3
Early Shoppers
Michigan retailers began the holiday shopping season with a head of steam caused by shoppers starting early. Page 3
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Marketing to Smartphones
Isn’t it time to increase your business by marketing to the mobile phone device in just about everybody’s hand? Page 8
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Bounty Hunters
The old item pricing law is gone, but the wrong-price bounty remains. Learn how to protect against bounty hunters. Page 9
® December 2012 Vol. 37 No. 6
More than $30,000 available for 2013-14 scholarship awards Michigan Retailers Association’s annual competition is expected to award $34,000 in education scholarships in the spring for the 2013-14 academic year. At least 34 one-year scholarships will be available. The scholarship program benefits the employees and families of MRA member businesses. It is funded by the Michigan Retailers Foundation, which pays for the awards out of the earnings on foundation assets. The competition runs from January to April 1. Information will be sent to Association members, high schools, colleges and business groups in mid January. New for 2013 are the Barb Stein Legacy Scholarship, established by past MRA Board of Directors chair Barb Stein, and a second legacy scholarship for board member Joe Swanson. That brings the total number of legacy scholarships to 17. Legacy scholarships are named for Foundation contributors of $10,000 or more over their lifetime. Again this year, the program is trying to increase awareness that scholarships are available to students of the Gemological Institute of America (GIA) and other approved education and training institutes. Recipients are selected for their average to above-average academic performance and extracurricular activities, which can include part-time employment. Financial need is not a consideration. Those eligible to apply are high school seniors and college freshmen, sophomores and juniors who are dependent sons and daughters of owners or full-time employees of MRA’s nearly 5,000 member busiContinued on page 4
The official publication of the Michigan Retailers Association
www.retailers.com
Retail crime bills get past lame duck
One of the largest Capitol crowds in Michigan history made its voices heard as lawmakers acted on Right-to-Work legislation. Photo by Patrick Kerwin
Wireless world at center of energetic retail career by Doug Henze
When Brian Ducharme started in the wireless industry, it was almost another world. “Text” wasn’t a verb – it was something found in a book. Brian Ducharme No one considered a phone to be smart. “Tablets” were used to relieve aches and pains. That was 1987 and Ducharme,
now vice president/general manager of retail sales and services for AT&T’s Michigan and Indiana territories, worked for Cellular One in Milwaukee. The company, one of the first to offer wireless service, later was absorbed by AT&T. “New hires ask me which store I started in,” said Ducharme, who oversees sales at 108 companyowned stores with 1,100 employees, as well as 150 authorized retailers and 500-plus national chain stores that sell AT&T products. “I smile and say, ‘When I started, there weren’t stores.’” Board member That’s because the wireless industry wasn’t targeting consumers then, explained Ducharme, who was elected to the Michigan RetailContinued on page 5
The Michigan Legislature, meeting in a protest-filled lame-duck session before adjourning for the year, adopted a two-bill package that gives law enforcement officials better tools to go after organized retail crime. The legislation was a top priority for Michigan Retailers Association, which worked with Governor Rick Snyder’s office and State Rep. Joe Graves (R-Argentine Twp.) to put the legislation together and get it through the legislature. A l t h o u g h t h e re w a s s t ro n g bipartisan support for the anticrime measure, the legislation almost fell victim to the calendar and the 11th hour introduction and passage of highly contentious Right-to-Work legislation pushed by majority Republicans in both the House and Senate and supported by Gov. Snyder. The legislation, prohibiting companies from requiring workers to pay union dues or join a union in order to get or keep a job, won approval on Continued on page 2
Mutual to expand by adding dental Retailers Mutual Insurance Company will add a second line of insurance on January 1 when it takes over MRA’s dental insurance program. The move will be seamless and members enrolled in the dental insurance plan will see no change in benefits, rates or administration, said Jean Sarasin, MRA executive vice president and chief operating officer. Delta Dental will continue to administer the program. The move follows state insurance regulators’ approval of MRA’s request to dissolve its MEWA (Multiple Employers Welfare Arrangement Trust), which currently operates the dental insurance program, and move the program and MEWA assets to RMIC. MRA established Retailers Mutual in 2006 as a single-line company providing workers’ compensation insurance to a wide variety of businesses.
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Michigan Retailer
Shop Local/Shop Michigan
www.retailers.com
Board of Directors: Thomas Ungrodt Chair Ideation, Ann Arbor
by James P. Hallan, MRA President and Chief Executive Officer It has certainly been an interesting few days in Lansing. Emotions have run high as the legislature charts a new course for Michigan during one of the most active lame-duck sessions anyone can remember. Besides the newsworthy and sea change events at the Capitol, those of us at MRA have been trying to chart a new course for our retail members, one
that will help generate more local sales. To all of us involved in Michigan’s retail industry, the importance of “shopping local” is crystal clear. Many of us have been concerned about the rapid growth of pure Internet retailers and the unfortunate result of dollars not being spent or invested in local communities. The importance of supporting
Crime bills get past lame duck Continued from page 1
mostly party-line votes while some 2,000 chanting protestors and supporters filled the Capitol to capacity and a crowd estimated at more than 10,000 demonstrated outside. Democratic lawmakers, upset over the Right-to-Work legislation and its fast-tracking through the legislative process, threatened to withhold votes and stall on other issues awaiting action at the end of the session. But the organized crime bills won approval despite the partisan conflict. Organized theft Organized retail crime (ORC) is believed responsible for a large and growing share of the estimated $15– 30 billion in annual retail theft taking place across the nation. It involves “professional boosters,” who steal items for financial gain, not personal gain. “Organized retail crime is not shoplifting, because the thieves are really stealing with the intent to resell. It is not a theft of opportunity, it’s premeditated and part of a larger network of criminals,” said MRA Vice President Government Affairs and General Counsel William J. Hallan. These sophisticated criminals head to a store with a list of items they intend to steal for a client or to fence online or offline, he explained. They often disarm sensors, line purses with foil to evade anti-theft devices and work in teams to distract employees. These criminals are known to steal items that have a high-dollar value, including over-the-counter medicines, high-end designer fashions, infant formula, razors, weight-loss pills, cigarettes and electronics. After the items are stolen they are resold at a fraction of the retail price through pawnshops, online auction sites and flea markets. “Organized retail crimes are in-
creasingly linked to ‘gateway crimes.’ The thieves often sell the stolen merchandise for cash or drugs, which can be used to finance other major criminal activities,” Hallan said. Impact on retail A survey conducted last spring by the National Retail Federation (NRF) revealed that nine out of 10 retailers had been victims of organized retail crime in the previous 12 months. Losses from ORC hurt consumers through higher prices. NRF estimates that households pay $400 a year to offset retail losses. In addition, ORC is dangerous for both consumers and store employees. Criminals may be armed and often resist apprehension. Criminal flash mobs have been used to wipe entire shelves or stores clean. Consumers also are at risk because resold products may not be safe for consumption. Products such as infant formula and over-the-counter medications can expire or spoil from long storage or lack of temperature controls. Inadequate laws Current Michigan laws are generally limited and deal primarily with personal shoplifting. Prosecutors are left with a patchwork of criminal statutes that are not specifically applicable to organized retail crime and make enforcement difficult. Twenty other states have ORC laws, including Illinois and Ohio, said Hallan. Michigan’s legislation is modeled after the Illinois laws. The new Michigan legislation creates tougher rules stating that participation in an incident or intent to commit organized retail crime is a felony punishable by imprisonment for up to five years and/or a fine of $5,000 plus the cost of stolen or destroyed merchandise.
hometown and Michigan stores and websites is magnified during the Christmas shopping season, when so much is at stake. That’s why Michigan Retailers is taking on a major project to design a creative and effective campaign to encourage our state’s millions of consumers to do their shopping where it will do the most good. The MRA Board of Directors is committed strongly to this Shop Local/ Shop Michigan project and is leading the effort. A special board committee chaired by Barb Stein, owner of Great Northern Trading Company, Rockford, has just selected a strategic public relations firm to help MRA launch a statewide shop local/shop Michigan campaign in the fall of 2013. It’s an ambitious project, but one that should benefit every member of the Association. We’re encouraged by the fact that a growing number of organizations and consumers are talking about the importance of supporting the work of Michigan retailers, farmers, manufacturers, artists and the like. More and more, more Michiganders “get it.” There’s greater awareness that we’re all in this together and we can all benefit by doing business with each other. However, it appears that all these current efforts, while highly commendable, remain fragmented. What’s needed, in our opinion, is a large, statewide organization with the resources and connections to pull the different pieces and pockets together into a large, unified campaign. Michigan Retailers Association strongly believes we can play a unifying role and help create a statewide promotion that enables everyone to jump on board and achieve the critical mass necessary to make it work and make a measurable difference. We’re not kidding ourselves that this effort will be easy, or inexpensive. Up to now, nobody else has been able to pull this off. But we think this is the right time, the perfect time, to make a run at it. It will cost money, but the potential cost to our businesses and our state is far greater if we don’t make the effort. So stay tuned. We’ll keep you updated on what we’re doing and how everyone can get involved. In the meantime, best wishes for a successful holiday season, and let’s all Shop Local/Shop Michigan.
James P. Hallan
President and CEO Michigan Retailers Association
Dan Marshall
Vice Chair Marshall Music Company, Lansing
Peter R. Sobelton Treasurer Birmingham
Jean Sarasin
Secretary Michigan Retailers Association
Barb Stein
Past Chair Great Northern Trading Co., Rockford
Brian Ducharme AT&T
Becky Beauchine Kulka
Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos
Orin Mazzoni, Jr.
Orin Jewelers, Garden City
Joseph McCurry
Credit Card Group
Larry Mullins
Brandon Tire & Battery, Ortonville
R.D. (Dan) Musser III
Grand Hotel, Mackinac Island
Joe Swanson Target Corp.
James Walsh
Meijer, Inc., Grand Rapids
D. Larry Sherman
Board Member Emeritus
Michigan Retailers Services, Inc. Board of Directors: Bo Brines Little Forks Outfitters, Midland
Bill Golden
Golden Shoes, Traverse City
Lisa McCalpine-Wittenmyer Walgreens
James P. Hallan Thomas B. Scott Publisher
Editor
Pat Kerwin
Design Manager
Publication Office: 603 South Washington Avenue Lansing, MI 48933 517.372.5656 or 800.366.3699 Fax: 517.372.1303 www.retailers.com www.retailersmutual.com
Subscriptions:
Michigan Retailer (USPS 345-780, ISSN 0889-0439) is published in February, April, June, August, October and December for $20 per year by Michigan Retailers Association, 603 South Washington Ave., Lansing, MI 48933. Subscription fees are automatically included in the Michigan Retailers Asociation membership dues. Periodical postage paid at Lansing, Michigan. POSTMASTER: Send address changes to 603 South Washington Ave., Lansing, MI 48933. The Michigan Retailer may be recycled with other white office paper.
December 2012
3
MICHIGAN RETAIL INDEX
Retailers start season with good head of steam last year, while 34 percent recorded declines and 19 percent saw no change. The results create a seasonally adjusted performance index of 59.4, up from 54.0 in September. A year ago October it was 58.3. The 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 indi-
Current
cate positive activity; the higher the number, the stronger the activity. Looking forward, 57 percent of retailers expect sales during November – January to increase over the same period last year, while 17 percent project a decrease and 26 percent no change. That puts the seasonally adjusted outlook index at 72.1, down from 76.8 in September. A year ago October it was 64.4. State sales tax receipts totaled $621.1
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million in October, up 4.2 percent from a year ago. Year-to-date collections are 2.8 percent above last year. Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www. retailers.com/mra/news/michiganretail-index.html. The website includes figures dating back to July 1994.
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Michigan retailers began the traditional Thanksgiving to Christmas holiday shopping season with a head of steam caused by shoppers starting their gift buying early, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago. The state’s retail industry boosted its performance in October, setting the stage for what was widely expected to be a solid holiday season, the latest monthly survey of MRA members found. “After a lull in September, sales rose for more Michigan retailers in October,” said Tom Scott, MRA senior vice president communications and marketing. “Others’ surveys point to early holiday shopping as a likely reason for the rise. More than half of consumers reported having started their holiday shopping well in advance of the Thanksgiving weekend.” Three out of four Michigan retailers expected to increase sales this holiday season, many by more than 5 percent, according to the Index’s September survey. Their forecasts were the most optimistic in more than a decade. The October Michigan Retail Index found that 47 percent of retailers increased sales over the same month
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)
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Be sure to complete your online survey each month!
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Michigan Retailer
www.retailers.com
Fight for Main Street Fairness moves into 2013 The issue of Main Street Fairness and the steady drumbeat for a fair and level playing field for Michigan retail businesses will not let up, according to MRA President and CEO James P. Hallan. “While we’re disappointed that lawmakers haven’t gotten the job done this year, we’ll be right back making our case, stronger than ever, when the new legislature convenes in 2013,” he said. “This issue will not go away,” he added. “We refuse to let it go away.” The Main Street Fairness Act will be reintroduced early next year and begin working its way through the difficult legislative process once again. The two-bill package, which was introduced in bipartisan fashion in September 2011 and had two hearings before the House Tax Policy Committee, will die at the end of this year along with hundreds of other bills that weren’t passed during the 2011-12 session. There was a glimmer of hope for passage earlier in lame duck when the House Tax Policy Committee put the Main Street Fairness Act on its November 28 meeting agenda. But the committee removed it from discussion that morning and Lt. Governor Brian Calley’s presentation of the administration’s revised plan for Personal Property Tax (PPT) relief took up the entire committee session. The press of other major issues before the legislature, including the fast-track legislation to make Michigan a right-to-work state, helped run out the clock on Main Street Fairness. “We know we continue to have solid support for Main Street Fairness in the legislature, but lawmakers did not make it a priority while dealing with personal property tax reform, right-to-work, overhauling Blue Cross Blue Shield and many other tough issues,” said William J. Hallan, MRA vice president of government affairs
and general counsel. “We’re looking forward to the new legislature and to mounting a new charge to win passage of this legislation that is vital to Michigan’s retail industry.” Following are some common questions and answers about the issue. Main Street Fairness Q&A 1. What is Main Street Fairness? Main Street Fairness is legislation designed to protect Michigan’s retailers – chiefly brick-and-mortar retailers – by requiring certain out-of-state online retailers to collect and remit Michigan’s sales tax. 2. Who is currently required to collect and remit sales tax? Only retailers that have a physical presence in Michigan are required to collect and remit the sales tax. Some online companies further exploit this loophole by doing business in the state through subsidiaries or through a network of affiliates. 3. Does Amazon currently collect Michigan sales tax? No. But it should! Amazon has a wholly owned subsidiary, Brilliance Audio, located in Grand Haven, Michigan. Amazon also uses a vast network of affiliates in Michigan to sell products through its online site. 4. Why is Main Street Fairness important to me? Main Street Fairness levels the playing field for Michigan retailers who are at a disadvantage because they are required to collect the 6 percent sales tax. Without Main Street Fairness, consumers will continue to use our brick-and-mortar retailers as showrooms and avoid paying sales tax by purchasing products online. 5. How does the legislation work? The legislation creates a new definition of “physical presence” to include companies that operate in Michigan through subsidiaries or through an affiliate network. 6. Does Main Street Fairness only apply to Amazon? No. The legislation would apply to any out-of-state online company that has a physical presence in Michigan. 7. Would all online-only retailers be required to collect and remit sales tax?
No. Only retailers that have a defined physical presence in the state would be required to collect and remit sales tax. The defined physical presence includes companies that operate in Michigan through subsidiaries or through affiliate networks. 8. I have a brick-and-mortar store located in Michigan. How would the legislation affect me? Because you already have a physical presence in Michigan, you are already required to collect and remit Michigan sales tax. The legislation would remove the competitive advantage out-of-state online companies have and would allow Michigan companies to compete on a level playing field. 9. I have a brick-and-mortar store in Michigan but I sell products online to other states. Would the legislation require me to collect and remit sales tax for other states? No. The legislation only deals with Michigan sales and use tax. Some other states have passed similar legislation, but you would not be required to collect and remit sales tax in any of those states unless you have a physical presence in that state. 10. I’ve heard a federal solution is the only way to really change the law. Is that true? No. While Congress is the only entity that can tax interstate commerce, states can levy and address how state-based taxes are collected. 11. What impact does the legislation have on the state? The Michigan Department of Treasury estimates that $414 million was lost in 2010 due to uncollected sales tax revenue – largely from remote purchases – and the Department projects that number to increase each year (Michigan Department of Treasury, “Facts on Internet and Mail Order Purchases,” available at: http://michigan.gov/
taxes/0,1607,7-238-43529-155531--,00. html). Schools receive the majority of sales tax dollars raised, with 73 percent going to the school aid fund. 12. Aren’t online shoppers already required to calculate and pay use tax on their purchases when they file their income tax returns? Yes, but most do not. The majority of Michigan residents apparently do not know they are required to pay use tax on items purchased from out-of-state online or mail-order companies. This tax is due when an individual files a personal income tax return. 13. What are other states doing to address this problem? 14 states have passed similar legislation to end the unfair advantage out-of-state online retailers have over in-state retailers. These states include California, Georgia, Illinois, New York and Texas. And 13 states have come to an agreement with Amazon to collect the state sales tax, often prompted by legislative action. (Public Sector Consultants, “Individual States Moving Rapidly toward Internet Sales Tax Collection, An Addendum to Michigan Sales Tax Collection and the Internet: A Need for Fairness,” May 2012). 14. What can I do to help pass Main Street Fairness legislation in Michigan? Contact your state legislators to let them know how important it is to end this unfair advantage for nonMichigan businesses. Call or write your state representative and state senator to urge them to pass Main Street Fairness. To find your legislators, visit the “Get Involved” page at www.retailers.com under the Legislative tab. Please send your name and email address to Michigan Retailers Association (mra@retailers. com), too, so that we can keep you updated on efforts to correct this harmful and unfair situation.
More than $30,000 for scholarship awards Continued from page 1
nesses. Part-time employees who are full-time students may also apply. Applications must be submitted by April 1, 2013, to International Scholarship and Tuition Services, Inc., of Nashville, Tennessee, which coordinates the application and selection process for MRA and many other associations and companies. Students are encouraged to com-
plete the application process online at MRA’s website, www.retailers.com. Students may also contact MRA’s Laura Schilling at 800.366.3699 or lschilling@retailers.com by March 15 to request an application by mail or to check eligibility. The MRA program has provided 356 scholarships at a total value of $331,000 to students since 1999.
December 2012
Wireless world at center of career
Continued from page 1
ers Association Board of Directors at the organization’s Annual Meeting in August after having served on MRA’s services corporation board since 2008. The former Walled Lake area resident and Michigan State University undergrad has worked in nine different AT&T markets, from New
thing only a few people had, and they had only one. Now, everybody has at least one device and most people have more than one.” The rapid transformation to a consumer-oriented wireless world has made Ducharme’s position highly demanding. He expects the breakneck pace of product development and retail deployment to continue. “There’s going to continue to be more and more things that will be connected to the wireless network,” he said. One of the hot, emerging product categories is being called “appcessories” Brian Ducharme oversees more than 100 AT&T-owned stores and 1,100 retail employees in Michigan and Indiana. – programs downloadable to a tablet York to California to south Florida. or smartphone that will allow con“Our job was to…create interest in a sumers to manage their lives. Among product that could improve business those are “Swingbyte,” which records people’s efficiency and time managegolf swing analytics, and a wrist ment through use of a car phone,” bracelet that can record medical inhe said, adding that wireless providformation, such as blood pressure. ers offered a single plan at a flat rate. “I can even monitor whether my “Business people found the phones a 80-year-old mother is taking her medigood tool. Prior to that, people would cine,” Ducharme said, explaining that pull over and use a pay phone.” the opening of a medicine cap can The wireless industry made a major send a message to a wireless device. leap with the invention of the batteryNext year, AT&T is set to launch powered bag phone. Though bulky, Digital Life, a home monitoring system the devices allowed for portability. “It that provides electronic notifications would be like lugging around the old to consumers via wireless devices. camcorders,” Ducharme said. While at work, they’ll be alerted when Beginning in the early 1990s, evertheir basement is flooding or their smaller handheld phones moved the child arrives home from school. wireless industry into the consumer realm. By the 2000s, wireless phones Wallets were a mass consumer product. Phones also will become wallets, “That’s when you started seeing allowing users to download credit the Razr,” Ducharme said. “Back then, cards and family photos into them. less than 10 years ago, most people Retail purchases will be charged using didn’t even text. Now, that’s all some phones or other electronic devices. people do.” “That’s going to be a big thing in the next year or two,” he said. Tidal wave The spread of electronic devices It was the transformation of voice into every area of life raises quesnetworks to both voice and data nettions both about network capacity works that set the stage for the tidal and safety. wave of products – including hardTo make sure its network can ware devices, such as smartphones handle all the expanding consumer and tablets, and software applicademand, AT&T has spent $20 billion tions – flooding world markets. on capital improvements in each of “Now, you can perform thousands the past two years, Ducharme said. of activities through accessing appliThe company also has put safecations,” he said. “One of the hottest guards in place to secure data stored gift-giving items this season is expectin devices, he added, recalling how a ed to be a tablet.” pickpocket took his phone a couple In addition to the number of prodof years ago in Barcelona, Spain. ucts available, the spread of devices “I just stood there frozen for a coufrom heads of households to all fample of minutes,” he recalled. “What ily members is giving the wireless would have been nice is if, a couple market a charge, said the father of years ago, I could have notified sometwo girls who lives in Fishers, Indione who could have erased all that ana, with his wife of 26 years, Teresa. information.” “A mobile device used to be someContinued on page 7
5
Natural Gas Discount Program Michigan Retailers Association’s Natural Gas Discount Program has provided typical savings of 8 percent less than Consumers Energy and 4 percent less than DTE/MichCon. MRA offers members a solution to the high cost of natural gas. Whether you use natural gas to heat your building or produce the goods and services you sell, MRA can help save you money each month. Our program is tailor-made for the variations in the retail industry. You and your employees also can take advantage of these discounts on home heating bills. If you receive natural gas from Consumers Energy or DTE Energy (MichCon), we can save you money. • • • • •
No sign-up fees. No cancellation fees. No long-term contracts. Same billing and service – your current utility will continue to deliver your gas, read your meter, provide your billing and service your account. Nothing changes but the price you pay.
800.366.3699 www.retailers.com
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Michigan Retailer
www.retailers.com
Medicare and the magic moment of turning 65 by Craig Start, president of Member Insurance Solutions, a Michigan Retailers Association partner Enrolling in Medicare is a rite of passage, much like getting your first AARP membership solicitation. Approaching the Medicare-eligible age of 65 brings an onslaught of directmail solicitations from insurance companies, all offering some part of the alphabet soup that makes up the Medicare programs. If you get your health insurance through Michigan Retailers Association, we’ll be in touch with you six months before your birthday to let you know that Member Insurance Solutions (MRA’s partner in providing health insurance solutions) can help you through the process. We can simplify Medicare enrollment rules and translate the Medicare alphabet for you. Key parts Medicare Part A is hospital insurance; it is premium-free in most cases. Part B is voluntary insurance for medically necessary services, including doctor visits, durable medical equipment, home health services and some preventive services. You pay a premium for this insurance. It is best to sign up for Part A and Part B during the Initial Enrollment Period, which is from one to three months
before you turn 65. Doing so makes coverage effective on the first of the month that you turn 65, if your birthday is not the first day of the month. If your birthday is the first day of the month, your Medicare coverage is effective the first day of the month preceding your birth month. You can sign up during your birth month or up to three months after it, but your coverage will be delayed from one to three months after your enrollment date. If you don’t sign up during the Initial Enrollment Period, you can sign up between January 1 and March 31 each year, for an effective date of July 1. You will likely have to pay a higher premium for late enrollment. Under most circumstances, a 10 percent premium penalty is charged for not enrolling in Part A during the Initial Enrollment Period. A 20 percent premium penalty is usually charged for not enrolling in Part B during the Initial Enrollment Period. There are some exceptions, but it pays to enroll on time. Supplemental plan Part C is a Medicare Advantage/ Supplemental Plan. These plans cover the gap between what a hospital
or provider charges and the amount non-Medicare-eligible spouse get Medicare will pay, and may enhance into the right health insurance plan those coverages with vision, hearing, to meet his or her needs. dental and wellness programs. If you have questions, or want to These programs are offered by schedule a Medicare review appointprivate companies approved by Mediment, please contact the Member care. Most also provide Medicare Insurance Solutions Blue Cross deprescription drug coverage. Electing partment at 877.906.9924. Part C coverage is optional and premiums do apply. MEDICARE PYRAMID: BUILDING A COMPLETE INSURANCE PROGRAM Part D is Prescription Drug Coverage. These Part D plans are run by insurPrescription Pay Premium ance companies approved Part C by Medicare. Plans vary in Gap/Supplemental coverage and costs. If you Pay Premium do not enroll in a MediPart B Physicians Pay Premium care drug plan when you are first eligible, and you Part A Hospital Automatic-No Premium don’t have prescription drug coverage that is at least equal to what Medicare Part D Medicare is Primary would cover, you’ll probably pay a late Once you are enrolled in Medicare, enrollment penalty when you do apply. it becomes the primary payer for coordination of benefits purposes. This Consultations is also true if you receive Medicare You’ll be glad to know that Membecause you receive Social Security ber Insurance Solutions offers MRA disability benefits or have Medicare members personal Medicare-related because of End-Stage Renal Disease. consultations to help you make the It is important to let your insurance choices that are right for your circompany know that you have Medicare cumstances. We’ll also help your so that claims are processed correctly.
December 2012
7
RETAIL TECHNOLOGY NEWS
Are you ready for disaster? 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. I don’t know if the Mayan calendar (which appears to end abruptly later this year) indicates some impending disaster or not, but ever y business should have a detailed disaster plan in place in case something happens on 12/21/12 or any other time. Super Storm Sandy, with the billions of dollars in destruction it caused to homes and businesses this fall, is the latest case in point. But sometimes disasters don’t involve dramatic weather events or the fire department calling you at home in the middle of the night. Some disasters are more confined. For example, what if your credit card terminal was to fail in the middle of a weekend sale? Or maybe a customer or sales associate tripped on the cord and pulled the terminal to the ground, where it broke into pieces (this happens more often than you would think). What would you do between that moment and the arrival of the UPS or Fed Ex delivery the next business day? As part of your overall disaster plan, do you have a plan laying out the specific steps you and your employees would take to continue to accept credit cards until your electronic terminal is operating again? You should.
electronic way? If you have an imprinter, do you have carbonless sales drafts for it? Do those sales drafts truncate the customer’s copy of the sales slip? Does your staff even know how to use an imprinter? If you still have one stored away somewhere, it might be older than they are. Recently, a well-known national chain of sub shops had its POS system go down at 11:45 in the morning. Based on the amount of foot traffic I observed heading out the door with cards in hand instead of sandwiches and chips, I would suggest that at least one of their locations did not have a plan for this situation.
“What if your credit card terminal was to fail in the middle of a weekend sale?”
Imprinters Most of today’s merchants don’t have any of the “old fashioned” tools that many of us used for years. Do you have an imprinter (affectionately referred to as a “knuckle buster”) that lets you accept credit cards in a non-
A couple of months ago, I was in a fast food restaurant and was told, before ordering, that the restaurant was not able to process cards. I had cash, so I sat and watched other customers simply turn and walk out of the building without food. I am guessing they went across the street to a competitor that could handle the transaction. If you don’t have a plan, you should – and an imprinter is a simple way to start. If you don’t have an imprinter, you can still purchase one, and they aren’t expensive. If you have an imprinter but don’t have sales slips, your processor should be able to provide them. I would suggest that you take a minute to imagine a day (or two) without your electronic payments terminal. Then make a plan. Note: If you’re interested in getting more information about an imprinter or getting your hands on one, please contact Mr. Mayleben via email at jmayleben@retailers.com.
Offer Gift Cards, Increase Sales. Gift Card
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Wireless world at center of career
Continued from page 5
Today, apps allow a phone to be wiped clean electronically and the phone to be tracked. Information stored on servers known as the “cloud” then can be reinstalled on the phone. The technological advances continue to change the way people rely on phones – for much more than making calls – and tablets.
“They’re entertainment devices and they’re productivity devices and they’re devices to manage your life,” Ducharme said. “Truly, the sky is the limit. It’s going to be fun.” Doug Henze is a freelance writer and former business reporter for the Oakland Press in Pontiac.
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Michigan Retailer
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Ways to drive business through smartphones by Ed Borowsky
Smar tphones have become consumers’ primar y shopping companion – a trend that will continue to escalate as usage becomes more ingrained in
shoppers’ psyche. Smartphone users rely on their devices for many tasks. They will go online to find directions to your business, comparison shop while in your store, check your company’s reputation before purchasing, and read the reviews before buying the product they’re considering. This device now educates consumers like never before. A telling statistic: 54 percent of women and 67 percent of men stated they would rather consult their mobile phone than ask a salesperson for assistance when they are in your store. The bullets below will give you an idea of typical mobile user behavior when in your “showroom”: • 33 percent take pictures
• 32 percent compare prices • 27 percent read product reviews online • 26 percent scan a barcode • 23 percent look for coupons or use a coupon • 20 percent use the store app • 11 percent purchase and pay at the register. Here are several ways to take full advantage of this technology. Mobile-friendly website Most websites have been designed to be viewed on a computer screen. They do not convert well to a smartphone’s small screen, and copy is not
condensed to communicate messaging in a quick, concise manner. If your website is not mobile phone friendly, then it is safe to say that you are losing business. The following features are key to effective mobile website design: • Keep it quick. Mobile users are on the go and don’t have a lot of time to enter significant amounts of information. Make your site load fast by compressing images and make it easy to read by incorporating larger copy and bulleted text. • Simplify the navigation. Your mobile site should not confuse your viewers. If you have a complex site, search functionality will enable your visitors to find what they need easily. • Make the site thumb friendly. Mobile users navigate using their thumbs. You need to design your mobile site so that people with larger hands can interact with it with ease. Make buttons larger and give them breathing room to avoid or minimize accidental clicks. Make the text easily clickable. • Make your mobile website easy to read. There should be a significant contrast between background and text. Content should fit on the screen and be readable without zooming or pinching. • Yo u r m o bile site should be accessible. An ideal mobile website works across all mobile platforms and handset orientations. • Make it local. Most of the time, mobile users look for local information on their phones. It is important to include a functionality that lets people find you. • Make your website easy to convert. Make it easy for prospects to buy from you or contact you. Focus on product details and other information that will maximize conversion rates. Minimize the steps required to complete a sale. Keep forms short and make data entry easier by using scroll menus, lists or check boxes. Finally, utilize click-to-call functionality for phone numbers. Text messaging SMS stands for Short Message Service, and it’s also commonly
referred to as Text Messaging. It’s text only and lets you send messages that are no more than 160 characters. MMS stands for Multimedia Message Service, which can include audio, video and pictures, and up to 1000 characters of text. SMS has a higher open rate than emails. In fact, recipients open 95 percent of text messages within five minutes of receiving them. Compare that to emails that only have an open rate of just 5 percent. As a business owner, you can use SMS marketing in two ways: • Use it in direct marketing by sending a text message directly to your mobile subscriber list and make compelling offers to drive them to purchase. • Use it to enhance other forms of marketing you already are doing by connecting traditional mass advertising media like TV, radio and print with your mobile-friendly website, social media accounts or apps. Here is a real-life example: A restaurant sent out an SMS to its customers who chose to opt into the restaurant’s loyalty program. On Friday at 10:30 a.m. and then again at 4 p.m., text messages went out to its customer mailing list. The offer was BOGO (Buy One Get One) drink specials between the hours of 5 p.m. and 7 p.m. In addition, the restaurant chain sent out an MMS smart coupon with photography and text offering $4 appetizers (one per customer) to be redeemed during Happy Hour. Needless to say, the bar and restaurant were packed that evening! Coupons Are coupons as effective as they once were? Many feel they are not. That’s only true for print coupons, however. With mobile coupons, it’s a different story. Print coupons, specifically the ones you cut from newspapers and magazines, are sometimes difficult to track. Mobile coupons are highly measurable, allowing you to precisely track which coupons were redeemed, by whom and when they were redeemed. You can even see what other items were bought when they used the coupon. With the ease brought by digital technology, you can keep on testing and refining coupons to better increase your conversions. Quick Response (QR) Codes QR codes are like barcodes, but instead of a bunch of parallel lines the codes are two-dimensional, as illustrated.
When your phone’s camera scans the QR code, the user is redirected to a target URL. The QR code eliminates the need to enter lengthy website addresses, which is a hassle with mobile Internet browsing. You can use QR codes to direct a user to almost any online destination: a website, social networking site like Facebook or Twitter, Google Map location, App Store download, video, article, email address, text message, your contact details, a buy-now link or coupon. QR codes can be placed at locations throughout your showrooms and on merchandise tags. When scanned, the customers can view a myriad of information about that product. It can be utilized as an effective “silent salesperson” system. One example: a furniture store placed QR codes on its price tags throughout the showroom. Customers scanned the code with their smartphone, and all the information about that item was instantly displayed on their hand held device. On items that were on sale, coupons were sent via text message and offered special discounts redeemable right then and there! If you decide to use a QR code in your mobile marketing, use managed QR codes that allow you to track and analyze how often a code is scanned. Also, tracking QR codes that redirect users to different destinations lets you do some easy split testing to know which offers are most preferred by your target market. Direct communication Like television, radio, newspaper and billboards, the mobile phone is a new medium in which to communicate directly with your prospects. It will increase traffic/ sales, improve your company’s loyalty program and manage your company’s online reputation. Smartphone marketing is relatively inexpensive in comparison to other media. Several of the larger retailers have moved in this direction; however, most retailers have not. Isn’t it time to get ahead of your competition and increase your business by utilizing the mobile phone device in just about everybody’s hand? Ed Borowsky is CEO of Monarch Advertising. Monarch’s website is www.monarchadvertising.net.
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IT’S THE LAW
A ‘bountiful’ Christmas? Let’s certainly hope not by William J. Hallan, MRA Vice President Government Affairs and General Counsel We l c o m e t o the 21st centur y Michigan. About a year ago, Michigan Retailers Association helped eliminate the antiquated legal requirement of putting a price sticker on virtually every consumer item in a store. Now, retailers have much more freedom and can display prices in any way that reasonably conveys the price to the consumer. However, it is still prudent to be very careful when marking the prices of your goods, because retailers must still pay a “bounty” when an item is priced incorrectly and the consum-
er suffers a loss. With holiday and Christmas sales at a frenzy, accurate price marking is essential. Here are some tips so the bounty doesn’t cut into your holiday profits or cause inconvenience. • Several elements must be satisfied before a consumer is entitled to the bounty: – An automatic checkout system (scanner) charges the consumer more than the displayed price of the item; – The transaction has been completed; – The consumer is given a receipt that describes the item purchased and the price charged for it; and – The consumer notifies the seller
Membership Services Corner Quick notes on key services. Call 800.366.3699 for details. Credit Card Processing • The IRS requires Michigan Retailers Services, Inc. to have valid business taxpayer W-9 information for all merchant processing accounts. Call customer service if you need to verify your business information or need a W-9 form. • This is the second year for an IRS tax-reporting mandate for all merchant processing organizations. Therefore, a 1099K form will be mailed to your business in January 2013. Please call customer service if you have any questions. • Data security compliance is mandatory, therefore you must complete an annual PCI Self-Assessment Questionnaire to verify if your business is PCI compliant. Visit http://www. compliance101.com/ to begin the questionnaire. • Credit card fraud is on the rise – call customer service with any suspicious orders (email, phone or Internet) or if you are asked to ship out of the country. • To protect your business against customer disputes, be sure to imprint and obtain a signature on all credit card transactions. Call customer service if you need an imprinter or sales slips. • These terminals are no longer PCI compliant: Zon, Tranz, Omni and Hypercom T7P. • Alert – Your credit card terminal may support Partial Authorization for gift card transactions involving a card without enough value to pay for the entire transaction. In that situation, the terminal receipt would display “Amount Due,” to be collected from the customer before completing the sale.
Social Media • For the latest breaking news in retail, business and retail-related legislation, follow MRA on Twitter: www. twitter.com/michretail. • We want to keep in contact with you via social media in order to know what’s happening at our member businesses. Let us know if your business is on Facebook or Twitter, by contacting Laura Schilling at lschilling@retailers.com.
of the loss within 30 days of purchase, either in person or in writing.
yers and consumers out there hoping you’ll make a mistake. If the bounty isn’t paid, the consumer may be entitled to damages of $250 plus attorney fees. So train your employees to pay the bounty when it is owed.
“retailers must still pay a ‘bounty’ when an item is priced incorrectly and the consumer suffers a loss.” • If the bounty is due, the retailer must pay two amounts within two days of receiving notification: – First, the consumer is entitled to the difference between the amount paid and the price displayed. – Second, the consumer is entitled to a penalty, which is an amount equal to 10 times the price difference but that is not less than $1 or more than $5. • Limiting your liability: – Consumers are only entitled to the bounty if a transaction is completed. Make sure your employees know your prices and sales. If an item rings up incorrectly, your employee can catch the error and make a correction before the transaction is completed, avoiding the bounty. That makes sense, because there is no loss to the consumer if the error is corrected before the sale is finished. – If the bounty is owed, pay it. There are several opportunistic law-
The Shopping Reform and Modernization Act that replaced the old item pricing statute is a good law for retailers and consumers. Knowing what the new law requires and following it carefully will enable you to keep the holiday shopping season humming along merrily.
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Michigan Retailer
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LOTTERY
Lottery turns 40; retailers’ commissions top $3 billion by M. Scott Bowen, Commissioner
It’s hard to believe that the Michigan Lottery started with the sale of a 50-cent ticket 40 years ago. The first ticket was sold on November 13, 1972, and in that first year, the Lottery generated $36.7 million for public education in Michigan. Today, Lottery players can choose from nine draw games plus dozens of individual Instant and Pull Tab games with ticket prices ranging from 50 cents to $50. Prizes have also multiplied dramatically: now, the top prizes are as high as hundreds of millions of dollars in the multi-state games of Mega Millions and Powerball. Since it began in 1972, the Lotter y has generated over $17
billion for public education. The Lottery shattered its own record in fiscal year 2012, making a record contribution of over $770 million to the School Aid Fund. In 40 years of business, the Lottery has paid an astounding $26.8 billion in prizes, with amounts over the years ranging from $1 to the $337 million won by Donald Lawson of Lapeer in August of this year. Lottery retailers, from small convenience stores owned by individuals to superstores with multiple locations owned by corporations, sold $50.5 billion worth of tickets and have earned over $3.2 billion in commissions. The Michigan Lottery is a true success story. It has made millions of Lottery players prizewinners, thousands of retailers commission winners, and most importantly,
public education in our great state the beneficiary winner. Internet sales We have grown from offering one paper ticket for 50 cents to offering a huge array of games with various play styles, to offering second chance drawing opportunities in which players can participate by joining our VIP program. Our next logical step is to sell tickets over the Internet. We hope to be able to present this to our players by this time next year. We fully expect to maintain a very close partnership with our retailers when this option becomes available for players. In fact, retailers will benefit from Internet sales with new opportunities such as the ability to sell game cards to players. We are also looking at enhancements; for example, the creation of “virtual retailers” through which retailers can earn commissions through their websites. We would also note that studies have shown that retail sales in lottery jurisdictions that offer Internet options are not adversely affected. We expect that to be the case in Michigan as well. We thank you, our retailer partners, for your ongoing support of our business. With your help we will have many more successful years as we continue to fulfill our mission of generating revenue for public education. Thank you for 40 wonderful years! Underage sales Michigan Lottery retailers are key
Looking for the best way to reach retailers in Michigan? Advertise in the Michigan Retailer. Rates as low as $35 per issue.
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players in the initiative to prevent Lottery ticket sales to minors. Please be vigilant and remind all members of your staff that Lottery games are only to be sold to the adult audience they are designed for. It is against the law to sell Lottery tickets to anyone under the age of 18. This is especially important to remember during the holiday season. We also remind people to give responsibly during the holiday season and throughout the year. While Lottery tickets make great gifts and stocking stuffers, the recipient’s age should be kept in mind. Blazing 500s Our Blazing 500s is gearing up to make your holidays RED HOT! The 500 hours of winning begin on Thursday, December 20, at 2 p.m. and conclude on Saturday, January 12, at 9 a.m. A new winner will
be selected every hour. All $500 prizes will be delivered to winners via email as a digital voucher that can be printed and redeemed at any Lottery retailer – helping to drive traffic and big cash winners into your business. Note: A player may only be selected as a winner one time during the Blazing 500s promotion. Players can double the power of their non-winning tickets being entered into their Player’s Club account between 1 p.m. December 23 and 8:59 a.m. January 12. For every $10 in non-winning Michigan Lottery tickets submitted online, players will receive two giveaway entries: one into the Play It Again for the chance to be a $1,000,000 finalist, and an entry into Blazing 500s for a chance to win $500. In fiscal year 2012, the Lottery’s contribution to schools was approx. $770 million. Since its inception in 1972, the Lottery has contributed more than $17 billion to education in Michigan. For additional information, please visit the Lottery’s website at www.michiganlottery.com.
December 2012
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NEW MEMBERS & NEW MEMBER SPOTLIGHT Thunder Bay Emergency Physicians, Alpena Waddle’s Tire Service Inc., Brownstown Hilltop Auto Service Inc., Byron Center New Image Hair Salon Inc., Cadillac Uccello’s, Caledonia Bush & Bush PC, Constantine Crystal Home Interiors LLC, Crystal Falls Our Johnny’s LLC, Custer Dewitt Optometry PC, Dewitt Flap Jack, Dewitt JBE Inc., Dorr Eastpointe Oil Change Center Inc., Eastpointe Dee’s Merchandise, Farmington Mission Point Otsego Operating LLC, Gaylord The Cheese Lady Grand Rapids, Grand Rapids Your Shower Door, Grand Rapids Salvatore’s Italian Restaurant, Grand Rapids Schnitz South Inc., Grand Rapids West Brook North LLC, Grand Rapids Master Precision Products Inc., Greenville Zamzam Restaurant & Bazaar, Hamtramck Tiny Town Trading Company, Haslett Impact Fab Inc., Holland Cake Connections, Jackson Elenbaas Hardwood Incorporated, Jenison Pete’s Auto & Truck Parts Inc., Jenison Slick Shirts Screen Printing, Lansing Chen’s Restaurant Yu Inc., Lansing One Stop Auto, Lansing Lighthouse Pro Clinic PC, Ludington Marysville School Bus Inc., Marysville Shorty’s Shoe Repair Inc., Midland Jumbo’s Burger Bar, Owosso Matches Discount Cigarettes & Tobacco, Petoskey Mill Street Bar & Grill Inc., Pontiac Steele Ultimate Tailgating LLC, Rockford Arthur Van Victor DDS PC, Roseville Golden Glow Ballroom, Saginaw Stoddard House Interior, SC Legends Sports Cafe II LLC, Swartz Creek
New on the block: Cheese shop encourages sampling by Jean B. Eggemeyer Customers entering The Cheese Lady shop, located at 315 Fuller Ave. NE in Grand Rapids, are greeted by artful displays of specialty foods, including jams, chutneys, cured meats, crackers, pastas, oils and sauces. The displays lead to the main stars of the shop: nearly 100 varieties of cheese, housed behind the deli counter.
“We encourage customers to try different varieties of cheese before buying.” “We carry cheeses from all over the world, though many are from Europe,” explained Heather Zinn, owner, who opened the shop on October 11. “Midnight Moon, a hard goat’s milk cheese made in the Netherlands, is my favorite right now,” she said. Zinn, a former broadcast media sales manager, is the second franchisee of the business, which was founded eight years ago in Muskegon by Kathleen Fagan Riegler. Another shop is located in Texas Township outside of Kalamazoo. Zinn jumped at the chance to open a franchise once she learned about the opportunity. “I had been a regular customer of the Muskegon shop and have loved cheese all my life,” she said. “I enjoy sharing my knowledge with my customers.” The highlight of the shopping experience at each of the stores is cheese sampling. “We encourage customers to try different varieties of cheese before buying.” Zinn and her friendly staff members are on hand to answer questions about the cheeses, which are made in many different ways to develop into a diverse taste and texture spectrum. In addition to the gourmet cheese accompaniments noted above, the store will stock specialty beers and wines as soon as it receives its liquor license, according to Zinn. “We carry anything that goes well with a cheese tray,” said Zinn, whose customers come in regularly to buy snacks for tailgates, dinner parties and gift baskets. The Cheese Lady joined Michigan Retailers Association prior to opening, chiefly to take advantage of the expert credit card processing service. “I trust my bank, and they recommended MRA,” she explained. Jean B. Eggemeyer is a freelance writer based in Illinois and a former employee of Michigan Retailers Association.
The Cheese Lady owner Heather Zinn (left) with Susie Roeters, Zinn’s “cousin and right hand gal.”
‘Tis the season to stock up on Michigan Lottery holiday instants. Cheerful games that give your customers chances to win up to $500,000 instantly and your business a jolly seasonal boost. Little wonder these tickets make everyone’s season so merry and bright. Overall odds of winning Holiday Treats: 1 in 4.76. Overall odds of winning Gifts Galore: 1 in 4.65. Overall odds of winning Sweet Winnings: 1 in 3.98. Overall odds of winning Holiday Millions: 1 in 3.40. If you bet more than you can afford to lose, you’ve got a problem. Call 1-800-270-7117 for confidential help.