and campaigns like Buy Nearby,” he said.

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Michigan Retailer

Changes in assessing could hurt all businesses

by James P. Hallan, MRA President and Chief Executive Officer All homeowners can appreciate the power an assessor has in determining property value. Add on some extra square feet to your home and the value goes up (so do your property taxes).

Current law requires assessors to value the property by determining the usual selling price. That makes sense; the selling price of the property is a fair indicator of its market value.

But imagine if assessors instead used subjective criteria. For example, let’s say you operate a business out of your home. Should the value of the home increase just because the business is profitable?

Of course not. When you sell your home, you don’t sell the business with the home.

The business is unique to the owner, not the physical property, and a buyer will not pay more for a home that happened to house the former owner’s business.

Instead, the true cash value of the home is what a new buyer would agree to pay for the physical property – land, land improvements and building.

Dangerous Changes The above situation accurately describes changes being pushed in Lansing by local government organizations – and the slippery slope they would bring.

A subjective, value-in-use criteria would allow assessors to include intangible considerations in the valuation of property, such as goodwill, trademarks, advertising, merchandising, branding, inventory, management and pricing.

Businesses and homeowners should both be worried.

Imagine two retail shoe stores in identical buildings, similar in all respects regarding location and layout.

Under a value-in-use property assessment system that is being proposed, they might have completely different values assigned because one store is profitable and the other is not.

You might wonder why these groups are calling for such dangerous legislation. The obvious reason is the desire for more tax money.

The issue stems from the fact that local assessors have been incorrectly assessing some business property for years. Several businesses have appealed their assessments and prevailed before the Michigan Tax Tribunal.

To this point, the fights have been between large businesses and their local communities. But the proposed changes could put every business property and homestead in jeopardy.

Blank Check Local governments are upset with reduced tax revenue – but they only have themselves to blame for assessing incorrectly.

Giving tax assessors the ability to use a subjective, value-in-use criteria is like giving the tax collector a blank check. The slope is indeed slippery.

Lawmakers should think twice before considering making such a drastic change. Assessing property values based on a value-in-use mod-

el would result in unfair taxation for businesses and would set a dangerous new valuation standard for all property.

The Michigan Constitution and Michigan’s Supreme Court have been clear that property taxes can only be imposed on real and tangible personal property. Any changes to the contrary would result in extensive legal battles and make Michigan less competitive.

Property valuations should continue to be made using the objective value a property owner could receive in an exchange of property to any new owner. Lawmakers should reject any proposals that would give assessors more power than they already have.

Governor names Walsh to key post Governor Rick Snyder has appointed MRA Board of Directors member Jim Walsh to the board of one of the state’s top economic develWalsh opment entities.

Walsh, retired CFO of Meijer, is serving a two-year term on the Michigan Strategic Fund Board of Directors.

The appointment followed the governor’s Executive Order reconstituting the Strategic Fund within the new Department of Talent and Economic Development, which includes the Michigan Economic Development Corporation (MEDC).

“The Strategic Fund plays a key role in spurring and supporting economic development, and I am confident these appointees will do great work to accelerate our state’s progress in these areas,” Snyder said.

The appointment was announced by the Governor’s Office in late March and expires in 2017.

Walsh has served on the MRA board since 2007. An Ada resident, he is an adjunct professor of finance at Aquinas College.

He joined Meijer in 1992 after holding executive positions with Warehouse Club, Inc., Household Merchandising, Inc., and Jewel Companies, Inc., all in Illinois. He holds degrees from Loyola University in Chicago and Northwestern University.

www.retailers.com

Board of Directors: Dan Marshall

Chair Marshall Music Company, Lansing

James P. Hallan

President and CEO Michigan Retailers Association

Orin Mazzoni, Jr.

Vice Chair Orin Jewelers, Garden City

Peter R. Sobelton Treasurer Birmingham

William J. Hallan

Secretary Michigan Retailers Association

Thomas Ungrodt

Past Chair Ideation, Ann Arbor

Brian Ducharme AT&T

Becky Beauchine Kulka

Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos

Joseph McCurry

Credit Card Group

Larry Mullins

Brandon Tire & Battery, Ortonville

R.D. (Dan) Musser III

Grand Hotel, Mackinac Island

Barb Stein

Great Northern Trading Co., Rockford

Joe Swanson Target Corp.

James Walsh

Meijer, Inc., Grand Rapids

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

Medicare advisor to help members A personal advisor on Medicare is now available to MRA members.

Member Insurance Services (MIS), which markets and administers MRA’s member health Seely insurance program, announced the hiring of Rick Seely as Medicare advisor.

MRA members approaching their age 65 transition to Medicare or those already past 65 can contact Seely to

schedule a personal consultation regarding Medicare and coverage options.

Seely is a seasoned association veteran, having served in the role of executive with three associations over a 33-year period. He is also a past chairman of the board of the Michigan Society of Association Executives.

To schedule a personal Medicare consultation, Seely can be reached at 877.906.9924 ext. 411.

If you are going to be new to Medicare, please call him 60-90 days before your 65th birthday month so there is adequate time to apply for Medicare.

Editor

Pat Kerwin

Design Manager

Publication Office: 603 South Washington Avenue Lansing, MI 48933 517.372.5656 or 800.366.3699 Fax: 517.372.1303 www.Retailers.com www.RetailersInsurance.com www.BuyNearbyMI.com

Subscriptions:

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

June 2015

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MICHIGAN RETAIL INDEX

Michigan retailers’ sales forecasts remain upbeat recorded declines and 15 percent reported no change. The results create a seasonally adjusted performance index of 57.6, down from 66.8 in March but still above the key 50 mark. A year ago April the performance index stood at 51.1 The 100-point index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Re-

Current

Performance Index

serve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 67 percent of retailers expect sales during May–July to increase over the same period last year, while 11 percent project a decrease and 22 percent no change.

That puts the seasonally adjusted outlook index at 74.7, down from 76.9 in March. A year ago April the outlook

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index stood at 73.9.

April sales tax receipts totaled $573.6 million, down 5.2 percent from a year ago.

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

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Michigan retailers’ sales forecasts remain strong for late spring and early summer, according to the latest Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

More than two of every three retailers (67 percent) in the state expect to increase sales over last year during the May–July period, said MRA President and CEO James P. Hallan.

The upbeat forecasts follow a solid April in which 66 percent reported sales as good or better than a year ago April. Fifty-one percent said sales were better.

“An improving economy marked by a falling unemployment rate has been boosting retailers’ sales and forecasts,” Hallan said.

“MRA’s statewide Buy Nearby campaign and communities’ shop-local initiatives also appear to be having a positive effect. We believe consumers are becoming more aware of the importance of spending their dollars at stores and websites located in Michigan.”

The April monthly survey of MRA members showed 51 percent of retailers increased sales over the same month last year, while 34 percent

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.

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Be sure to complete your online survey each month!

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Michigan Retailer

www.retailers.com

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MRA Legislative Reception Sponsored by Michigan’s retail industry Lawmakers and representatives of Michigan’s retail industry turned out in full force for MRA’s Legislative Reception on April 21 in Lansing. The annual event helps state officials learn more about the importance of retail to the state’s economy and the industry’s top issues.

Photos by David Trumpie.

Sen. Peter MacGregor (R-Rockford) and Dan Marshall of Marshall Music, Lansing, and chair of the MRA Board of Directors

Scott Greenlee of the Attorney General’s Office, MRA’s Amy Drumm and Dirk Bloemendaal of Amway

Sen. Ken Horn (R-Frankenmuth), Retailers Insurance’s Kurt Dettmer, MRA board member Jim Walsh of Ada and Sen. Margaret O’Brien (R-Portage)

MRA’s William J. Hallan and Joel Kurzman of the National Association of Chain Drug Stores Barb Stein of Great Northern Trading Co. in Rockford and MRA board member, Jim Walsh and Rep. Rob VerHeulen (R-Walker)

Rep. Daniela Garcia (R-Holland) and Buy Nearby Guy

Sen. Wayne Schmidt (R-Traverse City) and Brandon Barron of Kroger

MRA’s James P. Hallan, Dave Biswas of Sen. Kowall’s office and Sen. Mike Kowall (R-White Lake)

June 2015

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‘Agratainment farm’ receives MRA centennial plaque

by Jean Eggemyer

Tucked into a busy intersection in northeast Grand Rapids is a Michigan-style oasis.

Robinette’s Apple Haus & Winery, a combination retail business and “agritainment farm,” offers a friendly, nostalgic place to escape urban bustle. Customers can eat, shop, sample wines and ciders, pick fruit and spend a pleasant time with family and friends.

In operation for more than 100 years, the business at 4 Mile Road NE and East Beltline Avenue has evolved with changing economic, agronomic and retail trends. Like their predecessors, today’s fourth-generation owners, brothers Edward II (“Ed”), Bill and John Robinette focus on offering quality products to maintain their solid customer base.

“Since the early part of the 1900s, the family has been committed to quality,” Ed Robinette said. “My grandfather, Edward James Robinette, would load up his wagon in the morning, get down to the Grand Rapids wholesale fruit market and, because of his reputation for quality apples, would sell his load before the market even opened – sight unseen.”

Despite the business name, “It all started with peaches,” he explained.

Prior to the turn of the 20th century, peaches were a popular cash crop, earning more than $3 per bushel in the wholesale market – in today’s dollars more than $70 a bushel.

“Area peach farmers could pay for their entire farms with the sales of their first crops,” he added. “Peach-

farm occurred in the 1970s. ing and runs until 4:00 or 5:00 p.m.

“After 1971, when the economics most days in the fall,” he said. of farming were changing, we had to Visitors can amble up to Robinette’s rethink our business,” Ed said.

30-foot-long wine tasting bar in the hisThe 125-acre Robinette farm was no longer big enough to compete in the wholesale fruit market, so the brothers’ father, James Robinette, built a cider mill and began to sell apples and cider directly to the public. It was a profitable decision and, from that time forward, the business has continued to expand.

Like most retailers, the Robinettes’ mission is to successfully sell what customers want. “But,” he added, “sometimes our mission is just to survive.”

Another case in point: in 2012 a hard freeze killed the entire crop of apples. Because of the foresight of current and past owners and their efforts to diversify, the sale of wines, ciders, gifts, entertainment tickets, and packaged Members of the Robinette family, in front of the landand prepared food mark giant apple at their Centennial farm and business, include (from left) son Bill, father Jim and mother Mary sustained the business Bethel. Photo by David Trumpie through that trial.

Today, sales of fruit from the ortoric, 5,000-square-foot barn or take chards – “you-picked” home bottles of Michigan wine or off the trees or packmany varieties of hard ciders created aged to take home

by Bill Robinette. The gift and wine – still make up the shop is adjacent to the tasting room. bulk of profits. But In addition to a reputation for qualvisitors to the farm ity, location has played a significant can also: shop a wide part in the growth of the business. selection of gifts; More than 50,000 cars drive past the taste and purchase farm each day on East Beltline, offering Robinette’s labeled Robinette’s a prime advertising venue.

Michigan wines, ap“We’re close to the Grand Rapids ple ciders and hard city limit – the city has grown up ciders; enjoy a meal around us – so we have an excellent at the lunch counter; location for the public to come out to buy fresh donuts and the farm,” said Ed. other baked goods; “Quality is still our hallmark Members of the first and second generation Robinette watch cider being though.

You have to sell quality or family prepare to take apples to the Grand Rapids wholemade; go for a horsepeople won’t come back.” sale fruit market in 1912. drawn wagon ride; Robinette’s Apple Haus & Winery es are what built this farm and many navigate a corn maze; or bounce on is open year-round, with the bulk of others in the region.” a large, inflatable “jumping pillow.” business occurring in the summer But in 1899, the coldest winter in and autumn when thousands of peorecorded history killed all the peach 50,000 Cars ple visit the farm each day. trees. Farmers then turned to apples.

The Robinettes and their staff pro“We offer tours for school groups “My great-grandfather bought this duce and sell 9,000 bushels of apples in the fall,” he said. “We’re starting to farm, with its established apple or– 11 different varieties – and more see the children and grandchildren of chards, in 1911,” he said. “We’ve than 25,000 gallons of cider annually. people who went on tours when they never gone back to peaches.”

A new donut-making machine, inwere in school. stalled last year, turns out 125 dozen “People come back two and three Cider Mill donuts an hour. times in the fall because they enjoy Another momentous shift for the “It’s turned on at 6:30 in the mornthe family atmosphere.”

Positive Employees While the Robinettes employ no set strategy to foster that positive atmosphere, they are careful about whom they hire and where employees are placed in the enterprise – important because their staff swells to 100 in the busy fall months.

“A seasonal employee may start by bagging apples, but we enjoy coaxing introverts into interacting with the public,” he said. “We’re always looking for that ability to engage with customers.”

The family members are also active managers and set the tone for how customers are treated.

“We’re on the farm and in the store working here the whole time – we’re part of the crew,” he explained. “Employees see our positive attitude.”

“My favorite thing about our business is that my kids grew up learning first-hand how to work,” added Alicia Robinette, Ed’s wife and the bookkeeper, buyer and winery manager, among other roles.

As the you-pick fruit season winds down, they focus on sales of holiday gift baskets – filled with apples, jams, fudge, nuts, meats, cheese, candies and more – in store and online.

Time is spent in the “off season” trimming fruit trees, repairing equipment, making ciders and wines and modifying structures.

“My favorite activity is sculpting trees for next year,” said Ed. “I enjoy that it’s something different every day. One day we need to make cider, the next day I can bag apples…there is a lot of flexibility in what we do. It makes it an enjoyable life.”

The Robinettes’ goal is to keep the business in the family for at least another generation, and MRA plays a role in that effort. To help keep costs down, they use MRA credit card processing services.

The Robinettes also point to legislative advocacy as an important benefit.

“I am surprised by the amount of taxes and government regulations that are heaped upon a business,” said Alicia.

“Through the Retailer magazine and other communications, we’re kept informed about what’s going on in state and federal government and how it might impact us as a small business,” Ed added.

“It’s nice to have a group that goes to bat for us and keeps an eye on government and regulatory developments.”

MRA also has recognized the family business as a Michigan Centennial Retailer and is providing a handsome brass plaque and certificate to the family.

Jean Eggemeyer is a freelance writer and former MRA employee.

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Michigan Retailer

www.retailers.com

Big plusses to Retailers Insurance small-group dental In addition to providing workers’ compensation insurance to a wide variety of Michigan businesses, Retailers Insurance Company (RIC) offers quality, competitively priced, small-group dental insurance to members. The program is administered by Delta Dental, an industry leader.

Michigan Retailer sat down with Ally Nemetz, MRA’s director of customer service and data administration, to talk about dental insurance and the advantages offered by Retailers Insurance dental coverage.

Michigan Retailer: How long has Michigan Retailers Association been in the dental insurance business?

Nemetz: We have been providing dental insurance to members for almost 25 years, since July 1990, so we have a great deal of experience and an excellent track record.

Michigan Retailer: What advantages does RIC’s program offer businesses?

Nemetz: There are many. Our smallgroup plans give you additional benefit coverage that you would not receive from an individual plan. In addition, our dental rates are reasonable and affordable for small businesses.

Michigan Retailer: How large must a group be in order to qualify for coverage?

Nemetz: Unlike most insurers, Retailers Insurance enables groups as small as two subscribers to participate in the dental program. That’s a real boost for small businesses. Groups from two to nine require 100 percent participation, while groups of 10 or more need 75 percent participation.

Michigan Retailer: What if I’m not part of a group?

Nemetz: We certainly welcome individuals to contact us so we can discuss what options are available to them as well.

Ally Nemetz. Photos by David Trumpie.

Michigan Retailer: Why is it important that the program is administered by Delta Dental?

Nemetz: Delta Dental administers and processes all claims for Retailers Insurance. In addition, it pays the providers for services rendered to the patient. Delta is a national leader, it sets the standard for quality and size of the network of participating providers, and we are fortunate to have Delta’s headquarters in Michigan.

With its affiliates in Arkansas, Indiana, Kentucky, New Mexico, North Carolina, Ohio and Tennessee, Delta Dental pays out some $3 billion annually for dental care for more than 12 million members. It’s also part of a nationwide system that provides coverage to more than 60 million Americans and operates two of the nation’s largest networks of participating dentists.

plans, from the age of 1 up to age 19.

Michigan Retailer: Has there been an increase in the number of companies dropping employee dental insurance?

Nemetz: Not in our program, and we have been receiving more applications to add employees and dependents. I think it gives the subscriber peace of mind having the additional dental coverage not only for themselves, but their dependents as well.

Michigan Retailer: Are there different levels of coverage from which to choose?

Nemetz: Our members can choose from a couple of different plans, so they are not limited to just one option.

Michigan Retailer: What is the difference between the two plans?

Nemetz: Plan A has no deductibles and provides 100 percent coverage of diagnostic and preventive services, such as oral examinations. Plan B, a less expensive option, has a small yearly deductible and provides 80 percent coverage of preventive services, including x-rays.

Michigan Retailer: Is orthodontics covered?

Nemetz: Yes, orthodontics is a covered benefit under both of the RIC

Michigan Retailer: Why is dental insurance a good investment?

Nemetz: Having dental insurance and seeing the dentist regularly may actually prevent certain diseases from occurring, such as diabetes, leukemia, oral cancer, pancreatic cancer, heart disease and kidney disease. Dentists are able to tell a lot about your overall health and can be the first health care provider to diagnose a health problem in its early stages. Through Retailers Insurance, it’s an attractive and affordable employee benefit.

June 2015

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Buy Nearby campaign holds news conference in Saugatuck Continued from page 1

“We’re here to remind residents that where they spend their shopping dollars during Memorial Day weekend and throughout the year matters a great deal to their local communities and to Michigan’s economy,” Hallan told the Saugatuck group.

He pointed to economic research commissioned by MRA that shows Michigan would create more than 74,000 jobs and $9 billion in additional economic activity if all Michiganders making purchases from “remote sellers” switched to buying from retail businesses in Michigan.

“I think this Buy Nearby campaign has done a really nice job of giving you some real numbers and some teeth to the argument that spending money at local retailers is a good thing,” added Brian Lesperance, marketing director and winemaker for Fenn Valley Vineyards, which has a retail store in Saugatuck.

Living Testimony Jonathan Koop, managing partner of Michigan Awesome, described how his company and Landsharks and Fenn Valley all work together to promote Michigan products and en-

courage buying nearby.

“We’re living testimony that Buy Nearby works. If it didn’t, we certainly wouldn’t be in existence,” Koop said.

Michigan Awesome, based in Holland, started as a T-shirt company and expanded quickly into producing a variety of Michigan-themed products.

Koop explained that Michigan Awesome wholesales its products to retailers across the state, including Landsharks. Two doors down from Landsharks, Fenn Valley sells wine that it produces under the Michigan Awesome label in addition to wine under its own label.

Landsharks and Fenn Valley promote each other by offering their customers discounts on the different Michigan Awesome products for sale at the other’s store.

“The corner we’re standing at today is a real good case study of why Buy Nearby works,” Koop said.

Economic Driver Also participating in the news conference were Felicia Fairchild, executive director of the Saugatuck-Douglas Visi-

tors Bureau, and Jim Petzing, president of the Saugatuck Douglas Area Business Association and owner of Zing Eat/Drink in Douglas.

Fairchild said the area’s retailers “are an economic driver for not just tourism, but for year-round business.”

Petzing added, “What I love most about the Buy Nearby campaign and this critically important program is that it will serve as a key economic driver for helping our 100-days-a-year resort community become a 365-daysa-year business community.

“I’m excited by that.”

MRA’s Jim Hallan leads off the news event at Landsharks. Photos by David Trumpie

Jim Petzing, president of the Saugatuck Douglas Area Business Association.

Anthony Puzzuoli of Local First becomes fast friends with Buy Nearby Guy.

Brian Lesperance, of Fenn Valley Vineyards, gives thumbs up to Buy Nearby.

Campaign mascot Buy Nearby Guy and David Lokker outside Lokker’s store.

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Michigan Retailer

Membership Services Corner

by Penny Sierakowski, MRA Customer Service Department Manager Quick notes on key services. Call 800.563.5981 for credit card processing assistance or 800.366.3699 for other matters.

We v a l u e your membership and trust. Let us know whenever we can help you with your question or problem, no matter how large or small.

Credit Card Processing • If you receive a call stating you have a non-compliant terminal – this is a scam! Contact customer service to verify if your terminal is compliant.

• Effective June 23 this year, the application will retire for all Tranz 330, 380 and 460 terminals. We will no longer be able to support these terminals after this date. Call us to obtain upgrade options.

• Effective September 1 this year, the application will retire for all Nurit 2085, 3010, 8000 and 8020 terminals. We will no longer be able to support these terminals after this date. Call us to obtain upgrade options.

• Effective October 1 this year, you will find it advantageous to have an EMV (chip reader) and NFC (contactless) processing device. Contact customer service to discuss the industry’s switch to

EMV/NFC devices and your specific equipment options.

• You cannot impose a minimum transaction amount on debit cards or prepaid cards. However, you can impose a minimum transaction amount – not to exceed $10 – on credit cards. If you do, you must display this policy at the entrance of your business as well as at the cash register/checkout station.

• To protect your business against customer disputes, be sure to imprint and obtain a signature on all credit card transactions.

• For your protection, please notify us of any larger than normal sales or out-of-the-country sales. We may also contact you on occasion to verify large, keyed or duplicate transactions.

• Don’t forget to notify Customer Service of any changes with the authorized signer on file (non-profit organizations, government entities, etc.).

• Keep your customers happy and don’t lose potential sales. Contact us if you would like to accept American Express.

• Pay close attention to each credit card receipt. If it reads “Amount Due,” treat this as a split-tender transaction and collect the remaining balance via another form of payment.

• Pin-Based debit transactions cannot be voided.

Retail publisher delivers webinar The final webinar in the series of four free webinars offered by MRA this spring and summer will feature Retail Minded founder and publisher Nicole Leinbach-Reyhle on Wednesday, July 15.

Titled Retail 101: Tips to Help You Maximize Your Retail Success, it will be held at 8:30 a.m. and repeated at 11:30 a.m.

The online sessions are no cost to MRA members. They are produced by MRA and the national Council of State Retail Associations’ “Retail University.”

Participants must register in advance by contacting MRA’s Laura Schilling at lschilling@retailers.com or 800.366.3699 ext. 313.

Login information for each session will be provided to registrants.

Drawing from her book, LeinbachReyhle will deliver realistic, practical and useful insights for brick-andmortar and online merchants. The session serves both as a strategic planning guide and as a hands-on, practical reference.

The session will enable you to: • Gain a strategic understanding of the vast responsibilities of independent merchants, and how to apply best practices within marketing, merchandising, management and other categories.

• Discover action steps on how to advance, nurture or begin your retail efforts.

• Learn how inventory, marketing, merchandising and online and offline selling can be better managed and more effective in generating sales.

• Discover organizations, companies and events that cater to independent retailers and can help your business succeed.

Nicole Leinbach-Reyhle is founder and publisher of Retail Minded, a publication committed to supporting independent retailers through news and education. She is also co-founder of the Independent Retailer Conference.

She is a regular contributor to Forbes. com and is the author of Retail 101: The Guide to Managing and Marketing Your Retail Business from McGraw-Hill.

www.retailers.com

RETAIL TECHNOLOGY NEWS

Protect card data like cash 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.

As a merchant, you routinely see and handle payment card data from your customers, usually in conjunction with a real-time, one-and-done transaction.

But that might not be the only time.

It’s possible you could hang onto the data for a future transaction.

Two questions you should ask yourself regularly are: “Do I really need to see/keep/handle this data?” and “What am I doing to fiercely protect it?”

Tampering is a real threat, because in some cases the bad guys are getting access to terminals already in stores and installing card-skimming equipment inside them. These thieves are really good at what they do and use a variety of ways to gain access to a terminal.

During a recent audit of gas stations in Florida, it was discovered that nearly 1.5 percent of the card readers inside the gas pumps had skimmers installed and bad guys were stealing card data from those merchants.

Make sure that all of your staff know what to do if someone asks for access to your terminal. Again, think about the terminal as your “cash register.”

Just as you wouldn’t provide access to your cash register to someone from outside without proper identification and explanation, don’t allow access to your credit card machine without similar questioning and identification.

“Data security is not a destination, it is a journey.”

Over the years, the merchant processing industry has continued to design solutions that minimize or eliminate card data from the transaction stream. Whether you are using a terminal-based processing solution, a POS system or the old-fashioned imprinter (a.k.a. “knuckle buster”), the industry has tried to practice the concept that the bad guys can’t steal what you don’t have.

That being said, there are still times when you have access to card data.

When these situations occur, you need to make sure you have stringent procedures in place to protect the data.

Knuckle Buster If you use a knuckle buster to generate the receipt for the customer, your copy will have the complete card number on it.

These pieces of paper need to be treated as you would cash or checks.

Don’t just keep the completed slips in a box under the counter, secure them like you would cash.

The best test of your practices is to swap out the word “sales draft” for “$100 bill.” If the behavior you thought was appropriate when you called it a sales draft feels “wrong” when you say $100 bill, then you probably aren’t treating the sales draft with enough importance.

Terminal If you use a terminal, make sure it has not been – and cannot be – tampered with.

POS System If you use a POS system, the conversation just became even harder.

The POS system is usually tied to your computer servers, and there are many ways someone could access your server.

As illustrated by some of the publicly disclosed data breaches, server access doesn’t require physical access to your building. So make sure you know all of the ways someone could access your servers and that you are protecting those access points.

Remote access is usually the reason someone who uses a POS system suffers a data breach. Just as you limit the number of employees who have keys to the front door, limit the employees or vendors who have remote access to your servers.

If you would not give them keys to the front door (along with the alarm code), why would you give them the keys to your computer’s “front door?”

Data security is not a destination, it is a journey. You should always ask “why”: Why do we need this? Why are we doing it this way? Why does this person need access?

As always, if you have questions about this or any other merchant processing issue, please don’t hesitate to reach out to our customer service team at 800.563.5981 for assistance.

June 2015

9

IT’S THE LAW

Predictive scheduling latest retail challenge

by William J. Hallan, MRA Chief Operating Officer and General Counsel It seems like each year the retail industr y w re s t l e s w i t h legislation that has the potential to significantly change the business environment.

In 2014 it was minimum wage. Initiatives swept the country and, here in Michigan, legislators voted to increase the minimum wage in order to short-circuit a more aggressive ballot proposal.

This year’s issue is predictive scheduling, and it surfaced from a “retail workers bill of rights” first developed in San Francisco.

Generally, predictive scheduling requires employers to give employees notice of scheduling changes. Failure to provide advance notice, or changing of a schedule inside a two-week time frame, would require employers to pay employees varying amounts of “predictability pay.”

For example, a schedule change with less than 24 hours notice would result in four hours of predictability pay. Retailers must also inform employees of the estimated number of hours and shifts they will work monthly.

Proponents of predictive scheduling argue that with just-in-time scheduling, workers are at the mercy of their employers and have no ability to control their lives.

In actuality, it is often employees who desire flexible schedules. Many employees seek retail-based jobs for flexibility, and the legislation forces employers to deny last-minute timeoff requests.

Every retailer knows that schedul-

ing is a science that changes based on employee requests, weather, illnesses and customer traffic. A onesize-fits-all scheduling mandate ties the hands of the industry and could cripple many businesses.

“A o n e - s i z e - f i t s - a l l scheduling mandate could cripple many businesses.”

Local Pre-emption One of the most troubling aspects of predictive scheduling and other employment initiatives is that they are starting to crop up at a local level. Retailers with multiple locations throughout a state face compliance with different regulations for each store.

Fortunately, the Michigan Legislature is evaluating a bill that could put the issue to rest at the local level.

HB 4052 is commonly known as the local pre-emption bill. It would prohibit local units of government from adopting ordinances or policies related to employee wages or benefits, such as local minimum wage ordinances, local prevailing wage ordinances, local paid or unpaid leave mandates, wage or fringe benefits or scheduling mandates.

HB 4052 does not prevent statelevel action on employment issues, it just pre-empts local implementation.

Michigan Retailers Association strongly supports the bill and has been lobbying for its passage. With HB 4052, retailers won’t have to worry about issues like predictive scheduling at the local level.

Pre-emption bill moving forward Continued from page 1

The legislation, House Bill 4052, passed the House by a 57-52 vote on May 20, the day after it cleared the House Commerce and Trade Committee.

Opposition rose from local units of government, which see the preemption as an infringement on local control. The bill also drew fire from groups supporting specific workplace benefits, such as paid sick leave and higher wages.

The committee managed to hold two weeks of testimony despite several loud outbursts by visitors. Some were evicted from the meeting.

MRA had planned to testify in sup-

port of the legislation, but time ran out before the vote.

The bill as reported out by the committee included a clarification to allow local units of government to continue adopting and enforcing antidiscrimination laws that protect the LGBT community.

A bill similar to the House legislation was introduced in the Senate on May 19 as Senate Bill 337. Both SB 337 and HB 4052 were referred to the Senate Michigan Competitiveness Committee.

At press time, the Senate was expected to consider the legislation soon.

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0315

10

Michigan Retailer

www.retailers.com

Schwark brothers establish scholarship to honor parents Continued from page 1

The program’s scholarships are funded by the Michigan Retailers Foundation, a 501(c)3 organization that receives tax-deductible contributions from MRA members and others.

Named scholarships can be established under the “Links to a Legacy” initiative that enables major donors to leave a lasting legacy through a named scholarship.

Like all of the MRA scholarships, it is open to student applicants who work at an MRA member business or who have parents or guardians who do.

“We just wanted to find somebody who wanted to get a better education and needed some help,” Jim said, when asked how he and brothers Mike and Tom decided on the scholarship.

“We just want to help them out as best we can and honor our parents’ names in doing it.”

Self-Taught The annual $1,000 scholarship provides a boost Mr. Schwark never got.

“He was a child of the Depression,” Jim said. “He could never afford college. He taught himself business.”

After World War II, Mr. Schwark, who had served in the Army Air Forces, opened a couple of Army surplus stores in downtown Mount Clemens.

He then transitioned into the sporting goods business, selling that business to his father and brother when he decided to give the furniture game a go.

Mr. Schwark and a partner, Bill Dopp, opened the Dopp and Schwark

Furniture store in downtown Mount to switch occupations. and bank officials recognized his Clemens in 1957. When the partners The family also had developed the business savvy. split in 1962, Mr. Schwark took his furgolf club in Macomb Township, open“To my knowledge, he was the only niture sales know-how to downtown ing the 27-hole course in 1989. guy on those boards without a colUtica, opening the first Schwark Furlege degree. He was the smartest guy niture store.

No Retirement I ever knew who didn’t go to college.”

Satisfied his concept was working, While heading up those businesses, The Schwark family closed the furMr. Schwark left that rented space in Mr. Schwark served on several bank niture chain, which had 90 employees 1966, building a standalone at its peak, in 2003, after store in Shelby Township. In the auto industry slow1972, the store at 23 Mile and down caused business to Van Dyke Avenue became slide. The family retained part of the Shelby Square the shopping center and shopping center that the the golf course and Mr. Schwark family constructed.

Schwark remained active “We took half of it for the in both. He served as golf furniture store and leased course chairman until he out the rest,” recalled Jim, died. who joined his dad in busi“He didn’t believe in retirness after graduating from ing,” Jim said. “He said, ‘I’m the University of Michigan going to die with my work with a business degree in clothes on,’ and he did.”

1967. Mike now runs the center for the family.

Respect for Employees The Schwarks added a store Today, the brothers in St. Clair in 1984, one in Schwark split up golf Mount Clemens in 1989 and a Brothers Jim, Mike and Tom Schwark with a portrait of their late course leadership duties. second Shelby Township store father, Macomb County businessman Kenneth A. Schwark.

Tom, 65, is president and in 1993. The Shelby location, at CEO, 60-year-old Mike is 23 Mile and Schoenherr, also housed the boards. Beginning in the late 1970s, vice president and Jim, 70, serves as corporate offices. he served on the board of Security secretary/treasurer.

By that time, the younger Schwark Bank, the State Bank of Fraser and the Jim, who served on the MRA board brothers had established themselves Bank of Commerce and Security. He from 1998 to 2004, also has been in the business. Both joined in 1977, remained on successor boards as the consulting for furniture stores since when Mike graduated from Western banks consolidated. retiring as president of Schwark Michigan University with a business “He chaired the finance committees Furniture and joining Lynch Sales degree and Tom, a University of Michof these banks,” Jim said, adding that Company in Grand Rapids. igan engineering grad who had been his father’s committee service began The golf course employs about 80 working in civil engineering, decided when he went to get a business loan workers during golf season. In the offseason, the Schwarks maintain a skeleton maintenance crew, plus a staff of 30 to 40 workers who operate the year-round banquet center.

Most of the staff is the same year after year, Schwark said – the result of the family patriarch instilling in his sons that employees deserve the Chris Lynch, Co-CEO, Lynch Sales Company same respect as customers.

“We don’t have a lot of transition with For over 100 years, the family-owned Lynch Sales Company has employees,” he said. delivered on our promise to help our retail clients succeed through The first scholarship honoring the Lynch promotional sales, or close with dignity with our complete Schwarks’ parents will be awarded in closeout sales. I am particularly proud that many of those storeowners the spring of 2016 for the 2016-17 acareward us with their repeat business, time and again. Let them tell you demic year. It will provide the $1,000 why they prefer the integrity of our business model and our one-page award to a current high school senior or contract over that of our competition. college freshman, sophomore or junior.

MRA awards approximately 35 To hear more from successful retailers, visit scholarships every year. With the addition of the Schwark scholarship www.lynchsales.com/testimonials next year, 20 of the awards will be Legacy scholarships.

The competition for the scholarships runs annually from January 1 to April 1. The program is run by a national scholarship organization to ensure impartiality in the selections.

Additional information about the program is available at MRA’s webOVER 100 YEARS OF INTEGRITY AND RESULTS site, www.retailers.com.

Serving the U.S., Canada and the U.K. Call (800) 824 - 2238 or www.LynchSales.com Doug Henze is a freelance writer and Copyright 2015 Lynch Brothers Licensing Corporation former business reporter for the Oakland Press in Pontiac.

“When opportunity knocks, be sure to answer. Sign

up for a Lynch Sale today!”

June 2015

11

LOTTERY

Lottery ‘Replay’ feature to speed retailers sales

by M. Scott Bowen, Commissioner Summer is on the horizon and Michiganders across the state are making plans to get outside and enjoy time with family and friends.

To help maintain Lottery player traffic to our retail partners this summer, the popular Straight Back Bonus Daily 4 promotion is returning in June.

This promotion doubles the chances to win for all straight bet wagers and at no extra cost to players.

The Straight Back Bonus promotion is a favorite among Lottery players and is designed to attract players and offer them more chances to win. In 2014, Daily 4 sales increased by $1.5 million during this promotion.

Beginning June 1, the Straight Back Bonus returns and gives Daily 4 players the chance to win $1,000 if their straight bet numbers are drawn in reverse order.

For example, if a player plays a straight bet for 8-6-4-2 and the numbers drawn are 2-4-6-8, the player wins $1,000.

Best of all, the Straight Back Bonus automatically is applied to all Daily 4 straight bets, so there are no extra steps needed from retailer personnel.

This exciting promotion gives players more chances to win prizes in our popular Daily 4 game without adding any cost to their wager.

alternative for retailers and player. sReplay reprints all the selections from a draw game ticket including: numbers wagered, the number of draws, panels, bet type, wager amount and add-on game options.

Easy pick tickets will be printed with the same numbers as the original ticket, and EZmatch numbers on Lotto 47 and Fantasy 5 tickets will be generated randomly.

Replay wagers automatically include the next available draw and continue for as many draws as on the replayed ticket. Tickets must be replayed within 31 days of original ticket creation.

We expect the new Replay feature to help ease congestion at retailers’ Lottery terminals and improve the ticket buying experience for players.

Replay Feature The Lottery team is always looking for ways to make selling its products easier and more efficient for our retail partners.

With that in mind, the Lottery is proud to introduce a new terminal feature called “Replay” that will make selling Lottery draw games faster and easier.

Beginning June 7, the new Replay feature will be available on the terminal home screen. Replay allows a retailer to scan the barcode on an existing draw game ticket so players can replay their favorite wagers.

The replay feature will be available on all Daily 3, Daily 4, Club Keno, Fantasy 5, Lotto 47, KENO!, Powerball, Mega Millions and Lucky For Life tickets purchased on June 7 and afterward.

The Replay feature is not available on Poker Lotto tickets.

Replay is a convenient playslip

These games are set to expire: June 1 MI #509 – $25,000 Bankroll – $.50 June 8 MI #518 – Hot Cherries – $1 MI #585 – Power Slots – $.50

New Instants These tickets go on sale June 2: IG #719 – 2 For $1 – $1 IG #735 – Bonus Jackpot – $3 IG #740 – Monopoly Millionaires’ Club – $5 These instant games are set to expire: June 1 IG #655 – Bonus Cashword – $2 July 6 IG #670 – Snow Me The Money – $2 New Pull Tabs These tickets go on sale June 2: MI #555 – Diamond Deal – $1 MI #551 – Criss Cross Cash – $2

Retailers are reminded to activate all game tickets before putting them on sale to ensure winning tickets may be redeemed by players.

About 97 cents of every dollar spent on Lottery tickets is returned to the state in the form of contributions to the state School Aid Fund, prizes to players and commissions to retailers.

In the 2014 fiscal year, the Lottery’s contribution to Michigan’s public schools was $742.8 million. Since it began in 1972, the Lottery has contributed nearly $19 billion to education in Michigan. For additional information, please visit the Lottery’s website at www.michiganlottery.com.

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It’s that simple! When a Daily 4 player matches their number to the drawn number in “straight back” reverse order, that player wins a $1,000 payout.

With an extra chance to win on a straight bet, Daily 4 players will be coming “straight back” for more!