April 15 Michigan Retailer by Michigan Retailers Association

Spring Forecasts

Michigan storeowners overwhelmingly expect sales growth this spring, following a frozen February that chilled retail activity. Page 3

Buy Nearby Guy on the Move

The Buy Nearby campaign mascot plans a busy year promoting the benefits of shopping in Michigan. Page 6

Breastfeeding in Public

Make sure to comply with recent state regulations, including not discriminating against a mother who breastfeeds her baby in public. Page 9

® April 2015 Vol. 40 No. 2

Today’s ‘flex shopper’ demands best efforts in all retail channels Welcome to the new world of the “flex shopper.” Created by the ofttimes rocky, sometimes blissful marriage of retail and technology, this new shopper is “ruthlessly efficient” and switches sales channels and devices to best suit personal convenience when evaluating and purchasing products. That’s the conclusion of a recent “white paper” on the retail customer experience from logistics giant UPS and research analyst comScore, Inc. Not surprisingly, the study finds that today’s connected consumer has heightened the demands placed on all retailers. “Despite desktop’s reign, mobile’s emergence as a significant revenue channel and social media’s ability to influence, retailers must up their game and differentiate to compete in an omnichannel world,” it says. While the study focuses chiefly on the online retailing experience, it delivers messages for in-store retailers as well. Key findings include: • Convenience dominates the shopping landscape online and in-store. Rather than flex shoppers favoring one channel over another, their selections are often driven by convenience. With retailers continually improving on fulfillment and delivery times, the differences among channels are becoming less important to consumers. That makes it more important than ever for retailers to create compelling online and in-store shopping experiences coupled with exceptional service. The goal is to make shopping enjoyable and practically effortless, regardless of how it occurs. For example, more than 50 percent of online consumers ship items to the store at some point in the overContinued on page 8

The official publication of the Michigan Retailers Association

www.retailers.com

Slow, deliberate start for legislature Legislators have been back in Lansing for nearly three months without much new legislation to show for it – by design. With nearly one-third of the 148 representatives and senators being new

to the Capitol, there is a lot to learn. The new legislative leaders are making sure caucus members get as much education on the issues as possible. For example, in addition to holding dozens of get-acquainted meetings

Craft beer entrepreneur keeps business hopping

with first-term lawmakers, Michigan Retailers Association has given an overview of the retail industry to the House Commerce Committee. MRA also made a presentation on retail pharmacies, together with the National Association of Chain Drug Stores, to the House Health Policy Committee. And MRA provided an overview of the credit card payment system to the House Financial Services Committee. “It’s a slow start, especially compared to the frantic legislative activity at the end of last year,” said Amy Drumm, MRA director of government affairs. She was referring to the final days of the lame-duck session when lawmakers scrambled to tie up loose ends, including enacting MRA’s Main Street Fairness legislation and putting together a complex, $1.2 billion road-funding plan for the upcoming May 5 ballot. “Lawmakers are at work in their committees, but there is no great rush to push out legislation so early Continued on page 4

Webinar series begins in April

like myself.” What the Grand Rapids native ran into was the soon-to-take-off craft beer industry. In 2008 Sellers opened the first HopCat beer bar, in his hometown. Seven years later, Sellers’ company – BarFly Ventures – operates HopCat locations in East Lansing, Detroit, Ann Arbor and Indianapolis. The company also owns three other Grand Rapids bars: Grand Rapids Brewing Co., Stella’s Lounge and McFadden’s Restaurant & Saloon. “This is a huge year for us,” said Sellers, whose company had $1.8 million in sales in year one and $21

A new season of free webinars to help members improve their businesses begins in April with a session on how to protect your systems from cyber criminals. Three more sessions on hot-button issues will be held in May, June and July. Three begin at 8:30 a.m., and are repeated at 11:30 a.m. the same day. The first one, on April 22, starts at 9:30 a.m. and is not repeated. The online sessions are free to MRA members. They are produced by MRA and the national Council of State Retail Associations’ “Retail University.” Par ticipants must register in advance for one or all webinars 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.

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Strong growth is on tap for Mark Sellers’ HopCat beer bars in Michigan and beyond.

by Doug Henze When Mark Sellers opted to retire from the financial services industry at the still-energetic age of 38, his goal was simply to stay busy. “I was looking for something to keep me occupied, something I was proud of,” said the former Chicago investment fund manager. “I started a bar just for fun, just to be able to hang out. I wanted to have a place for craft beer lovers

Michigan Retailer

Springtime and numbers

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Board of Directors: Dan Marshall

Chair Marshall Music Company, Lansing

by James P. Hallan, MRA President and Chief Executive Officer As I pen this column, it appears winter has finally decided to exit gracefully and make room for spring. It’s not a moment too soon after another tough winter that chilled retail sales in February (see page 3). Having grown up in Holland, my

thoughts this time of year always turn to tulips. Red, yellow, purple – doesn’t matter the color – I love tulips, and they have thousands of them in Holland. Soon the downtown streets will be scrubbed and another Tulip Time

MRA accountant named controller Michigan Retailers Association named Cheryl Szczubialka as the organization’s controller, promoting her from staff accountant. She joined M R A’s p r o f e s sional management team in January 2014 as an accountant to assist then-Executive Vice President and Chief Operating Officer Szczubialka Jean Sarasin. Her financial responsibilities increased greatly after Sarasin retired

in July 2014, and her promotion places her in charge of the financial activity for MRA and affiliated entities Michigan Retailers Services, Inc., Michigan Retailers Foundation and Michigan Retailers Association Political Action Committee. Szczubialka earned an accounting degree from Michigan State University and previously worked as an auditor at Plante Moran. Prior to that she was an accounts receivable manager for a family owned business in the Lansing area. A Holt resident, she also previously worked at three retail stores, including serving as manager of two of them.

Treasury fixing new online system The Michigan Depar tment of Treasury is promising more improvements to its new online system for businesses filing Sales, Use and Withholding (SUW) returns. The depar tment said that in response to some businesses experiencing trouble using the system, it has posted on its website a list of improvements it has made or is making. Implemented in January, the Michigan Treasury Online (MTO) system “has been successful for many, while others have raised some concerns and frustrations,” the department said in a March 13 statement. “Our goal is to continue to improve the customer experience on MTO.” The list of improvements includes a description of each task and the sta-

tus of the work. The list is at www.michigan.gov/ mtobusiness. Website visitors also can find stepby-step tutorials on registration and navigation for the new system, the department said. Treasury alerted businesses earlier this year after the problems surfaced. It said it added phone lines and temporary staff to help address individual problems, but calls were taking longer than normal to resolve and hold times increased. The department said SUW taxpayers who experienced problems that kept them from filing returns or payments would be held harmless and would not be assessed penalty and interest charges.

ushered in. If my memory is correct, this will be the 86th such event. Another thing I love is numbers, because numbers can tell us stories about our business. At Michigan Retailers we use a dashboard to quickly tell us how we are doing as an organization. Like you, no doubt, we measure everything we can: membership and policyholder counts; merchantprocessing sales and terminal activations; cancellations; customer service calls and customer satisfaction; website visits; rental buildings occupancy, workers’ compensation sales; and even the price of gasoline and unemployment, to help give all those numbers some real-world context. The dashboard has become ingrained in our board meetings and was developed from our Third-Monday reports prepared monthly by our management team. The fun part is reading between the numbers to try to figure out how to make Michigan Retailers even stronger and more valuable to members. This year MRA will celebrate its 75th anniversary. In my book, that’s a good number. Another good number is that Retailers Insurance Company had a combined ratio of 99.6 percent in 2014 (which means it paid out less than $1 for every $1 in premium it earned). Other fun numbers are that we now have credit card processing accounts in all 50 states (plus the District of Columbia) and are on track to exceed $1.1 billion in merchant processing activity this fiscal year. Recently, the country celebrated National Pi Day. For those of you who remember geometry, pi is the ratio of the circumference of a circle to its diameter. It is always 3.14159… and goes on ad infinitum. My older sister, a math wizard and former teacher, told me she had a student once who could recite pi to the 200th place. An interesting fact, but I much prefer numbers that lead us to a conclusion rather than go on and on. Either way, as we enter Spring 2015, let’s hope the numbers are good to all of us. That sales are up, customer traffic strong, unemployment down and margins high. Oh, and be sure to take time to read those numbers closely for the important stories they tell.

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

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.

April 2015

MICHIGAN RETAIL INDEX

Michigan retailers forecast sales growth in spring 66.5 in December. A year ago February the performance index stood at 49.0. The 100-point index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Current

Performance Index

Looking forward, 75 percent of retailers expect sales during March– May to increase over the same period last year, while 9 percent project a decrease and 16 percent no change. That puts the seasonally adjusted outlook index at 78.5, up from 76.2 in January and 68.0 in December. A year ago February the outlook index stood at 61.7.

3-Month

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State sales tax receipts for February decreased 5.3 percent from the prior year and were $65.2 million below the forecasted level. Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www. retailers.com/mra/news/michiganretail-index.html. The website includes figures dating back to July 1994.

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Outlook Index

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640 553

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468

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Michigan retailers’ sales fell along with the temperatures during February, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago. However, the severe cold weather also pushed up retailers’ sales forecasts for spring. “Last month was one of the coldest Februarys on record in Michigan, and the result was a significant decrease in sales,” said James P. Hallan, MRA president and CEO. “Our monthly performance index plummeted more than 18 points as the thermometer fell below zero repeatedly.” “The good news,” he added, “is that retailers expect a strong spring as consumers shake off another harsh winter.” The February monthly survey of MRA members showed 31 percent of retailers increased sales over the same month last year, while 52 percent recorded declines and 17 percent reported no change. The results create a seasonally adjusted performance index of 41.7, down from 60.0 in January and

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)

Dec

Jan

Feb

Be sure to complete your online survey each month!

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Legislature getting off to slow, deliberate start Continued from page 1

in the new session,” said Drumm. Employer Protections One of the few pieces of legislation to move so far is a package of bills designed to provide employers with protection from the wage garnishment process. The bills, HB 4119 and 4120, increase the fee that creditors pay employers to administer garnishments. The fee would rise from a $6 fee to $35, specify that a Writ of Garnishment would continue until the debt was paid off, and establish a procedure before a creditor could take a default judgment against the employer for the full bad debt of an employee. MRA has been supportive of the legislation that was approved by the House 109-1 on February 19 and is now awaiting a vote of the full Senate. MRA is also working on a bill that would prohibit any local ordinance, resolution or policy regarding wages or benefits. The bill is a reintroduction of legislation from last year that failed to gain enough support before the session ended. It was reintroduced on January 22 this year as HB 4052 and referred

to the House Commerce Committee. The bill would prohibit local units of government from adopting, enforcing or administering ordinances, policies or resolutions establishing any requirement related to employee wages or benefits. That would include such items as local minimum wage ordinances, local prevailing wage ordinances, local paid or unpaid leave mandates, wage or fringe benefit mandates or scheduling mandates. For practical purposes it means that if an employment-related mandate were to be passed it would have to be done at the state or federal level, creating only one set of rules for all businesses to follow. “In larger cities across the country, such as Seattle and San Francisco, local ordinances have been a problem for employers,” said Drumm. “Retailers cannot afford the hassle of complying with 50 different solutions to the same problem. By ensuring that the state or federal government is the only entity to make these decisions for employers in Michigan, retailers with more than one location in the state or across the country would not face a patch-

work of laws to comply with on each issue.” MRA is working with a coalition of business groups to develop language and support for the legislation that will take a broader approach while also addressing employee-scheduling concerns. Energy Debate Activity on energy issues facing the state is heating up. Governor Rick Snyder released a special message on energy in midMarch focusing on renewable energy and reducing energy waste. The governor said he could support expanding Michigan’s renewable energy portfolio standard for utilities to 24 percent by 2025, up from the current 10 percent by the end of this year. He also would like to adopt a costbased target goal of 30-40 percent over the next 10 years. Customers have saved $2.5 billion by reducing energy waste since 2008, he said, a number that could rise under the governor’s plan. Also included in the message was support for the current choice system that allows up to 10 percent of electricity customers to seek an alternate supplier. Snyder said he would

not support eliminating or increasing the current 10 percent cap on choice. Finally, the message asked energy suppliers to prove they will have enough capacity over the next five years, since it typically takes about five years to build a new generating plant. Parts of the governor’s message conflict with legislation introduced by the House Energy Policy Committee chairman and others. House Action Bills switching to a fully regulated market (HB 4298), allowing energy generation from waste (HB 4297), expanding natural gas access (43034304), updating references to the regulation switch (HB 4299-4302) and repealing renewable standards (HB 4308) have been introduced. The House Energy Policy Committee began taking testimony on HB 4297-4304 on March 11. HB 4297-4304 would switch the state back to a fully regulated market and eliminate the 10 percent cap on the number of customers allowed to procure electricity from alternative suppliers. The bills were introduced by House Continued on page 9

April 2015

Craft beer entrepreneur keeps his business hopping Continued from page 1

million last year. “We’re going to pretty much double our sales.” Industry Growth Industry-wide, the number of U.S. breweries is growing by double digits, according to the Brewers Association, which represents craft brewers. The companies are independently owned and smaller than mega-brewers such as Coors. Total U.S. breweries increased from 2,456 in 2012 to 2,822 in 2013 – a jump of nearly 15 percent – according to

the group’s most recent statistics. Craft breweries still take in a small portion of overall industry revenues, according to the association, but they’re growing rapidly. Craft beer sales were about $14.3 billion in 2013, versus $100 billion for the industry as a whole. The growth of the craft beer industry is based on providing customers with product choices they didn’t have beyond the major labels, Sellers said. At HopCat’s larger locations, patrons can choose from 100 to 130 different beers, from brewers in Italy, Belgium, Germany and U.S. states, including Michigan. “There wasn’t anywhere you could go to get all these beers on tap,” Sellers said. “Patrons want to be able to sample a huge selection of different beers and figure out what they like. We offer them choice.” Brewers Guild Sellers gives a nod to Kalamazoobased Bell’s Brewery, which became the first Michigan brewery to open an onsite pub in 1993. Bell’s began selling beer in 1985. “Now we have over 200 breweries in the state of Michigan, alone,” Sellers said.

The Lansing-based Michigan Brewers Guild, formed in 1997 with about 20 members, now counts 153 state breweries among its membership, said Scott Graham, the group’s executive director. “In the last three or four years, there’s been an accelerating growth in the number of breweries opening,” Graham said. “People love local breweries and beer, and Michigan people like Michigan products.” Sellers believes the state has reached a saturation point, in terms of new players bellying up to the bar

with unknown labels. “I think now is a terrible time to start a new brewery in Michigan,” Sellers said. “You’re about five years too late. People have so much choice now that they don’t need more.” He sees much better prospects in states such as Ohio and Indiana, which have lagged behind the torrid pace set by Michigan and Colorado craft brewers. “I think there’s still going to be a ton of growth in states that are behind us,” Sellers said. That doesn’t mean established craft brewers can’t capture a larger share of the Michigan market, he said. Those brewers account for only about 6 percent of Michigan beer sales, according to the state brewers group. “I don’t think we’re near the top of the growth curve right now,” Graham said. “There’s still lots of growth to come.” The industry now accounts for more than 5,000 jobs and $277 million of economic output, he said. Anti-Chain Chain While BarFly brews beer at its original HopCat location – customers at the 8,500-square-foot Grand Rapids establishment can choose from six

HopCat beers or 40 made by other breweries – the company’s growth is in its “beer bars.”

any bar, features paintings of music greats Thelonious Monk, Miles Davis and Sly Stone. The East Lansing store,

“Patrons want to be able to sample a huge selection of different beers and figure out what they like. We offer them choice.” The newer HopCats offer beer samplings from around the globe but don’t produce any at their locations. Like any retail chain, HopCat loca-

tions have their constants – the food is the same and employees don’t wear uniforms. But HopCat – named for Sellers’ love of and formal training in jazz – gives each bar its own personality. “I’m not a fan of cookie-cutter [establishments],” Sellers said. “I basically want people to think of HopCat as the anti-chain chain.” The Grand Rapids location, in a 127-year-old building with a mahog-

opened in 2013 in a comparably sized but new building, is adorned with likenesses of Bob Dylan, Keith Richards and Jerry Garcia. In Indianapolis and Detroit, the HopCats are much larger, at 10,000 square feet and 12,000 square feet, respectively. The Indianapolis location opened in August, while Sellers opened the Detroit bar in December. College Towns When it comes to choosing locations, BarFly has stuck to a formula of setting up shop in college towns. “We find that people in college towns are more willing to try new things,” Sellers said. The company opened its newest location, an 8,600-square-foot store in Ann Arbor, in February. In June, a Madison, Wisconsin, location is planned, with two more to open in undisclosed locations outside Michigan later this year. BarFly, which now has some 750 employees – about 600 devoted to HopCat bars – expects to be built out by 2018. The chain wants to operate 10 to 15 HopCat locations and hit $90 million in sales that year. That’s music to anyone’s ears, especially a guy who eight years ago simply wanted to find something to keep himself busy. Doug Henze is a freelance writer and former business reporter for the Oakland Press in Pontiac.

Michigan Retailer

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Buy Nearby Guy plans busy year promoting MI retail Buy Nearby Guy expects a busy 2015 visiting local communities and retailers across the state to promote the importance of shopping in Michigan. This is the first full year for the giant mascot, who became a big part

of the campaign’s promotional efforts after being introduced to the public on July 23 last year. “Requests for Buy Nearby Guy appearances are coming in at a good clip,” said MRA’s James P. Hallan,

Anne Simonetti (left) and Siouxsan Miller, of Green Daffodil Studio in Ferndale, welcome Buy Nearby Guy to the Lansing Gift Show. Photo by David Trumpie

president and CEO “Community events, festivals, parades, special promotions, store openings, big sales – all make good venues for Buy Nearby Guy.” Between July 23 and the end of 2014, the mascot visited 31 communities and traveled 3,770 miles. “We expect those numbers to increase significantly this year,” Hallan said. Buy Nearby Guy’s first 2015 appearance was at Golden Shoes in downtown Traverse City on Valentine’s Day. Unfortunately, that weekend’s severe weather included “whiteouts,” road closings and double-digit below-zero temperatures. The weather curtailed or cancelled planned outdoor activities there and in downtown Petoskey, the mascot’s other destination that weekend. Buy Nearby Guy was warmly received at the Lansing Gift Show on March 8, Hallan noted. Retailers or community organizations can request a visit by submitting the form that links from www.BuyNearbyMI.com. New Sponsor Discover, a leading direct bank and electronic payment services company that in 1986 issued the first cash rewards card, has joined the Buy Nearby campaign as a supporting sponsor.

Bill Golden of Golden Shoes in downtown Traverse City takes time out from repeated snow plowings during a blizzard on Valentine’s Day to host Buy Nearby Guy.

“We’re excited to welcome Discover to the campaign and look forward to the company’s involvement in helping shoppers discover all the great shopping available in Michigan,” said Hallan. DTE Energy remains the campaign’s chief sponsor for the third consecutive year. “Buy Nearby wouldn’t be what it is today without the sustained involvement of DTE Energy,” Hallan said. “The company’s efforts support Michigan communities, businesses, employees and shoppers.”

The Detroit-based electric and natural gas utility received the first Buy Nearby Award from MRA’s Board of Directors at its January 20 meeting. The award is expected to be given annually to an individual or organization in recognition of outstanding support of the campaign. Dozens of Contributors The year-round campaign is “celebrated” with special sales and promotions in communities throughout the state on the first Saturday in October, also known as “Get Caught Blue-Handed Day.” This year it’s October 3. Additional sponsorships and individual contributions are welcome. Donations to MRA for Buy Nearby are used exclusively to promote the campaign. Between January 1 and February 28, 2015, more than 20 individuals contributed to Buy Nearby. MRA thanks the following donors from the first two months of this year: BJW Custom Jewelers, Craig Warburton, Ann Arbor M Mazzoni Jewelers, Mike Mazzoni, Farmington Baumans Running Center, Mark Bauman, Flint Becky Thatcher Designs, Becky Thatcher, Glen Arbor Mieras Family Shoes Inc., J. Michael Joyce, Grand Rapids Keane & Associates Inc., John Keane, Grand Rapids The League Shop Inc., Patricia Reynolds Brinker, Grosse Pointe Farms Home Heating & Air Conditioning, Dan Westveld, Holland Comar & Comar PC, Terence Comar, Kalamazoo Votruba Bootery Inc., William Vandis, Kalamazoo Earthly Delights, Linda Lipkin, Kalamazoo Meier Camera Shop, Jerry Meier, Midland Little Forks Outfitters Inc., Bo Brines, Midland Norm Henry Shoes, Carla Merrill, Owosso Votruba Leather Goods Co., Kerry Glaesmer, Traverse City

Buy Nearby Guy gives thumbs up to Connie Hahne and her Michigan Mittens at the Lansing Gift Show. Photo by David Trumpie

April 2015

RETAIL TECHNOLOGY NEWS

Prepare now for increase in card-decline frequency 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. Here are some of a merchant’s least favorite words to say to a customer: “I’m sorry, your card has been declined.” There are many possible consequences from uttering those words. First, all the goodwill and trust you’ve built with the customer can start to evaporate. Second, you are at risk of “losing the sale.” Third, depending on how you handle the situation, you may be at risk of losing the customer forever due to the uncomfortable situation those words created. Unfortunately, there are likely to be a lot more of these declined transactions in the near future. The reasons? Government and technology. Overdraft Protection The federal treasury’s Office of the Comptroller of the Currency (OCC), one of the many agencies that oversee the rules for banks and credit unions to follow, has s t a r t e d t h e p ro c e s s t o m o re closely regulate (some might say overregulate) the service known as overdraft protection. How does this impact merchants? If a consumer has overdraft protection on his or her personal account and presents a valid debit card (signature or PIN debit) for payment, that consumer is more likely to receive a successful approval code for the transaction. The reason is that if the consumer has made an error in his or her check register and the transaction will “overdraft” the account, there would still be an approval code because the consumer had signed up for a fee-based program at the bank to cover any shortfall. If the OCC and the federal government limit or eliminate the service of overdraft protection, consumers who make that same error in their check register will receive a decline code. Stay tuned for more as this process works its way through the governmental oversight process.

Tracking Transactions Another reason we may see more declines is because the issuing banks, in an attempt to prevent more fraud, are getting better at tracking transactions and alerting merchants to potential fraudulent ones. This, along with better and faster ways to securely communicate with their customers, could increase decline frequency. During a recent trip to Denver I attempted to rent a car. I have a primary card that I use for these types of transactions, and it is set up to text me each time it is used. This setting is helpful for me to track usage and possibly catch fraud as it is happening. As I was standing at the rental car counter completing paperwork for the car, the clerk swiped my card and I received a text alert immediately. But this one was different. The card had been declined, even though I had sufficient credit. The text was an alert that the bank believed a fraudulent transaction had just been processed. The message went on to ask if it was really my transaction, and was I in Denver? It allowed me to answer in the affirmative to both and then prompted me to have the clerk rerun the transaction. This time it was successful. As technology changes, we can be sure to see more and more of these types of events. Staff Training These developments make it all the more important to know how your staff is going to handle a decline. You need to know not only from a business operations standpoint but also from a customer service standpoint. Although you might not be able to avoid saying those unhappy words “I’m sorry, your card has been declined,” you can, with greater understanding of the situation, be able to soften them or at least explain possible reasons why. As always, if you have questions about this or any other merchant processing issue, please don’t hesitate to reach out to our expert customer ser vice team at 800.563.5981 for assistance.

Webinar series begins in April Continued from page 1

The schedule: Data Security: What Every Retailer Must Know and Do Wednesday, April 22; 9:30 a.m. Presented by Josh VanDyke, InfoTech Solutions Description: Data breaches happen every day in every size of business, including Main Street businesses. Cyber criminals are out there looking for easy targets. If you’re not prepared, they can quickly hack into your computer system and drain your bank accounts, access your proprietary information and steal private information about your customers. Retailers must implement proper security control to protect themselves and their customer data from this growing threat. This webinar will help you learn the problems to watch for and the immediate steps to take to help safeguard your systems. Josh VanDyke is an IT Manager with Infotech Solutions. He brings a wealth of knowledge about some of the current security issues and risks affecting retailer networks and the POS networks used to process credit card transactions. Search Engine Optimization (SEO) Fundamentals for Retailers Thursday, May 14; 8:30 a.m. or 11:30 a.m. Presented by Sarah Benoit, JB Media Group Description: Is your company website doing all it can to promote your business and bring in customers? Are you searching for ways to increase your exposure online? The webinar will help you learn the basics of search engine optimization and simple ways to leverage your website in order to increase traffic, sales and conversions. You’ll also gain a better understanding of what your website can do for your business using targeted online content strategies and proper website tracking systems. Sarah Benoit is a web development and Internet marketing strategist dedicated to making the field of Internet marketing accessible and easy to understand for business owners and marketing professionals. She is currently director of training at JB Media Group, LLC and lead instructor at the JB Media Institute in North Carolina. Changing Consumer Purchasing Patterns: What Do I Need to Know about Apple Pay, NFC, EMV and More?

Wednesday, June 10; 8:30 a.m. or 11:30 a.m. Presented by John Mayleben, Michigan Retailers Association Description: 2015 is the year of change in the payment processing landscape. Not since the early 1980s, when the industry migrated to mag-stripe cards and terminals that read the stripe, has there been such a dramatic change in the merchant processing arena. If you have ever wondered what the impacts of these impending changes are or wondered if you really need to upgrade your terminal, this is the webinar for you. John Mayleben, CPP is Michigan Retailers Association senior vice president, technology and product development, and a national expert on electronic payment processing. He was the first person in Michigan and among the first in the nation to receive the Certified Payments Professional designation from the Electronic Transactions Association. Retail 101: Tips to Help You Maximize Your Retail Success Wednesday, July 15; 8:30 a.m. or 11:30 a.m. Presented by Nicole Leinbach-Reyhle, Retail Minded Description: 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 cofounder of the Independent Retailer Conference.

Michigan Retailer

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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.

Michigan’s choice for workers’ compensation and group dental insurance. Now providing EFT Guard to protect our workers’ compensation insurance policyholders’ business banking from cyber criminals and other unauthorized electronic transfers.

Shipping Savings • Members participating in MRA’s Shipping Savings program saved a total of $2 million through the end of last year. That works out to $5,163 savings per participating member and $3.23 per package. To enroll in the free program, contact MRA’s Kathy Wilson.

To learn more, ask your Independent Agent, call 800.366.3699 or visit www.RetailersInsurance.com. 0315

SmartData by MRA • Remember, members’ free trial of SmartData by MRA, the new, easyto-use sales data analysis tool that shows you how to increase sales, runs through April 30. Call us to begin receiving your weekly email analysis of your credit and debit card sales or with questions about accessing additional valuable information. Credit Card Processing • Effective October 2015, you should have a processing device that reads EMV (chip) and NFC (contactless) cards. Contact customer service to discuss your equipment options. • If you receive a call stating you have a Non-Compliant terminal, the call is a scam! Contact customer service to verify if your terminal is compliant.

• Keep your customers happy and don’t lose potential sales. Contact us if you would like to accept American Express. • To keep your processing costs low, answer all prompts on the terminal, including AVS (street number and zip code), CVV (3-digit security code on the back of card), Sales Tax (sales tax amount only), PO Number (if you don’t use a Purchase Order number, the default would be the last four digits of the card number). • Credit card fraud is on the rise. Our customer service staff can verify any suspicious email, phone or Internet orders you receive. Call us before processing the transaction. • Don’t forget to notify Customer Service of any tax id, bank account or business changes. • To prevent customer disputes, we can add your return policy on the credit card receipt. Contact us to discuss adding a footer line. • On occasion, you may receive a phone call or email from one of our merchant processing partners – Control Scan (PCI Compliance) or TransFirst (processor). Both partners will be able to provide your Merchant ID number to validate who they are. Therefore, please ask them to confirm your merchant account information before proceeding. • These terminals are no longer PCI Compliant and need to be upgraded: Zon, Tranz, Omni, Hypercom T7P, Nurit. Please contact Customer Service to obtain upgrade options. • Data security compliance is mandatory. You must complete an annual PCI Self-Assessment Questionnaire to verify if your business is PCI compliant. Visit http://www. compliance101.com to begin the questionnaire.

Today’s ‘flex shopper’ demands best efforts Continued from page 1

all process. And only 50 percent are satisfied with the ease of making a return and the clarity of retailers’ policies. Also, 82 percent of shoppers respond positively to the ability to return a product to the store or ship it back using a pre-paid label. One in four consumers prefers packages to be delivered to locations other than their homes. • Comprehensive information is essential. Information is central to decisionmaking and retailers are not always supplying enough information to help shoppers make up their mind, which often results in a lost sale.

Only 68 percent of online shoppers are satisfied with the amount of product detail to help them determine what would best meet their needs. Only 59 percent are satisfied with the ability to find a customer service phone number or other contact option during the search phase of their shopping experience. Similarly, only 60 percent are satisfied with the ability to find a retailer’s return policy, and only 53 percent are satisfied with access to customer service information within the checkout process. In fact, when comparing retailers where they might make a purchase, consumers value detailed product information and photos a close second to product selection.

April 2015

Legislature off to slow start Continued from page 4

Energy Policy Chairman Aric Nesbitt (R-Lawton). The chairman expressed his belief that a hybrid market will not function long-term. He said some states that have deregulated have made the switch back to a fully regulated market. He believes the change will save ratepayers up to 5 percent and will address the concern about lack of new electric generation. Customers currently using alternative suppliers would be phased back into a regulated market as their current contracts expire. The committee is expected to continue to discuss the bill package for several weeks before taking any action. Budget Season Another reason for the legislature’s deliberative start is the large amount of time spent on approving a budget for the next fiscal year, which starts October 1. The governor presented his proposal in February and the House and Senate work off it to approve their own versions. Budget subcommittees in each chamber will likely approve a first draft by the end of March, and then the full chamber will begin reviewing the subcommittee recommendations. The state must finalize the budget by the start of the new fiscal year. Since Gov. Snyder took office, budgets have been completed in June before legislators break for the summer recess. This year revenue estimates were lower than originally projected, which puts additional strain on the budget process. In addition, revenue for transportation funding will not be decided until after voters decide the fate of Proposal 1 – the road-funding package that includes increasing the state sales tax to seven cents on the dollar. The legislature also had to fill an estimated $330 million shortfall in the current year budget. The shortfall is attributed to tax credits granted between 2003-2010 under the Michigan Business Tax that are still being claimed despite the tax being replaced. Lawmakers did make relatively quick work of approving cuts to offset the shortfall, approving the gover-

nor’s Executive Orders. License Fee Increases Noteworthy for the retail industry is that included in the governor’s budget proposal are proposed fee increases for retail food licenses and liquor licenses. His budget originally called for retail food license fees to increase by nearly 300 percent overnight. The Department of Agriculture and Rural Development (MDARD) has since agreed to work with food processors, grocery stores and restaurants to phase in the license fees in a yearover-year period. The phased-in approach would cut the increase to 58 percent each year for three years. Food license fees have not been increased in nearly 15 years. The annual license fee is currently $67 and, if approved by the legislature, could increase by $39 annually until reaching $183. An extended retail food license, which covers licensees that serve unpackaged food for immediate consumption and provide customer seating in the food area, is currently $172. If approved by the legislature it could increase by $99 annually until reaching $468. Retail liquor license fees could also rise, by a 50 percent increase under the governor’s recommendation. The majority of fees have not been increased since 1976, and the Michigan Liquor Control Commission only receives 41.5 percent of the revenue from fees to support licensing, enforcement and technology upgrades to replace the Commission’s outdated electronic licensing database. The rest of the revenue collected from the fees goes to local governments for enforcement, the state’s general fund for substance abuse programs, and the school aid fund. The proposal includes a fee reduction by half after three years. Legislators have questioned the need for the fee increases, since the commission has returned revenue to the general fund in recent years, and funds to update technology were included a few years ago.

IT’S THE LAW

Be sure you comply with new regulations by William J. Hallan, MRA Chief Operating Officer and General Counsel Operating a business is complicated enough without also having to worry about things like government regulation. It’s amazing how many hoops retailers must jump through just to make sure they don’t end up on the wrong side of a state audit. Much of our time at MRA is spent trying to eliminate burdensome regulations, or at least make them more palatable. In 2014 the legislature added a few more wrinkles for retailers in Michigan. You can review several of the larger new requirements below to make sure your business is in compliance. Breastfeeding In June of 2014, Governor Rick Snyder signed legislation (Public Act 197 of 2014) that protects the right of women to breastfeed in public places, including retail stores. The law is known as the “Breastfeeding Anti-Discrimination Act,” and it states that owners and operators of stores and other places of public accommodation cannot deny goods, services, facilities, privileges, advantages or accommodations to a woman because she is breastfeeding. The law also prevents owners and operators of such businesses from printing or posting statements that deny a woman full and equal enjoyment of the goods or services because she is breastfeeding a child. A person who violates the act may be required to pay damages of $200 plus legal costs to the woman who is subject to the discrimination. The law took immediate effect last

year, so retailers should ensure they are in compliance. Food Safety Training New legislation (PA 516 of 2014) was passed that would require food service establishments to employ at least one managerial employee as a food safety manager. The food safety manager must be certified and complete training concerning food allergies. Food service establishments must also display and post certain information in staff areas regarding food allergy awareness. The law covers food service establishments in retail grocery stores. Food safety managers will have until January 14, 2017, to complete the training program (online program or video), which must be completed every five years thereafter. 911 Surcharge One regulation that is not new, but knowledge of which has not fully penetrated the industry, relates to the collection of certain 911 fees on prepaid wireless telecommunication services. Effective January 1, 2013, sellers are required to collect a 911 surcharge of 1.92 percent on prepaid wireless telecommunication services (ex. prepaid cell phones). Sellers must also disclose and itemize the surcharge on the invoice or receipt. Small transactions are exempt from surcharge collection. Specifically, sellers are not required to collect the surcharge if wireless services are sold with a prepaid wireless device and the service denominated is 10 minutes or less, or $5 or less. Although regulatory compliance is often a burden, it’s always better to comply at the outset than ask for forgiveness after a violation.

Offer Gift Cards, Increase Sales. Upscale Image Simple Setup Greater Security Return Visits

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Michigan Retailer

NEW MEMBERS Everitt Properties LLC, Alma Thomas J McDonald DDS, Alma Electrical Unlimited LLC, Alto Therapeutic Riding Inc., Ann Arbor Ann Arbor P.T.O. Thrift Shop Inc., Ann Arbor M & M Equipment Auto Sales Inc., Battle Creek Pachyderm Pub, Burton Circle of Friends Child Care LLC, Burton Crowned Free, Byron Center Countryside Veterinary Service, Cement City The Rubber Biscuit Bar & Grill, Charlotte Susan’s Hallmark of Clarkston, Clarkston TransFirst LLC, CO Ozzie’s Food & Spirits, Detroit Woodward Cocktail Lounge, Detroit Blue Diamond Lounge, Detroit Donny’s Funky Broadway Enterprises Inc., Detroit Atlas Pharmacy, Detroit Campbell’s Smoke Shop, East Lansing Whippletree Financial PC, East Lansing Headlites Bar & Grill, Erie Omnicall Equipment Corporation, Farmington Hills St. Luke N.E.W Life Center Inc., Flint The Bookman, Grand Haven Coopersville Outhouse 5K, Grand Rapids Grand Valley Tri, Grand Rapids FUNderwear 5K, Grand Rapids Spectrum Health Irish Jig, Grand Rapids

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RE: RETAILERS

Kent City Ridge Run, Grand Rapids Hudsonville Eagle 5K, Grand Rapids Horsepower 5K, Grand Rapids Gail Easter Memorial Run, Grand Rapids Nordic Products Inc., Grand Rapids Striders Saturday Classic, Grand Rapids Mountain Pi Run Walk, Grand Rapids Wheel Run together 5k/10k, Grand Rapids Vollworth & Baroni Companies, Hancock Tenny Plumbing, Hazel Park Cotton Bay, Holland Eighth Street Salon LLC, Holland Wrangler’s Saloon, Howell National Association of Chain Drug Stores, IL Dienetics, Jenison Westside Family Medical Center PC, Kalamazoo Fox Bros Co., Lansing Hufnagel’s Auto Repair, Lansing Loomis, Ewert, Parsley, Davis & Gotting PC, Lansing Mediteran Cafe, Lansing All Season Mobile Marine & Repair LLC, Ludington Brewer Farms Condo Association, Marshall Instinctively Natural K9, Milford L-1 Bar & Grille, Mount Pleasant Dog House Saloon, Muskegon The Patio, Muskegon Hockey Has Heart, Northville Great Lakes Belting & Supply Corp, Paw Paw Sunset Builders, Pentwater Golf Cars +, Plainwell

Int’l gourmet food retailer marks 110th anniversary G.B. Russo & Son, Grand Rapids, whose tagline is “Enriching the Good Life, with Food & Wine from Around the World, Since 1905,” is celebrating its 110th year in business. The company kicked off the celebration in February with month-long specials, giveaways and events. The company specializes in international gourmet food and offers thousands of wines, craft beers, a delicatessen, homemade frozen entrees, kitchenware and more. Upscale menswear designer John Varvatos chose downtown Detroit for his first Midwest store, opening up shop on Woodward Avenue at John R on March 13. The metro Detroit native, who opened his first store in New York City’s SoHo neighborhood in 2000, called it a homecoming and says on the store website: “I look forward to being a small part of building the future of this great city. Get on the Detroit train. It’s going to be a magical ride.” The store, which carries his name, is located in the former Wright Kay Building built in 1891.

“When opportunity knocks, be sure to answer. Sign

up for a Lynch Sale today!”

Chris Lynch, Co-CEO, Lynch Sales Company

For over 100 years, the family-owned Lynch Sales Company has delivered on our promise to help our retail clients succeed through Lynch promotional sales, or close with dignity with our complete closeout sales. I am particularly proud that many of those storeowners reward us with their repeat business, time and again. Let them tell you why they prefer the integrity of our business model and our one-page contract over that of our competition.

To hear more from successful retailers, visit www.lynchsales.com/testimonials

Nominations are being accepted through July 31 for the 2015 Tire Dealer Humanitarian Award. The annual award, sponsored by Tire Business newspaper, recognizes an independent tire dealer or retreader who is making significant contributions to the betterment of his or her community through volunteer, charitable or public service work. The winner receives a medal and a $2,500 donation to the charity of his or her choice. The award will be presented at this fall’s Specialty Equipment Market Association show in Las Vegas during the Tire Industry Association’s annual Tire Industry Honors program. The award, now in its 22nd year, is open to any independent in North America. Nominees must have an ownership in the business. Nomination forms are available in Tire Business and at www.tirebusiness.com. The Sea Life Michigan Aquarium at Great Lakes Crossing Outlet Mall in Auburn Hills opened to the public on January 29 with a ribbon cutting ceremony. Rave reviews and good crowds have followed the opening. Construction began last year on the 35,000 square feet, 150,000-gallon aquarium that’s home to more than 5,000 creatures and 250 species, including sharks, coral reefs, stingrays, a giant pacific octopus, turtles and more, split into nine different zones. There’s also a 180-degree under water tunnel for people to see animals swimming above and around them, and an interactive touch-pool with sea stars, sea snails and other creatures. Admission is $23.50 for adults and $18.50 for children ages 3-12. Meijer rose three spots to number 14 on the Supermarket News ranking of the top 75 retailers and wholesalers in the United States. The publication

estimated annual sales for the privately held, Walker-based company at $15.7 billion. SpartanNash, headquartered in West Michigan’s Byron Township, also appeared on the list. It took 30th position with $8 billion in sales. Last year it was ranked 29.

April 2015

LOTTERY

New ‘Cash For Life’ games to offer bigger paydays by M. Scott Bowen, Commissioner The phrase “for life” resonates strongly with Michigan Lottery players. Hearing that a game offers a prize “for life” quickly gets Lottery players daydreaming about winning the big prize and how it would change their lives. That’s why the Cash For Life instant games have been some of the most popular and successful games offered by the Lottery. The next round of Cash For Life games is designed to generate even more excitement by offering the biggest top prizes ever in the Cash For Life family of games. On April 7, the Lottery will debut a redesigned “for life” instant game with larger top prizes than last year’s counterparts. The new Cash For Life instant game family will include: • $500 A Week For Life ($1 per ticket, with a top prize $100 larger than the 2014 game) • $1,000 A Week For Life ($2 per

ticket, with a top prize $200 larger than the 2014 game) • $2,500 A Week For Life ($5 per ticket, with a top prize $500 larger than the 2014 game) • $5,000 A Week For Life ($10 per ticket, with a top prize $1,000 larger than the 2014 game). We’re excited about the sales opportunities the new “for life” games will bring retailers across the state. We expect the bigger top prizes offered in each game to attract more players and to continue to make “for life” instant games a player favorite. The refreshed ticket design will also make the new games easy for players to recognize on retailers’ shelves, and that is expected to promote sales. New Instants These tickets go on sale April 7: IG #725 $500 A Week For Life $1 IG #726 $1,000 A Week For Life $2 IG #727 $2,500 A Week For Life $5 IG #728 $5,000 A Week For Life $10 These instant games are set to expire: April 6 IG #640 Black & Gold $10

IG #649 50X The Cash $2 IG #658 $50,000,000 Celebration $5 IG # 661 20th Anniversary Wild Time $20 IG #669 Frogger $2 IG #671 Lucky Number Bingo $2 May 4 IG #621 $100,000 Bingo $3 IG #648 Life In The Cash Lane $10 IG # 662 Oh Deer! $2 IG #663 Golden Gift $2 IG #664 Silver Bell Bucks $2 IG #665 $500,000 Riches $2 New Pull Tabs These tickets go on sale April 6: MI #557 Detroit Tigers $1 MI #540 $1,000,000 Riches $5 These games are set to expire: March 28 MI #523 10x The Cash $1 April 13 MI #504 Casino Craze $1 MI #506 Win Big $1 MI # 517 Deer Camp $1 April 27 MI #513 Detroit Lions $1 May 1 MI # 505 $100,000 Mega Bucks $2 May 18 MI # 512 Quick Cash $.50

Delta Dental delivers big on smiles and even bigger on savings When an employer group chooses Delta Dental, its employees gain access to the largest selection of individually contracted dentists nationwide. This results in more people getting the dental care they need from the dentists they prefer. You can count on a larger network to drive more value overall. Our dual networks deliver higher network utilization rates, greater balance billing protection for members and industry-leading effective discounts. And that’s sure to make everyone smile.

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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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