December 2012 Michigan Retailer

3 8 9Bounty HuntersThe old item pricing law is gone, but the wrong-price bounty remains. Learn how to protect against bounty hunters. Page 9

Marketing to SmartphonesIsn’t it time to increase your business by marketing to the mobile phone device in just about everybody’s hand? Page 8

Early ShoppersMichigan retailers began the holiday shopping season with a head of steam caused by shoppers starting early.Page 3

Retail crime bills get past lame duckMore than $30,000available for 2013-14scholarship awards

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The Michigan Legislature, meet-ing 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.

Although there was strong bipartisan support for the anti-crime 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 sup-ported by Gov. Snyder.

The legislation, prohibiting compa-nies from requiring workers to pay union dues or join a union in order to get or keep a job, won approval on

®

December 2012 Vol. 37 No. 6 The official publication of the Michigan Retailers Association www.retailers.com

Michigan Retailers Association’s annual competition is expected to award $34,000 in education scholar-ships 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 num-ber 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 stu-dents 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 ac-tivities, which can include part-time employment. Financial need is not a consideration.

Those eligible to apply are high school seniors and college fresh-men, sophomores and juniors who are dependent sons and daughters of owners or full-time employees of MRA’s nearly 5,000 member busi-

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Wireless world at centerof energetic retail career

When Brian D u c h a r m e started in the wireless indus-try, it was almost another world.

“Text” wasn’t a verb – it was s o m e t h i n g found in a book. No one consid-

ered a phone to be smart. “Tablets” were used to relieve aches and pains.

That was 1987 and Ducharme,

Retailers Mutual Insurance Compa-ny 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 in-surance 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 insur-ance regulators’ approval of MRA’s request to dissolve its MEWA (Multi-ple 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 provid-ing workers’ compensation insurance to a wide variety of businesses.

Mutual to expandby adding dental

now vice president/general man-ager of retail sales and services for AT&T’s Michigan and Indiana ter-ritories, 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 company-owned 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 memberThat’s because the wireless

industry wasn’t targeting consum-ers then, explained Ducharme, who was elected to the Michigan Retail-

One of the largest Capitol crowds in Michigan history made its voices heard as law-makers acted on Right-to-Work legislation. Photo by Patrick Kerwin

Brian Ducharme

by Doug Henze

2

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

Michigan Retailer www.retailers.com

by James P. Hallan, MRA President and Chief Executive Officer

Shop Local/Shop Michigan

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 In-ternet retailers and the unfortunate result of dollars not being spent or invested in local communities.

The importance of supporting

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 con-sumers to do their shopping where it will do the most good.

The MRA Board of Directors is com-mitted strongly to this Shop Local/Shop Michigan project and is leading the effort. A special board commit-tee chaired by Barb Stein, owner of Great Northern Trading Company, Rockford, has just selected a strate-gic 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, manufac-turers, 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 ben-efit by doing business with each other.

However, it appears that all these current efforts, while highly com-mendable, 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 uni-fying role and help create a statewide promotion that enables everyone to jump on board and achieve the criti-cal mass necessary to make it work and make a measurable difference.

We’re not kidding ourselves that this effort will be easy, or inexpen-sive. 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 busi-nesses and our state is far greater if we don’t make the effort.

So stay tuned. We’ll keep you up-dated 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.

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Board of Directors:

Thomas UngrodtChairIdeation, Ann Arbor

James P. HallanPresident and CEOMichigan Retailers Association

Dan MarshallVice Chair Marshall Music Company, Lansing

Peter R. SobeltonTreasurerBirmingham

Jean SarasinSecretaryMichigan Retailers Association

Barb SteinPast ChairGreat Northern Trading Co., Rockford

Brian DucharmeAT&T

Becky Beauchine KulkaBecky Beauchine Kulka Diamonds and Fine Jewelry, Okemos

Orin Mazzoni, Jr.Orin Jewelers, Garden City

Joseph McCurryCredit Card Group

Larry MullinsBrandon Tire & Battery, Ortonville

R.D. (Dan) Musser IIIGrand Hotel, Mackinac Island

Joe SwansonTarget Corp.

James WalshMeijer, Inc., Grand Rapids

D. Larry ShermanBoard Member Emeritus

Michigan Retailers Services, Inc.Board of Directors:

Bo BrinesLittle Forks Outfitters, Midland

Bill GoldenGolden Shoes, Traverse City

Lisa McCalpine-WittenmyerWalgreens

James P. Hallan Thomas B. ScottPublisher Editor

Pat KerwinDesign Manager

Publication Office:603 South Washington AvenueLansing, MI 48933517.372.5656 or 800.366.3699Fax: 517.372.1303www.retailers.comwww.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.

mostly party-line votes while some 2,000 chanting protestors and sup-porters 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 await-ing action at the end of the session. But the organized crime bills won ap-proval despite the partisan conflict.

Organized theftOrganized 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 re-sell. 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 in-tend 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 medi-cines, 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 mer-chandise for cash or drugs, which can be used to finance other major criminal activities,” Hallan said.

Impact on retailA 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 employ-ees. 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 medi-cations can expire or spoil from long storage or lack of temperature controls.

Inadequate lawsCurrent Michigan laws are gener-

ally limited and deal primarily with personal shoplifting. Prosecutors are left with a patchwork of criminal statutes that are not specifically ap-plicable 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 de-stroyed merchandise.

Crime bills get past lame duck

December 2012 3

Michigan retailers began the tradition-al 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 ex-pected 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 start-ed 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 in-creased sales over the same month

last year, while 34 percent recorded declines and 19 percent saw no change. The results create a season-ally 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 conduct-ed by MRA and the Federal Reserve. Index values above 50 generally indi-

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.

3-Month Outlook Index

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Retailers start season with good head of steamMICHIGAN RETAIL INDEX

700

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2011 2012

633 634604

564 570

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Aug Sep Oct

Be sure to complete youronline survey each month!

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 pe-riod last year, while 17 percent project a decrease and 26 percent no change. That puts the seasonally adjusted outlook in-dex at 72.1, down from 76.8 in September. A year ago October it was 64.4.

State sales tax receipts totaled $621.1

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/michigan-retail-index.html. The website includes figures dating back to July 1994.

64 Michigan Retailer www.retailers.com

Fight for Main Street Fairness moves into 2013The issue of Main Street Fairness

and the steady drumbeat for a fair and level playing field for Michigan retail businesses will not let up, ac-cording 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 dif-ficult legislative process once again.

The two-bill package, which was introduced in bipartisan fashion in September 2011 and had two hear-ings 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 agen-da. But the committee removed it from discussion that morning and Lt. Governor Brian Calley’s pre-sentation 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 Michi-gan a right-to-work state, helped run out the clock on Main Street Fairness.

“We know we continue to have sol-id 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 is-sues,” 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 legisla-tion that is vital to Michigan’s retail industry.”

Following are some common ques-tions and answers about the issue.

Main Street Fairness Q&A

1. What is Main Street Fairness?

Main Street Fairness is legislation de-signed 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 col-lect 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 whol-ly 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 im-portant to me?

Main Street Fairness levels the play-ing field for Michigan retailers who are at a disadvantage because they are required to collect the 6 percent sales tax. Without Main Street Fair-ness, 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 defini-tion of “physical presence” to include companies that operate in Michigan through subsidiaries or through an affiliate network.

6. Does Main Street Fairness only ap-ply 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 lo-cated 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 Michi-gan 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 re-quired 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 Trea-sury estimates that $414 million was lost in 2010 due to uncollected sales tax revenue – largely from remote purchases – and the De-partment projects that number to increase each year (Michigan De-partment 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 leg is lat ion to end the unfa ir 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 non-Michigan businesses. Call or write your state representative and state senator to urge them to pass Main Street Fairness. To find your legisla-tors, visit the “Get Involved” page at www.retailers.com under the Leg-islative tab. Please send your name and email address to Michigan Re-tailers Association ([email protected]), too, so that we can keep you updated on efforts to correct this harmful and unfair situation.

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 Schol-arship and Tuition Services, Inc., of Nashville, Tennessee, which coordi-nates the application and selection process for MRA and many other as-sociations and companies.

Students are encouraged to com-

More than $30,000 for scholarship awardsplete the application process online at MRA’s website, www.retailers.com. Students may also contact MRA’s Laura Schilling at 800.366.3699 or [email protected] 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.

5

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December 2012

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 Univer-sity undergrad has worked in nine different AT&T markets, from New

York to California to south Florida. “Our job was to…create interest in a

product that could improve business people’s efficiency and time manage-ment through use of a car phone,” he said, adding that wireless provid-ers offered a single plan at a flat rate. “Business people found the phones a good tool. Prior to that, people would pull over and use a pay phone.”

The wireless industry made a major leap with the invention of the battery-powered bag phone. Though bulky, the devices allowed for portability. “It would be like lugging around the old camcorders,” Ducharme said.

Beginning in the early 1990s, ever-smaller handheld phones moved the wireless industry into the consumer realm. By the 2000s, wireless phones were a mass consumer product.

“That’s when you started seeing the Razr,” Ducharme said. “Back then, less than 10 years ago, most people didn’t even text. Now, that’s all some people do.”

Tidal waveIt was the transformation of voice

networks to both voice and data net-works that set the stage for the tidal wave of products – including hard-ware devices, such as smartphones and tablets, and software applica-tions – flooding world markets.

“Now, you can perform thousands of activities through accessing appli-cations,” he said. “One of the hottest gift-giving items this season is expect-ed to be a tablet.”

In addition to the number of prod-ucts available, the spread of devices from heads of households to all fam-ily members is giving the wireless market a charge, said the father of two girls who lives in Fishers, Indi-ana, with his wife of 26 years, Teresa.

“A mobile device used to be some-

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 con-sumer-oriented wireless world has made Ducharme’s position highly demanding. He expects the break-

neck 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 net-work,” he said.

One of the hot, emerging product categories is being called “appcessories” – programs down-loadable to a tablet

or smartphone that will allow con-sumers to manage their lives. Among those are “Swingbyte,” which records golf swing analytics, and a wrist bracelet that can record medical in-formation, such as blood pressure.

“I can even monitor whether my 80-year-old mother is taking her medi-cine,” Ducharme said, explaining that the opening of a medicine cap can send a message to a wireless device.

Next year, AT&T is set to launch Digital Life, a home monitoring system that provides electronic notifications to consumers via wireless devices. While at work, they’ll be alerted when their basement is flooding or their child arrives home from school.

WalletsPhones also will become wallets,

allowing users to download credit cards and family photos into them. Retail purchases will be charged using phones or other electronic devices.

“That’s going to be a big thing in the next year or two,” he said.

The spread of electronic devices into every area of life raises ques-tions both about network capacity and safety.

To make sure its network can handle all the expanding consumer demand, AT&T has spent $20 billion on capital improvements in each of the past two years, Ducharme said.

The company also has put safe-guards in place to secure data stored in devices, he added, recalling how a pickpocket took his phone a couple of years ago in Barcelona, Spain.

“I just stood there frozen for a cou-ple of minutes,” he recalled. “What would have been nice is if, a couple years ago, I could have notified some-one who could have erased all that information.”

Wireless world at center of career

Brian Ducharme oversees more than 100 AT&T-owned stores and 1,100 retail employees in Michigan and Indiana.

800.366.3699www.retailers.com

Michigan Retailers Association’s Natural Gas Discount Programhas provided typical savings of8 percent less than ConsumersEnergy and 4 percent less than DTE/MichCon.

MRA offers members a solution to the highcost of natural gas. Whether you use natural gas to heat your building or produce the goodsand 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 ofthese discounts on home heating bills. If youreceive 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.

Natural GasDiscount Program

6 Michigan Retailer www.retailers.com

Enrolling in Medicare is a rite of passage, much like getting your first AARP membership solicitation. Ap-proaching the Medicare-eligible age of 65 brings an onslaught of direct-mail 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 Associa-tion, 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 trans-late the Medicare alphabet for you.

Key partsMedicare Part A is hospital insur-

ance; it is premium-free in most cases. Part B is voluntary insurance for

medically necessary services, includ-ing 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 Pe-riod, which is from one to three months

Medicare and the magic moment of turning 65by Craig Start, president of Member Insurance Solutions, a Michigan Retailers Association partner

before you turn 65. Doing so makes cov-erage 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 pre-ceding your birth month. You can sign up during your birth month or up to three months after it, but your cover-age will be delayed from one to three months after your enrollment date.

If you don’t sign up during the Ini-tial 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 planPart C is a Medicare Advantage/

Supplemental Plan. These plans cov-er the gap between what a hospital

or provider charges and the amount Medicare will pay, and may enhance those coverages with vision, hearing, dental and wellness programs.

These programs are offered by private companies approved by Medi-care. Most also provide Medicare prescription drug coverage. Electing Part C coverage is optional and pre-miums do apply.

Part D is Prescription Drug Coverage. These plans are run by insur-ance companies approved by Medicare. Plans vary in coverage and costs. If you do not enroll in a Medi-care drug plan when you are first eligible, and you don’t have prescription drug coverage that is at least equal to what Medicare Part D would cover, you’ll probably pay a late enrollment penalty when you do apply.

ConsultationsYou’ll be glad to know that Mem-

ber Insurance Solutions offers MRA members personal Medicare-related consultations to help you make the choices that are right for your cir-cumstances. We’ll also help your

non-Medicare-eligible spouse get into the right health insurance plan to meet his or her needs.

If you have questions, or want to schedule a Medicare review appoint-ment, please contact the Member Insurance Solutions Blue Cross de-partment at 877.906.9924.

Medicare is PrimaryOnce you are enrolled in Medicare,

it becomes the primary payer for co-ordination of benefits purposes. This is also true if you receive Medicare because you receive Social Security disability benefits or have Medicare because of End-Stage Renal Disease.

It is important to let your insurance company know that you have Medicare so that claims are processed correctly.

MEDICARE PYRAMID: BUILDING A COMPLETE INSURANCE PROGRAM

Part A Hospital

Part B Physicians

Gap/Supplemental

Prescription

Part C

Part D

Automatic-No Premium

Pay Premium

Pay Premium

Pay Premium

7

“What if your credit card terminal was to fail in the middle of a weekend sale?”

RETAIL TECHNOLOGY NEWS

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 designationfrom the national Electronic Transactions Association.

Are you ready for disaster?

I don’t know if the Mayan cal-e n d a r ( w h i c h appears to end abruptly later this year) indicates some impending disaster or not, but every busi-ness 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 bil-lions 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 hap-pens 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 em-ployees would take to continue to accept credit cards until your elec-tronic terminal is operating again?

You should.

ImprintersMost 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-

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 sys-tem 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.

A couple of months ago, I was in a fast food restaurant and was told, be-fore 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 build-ing without food. I am guessing they went across the street to a competi-tor 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 im-printer but don’t have sales slips, your processor should be able to provide them.

I would suggest that you take a min-ute 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 [email protected].

December 2012

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 contin-ue to change the way people rely on phones – for much more than making calls – and tablets.

Continued from page 5

Wireless world at center of career “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 Oak-land Press in Pontiac.

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Smartphones h a v e b e c o m e consumers’ pri-mary shopping companion – a trend that will continue to es-calate as usage becomes more i n g r a i n e d i n

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 pur-chasing, and read the reviews before buying the product they’re considering.

This device now educates con-sumers 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 websiteMost websites have been designed

to be viewed on a computer screen. They do not convert well to a smart-phone’s small screen, and copy is not

Ways to drive business through smartphonesby Ed Borowsky

condensed to communicate messag-ing in a quick, concise manner. If your website is not mobile phone friendly, then it is safe to say that you are los-ing business.

The following features are key to ef-fective 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 infor-mation. 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 with-out zooming or pinching.

• Your mo-bile site should be accessible. An ideal mobile website works across all mo-bile platforms and handset ori-entations.

• Make it lo-cal. Most of the t ime , mobi le users look for local informa-t ion on their phones. I t is impor tant to

include a functionality that lets people find you.

• Make your website easy to con-vert. Make it easy for prospects to buy from you or contact you. Focus on product details and other informa-tion 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. Fi-nally, utilize click-to-call functionality for phone numbers.

Text messagingSMS stands for Short Message

Service, and it’s also commonly

referred to as Text Messaging. It’s text only and lets you send mes-sages that are no more than 160 characters.

MMS stands for Multimedia Mes-sage 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 adver-tising 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 ap-petizers (one per customer) to be redeemed during Happy Hour.

Needless to say, the bar and restau-rant were packed that evening!

CouponsAre 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 maga-zines, are sometimes difficult to track.

Mobile coupons are highly measur-able, 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 cou-pon.

With the ease brought by digital technology, you can keep on testing and refining coupons to better increase your conversions.

Quick Response (QR) CodesQR 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 ad-dresses, which is a hassle with mobile Internet browsing.

You can use QR codes to direct a user to almost any online destina-tion: a website, social networking site like Facebook or Twitter, Google Map location, App Store download,

v ideo, ar t ic le , email address, t ex t message , your contact de-tails, a buy-now link or coupon.

QR codes can b e p l a c e d a t

locations throughout your show-rooms and on merchandise tags. When scanned, the customers can view a myriad of informa-tion 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. Cus-tomers scanned the code with their smartphone, and all the in-formation 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 communicationLike 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.

IT’S THE LAW

A ‘bountiful’ Christmas? Let’s certainly hope notby William J. Hallan, MRA Vice President Government Affairs and General Counsel

We l c o m e t o t h e 2 1 s t c e n -tury Michigan. About a year ago, Michigan Retail-ers 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 satis-fied 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

9December 2012

of the loss within 30 days of purchase, either in person or in writing.

• 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 enti-tled 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 com-pleted. Make sure your employees know your prices and sales. If an item rings up incorrectly, your em-ployee 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-

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.

The Shopping Reform and Modern-ization Act that replaced the old item pricing statute is a good law for re-tailers and consumers. Knowing what the new law requires and following it carefully will enable you to keep the holiday shopping season humming along merrily.

Membership Services CornerQuick notes on key services. Call 800.366.3699 for details.Credit Card Processing

• The IRS requires Michigan Re-tailers 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 man-datory, therefore you must complete an annual PCI Self-Assessment Ques-tionnaire 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 im-print and obtain a signature on all credit card transactions. Call customer service if you need an im-printer or sales slips.

• These terminals are no longer PCI compliant: Zon, Tranz, Omni and Hy-percom 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 leg-islation, 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 Face-book or Twitter, by contacting Laura Schilling at [email protected].

“retailers must still pay a ‘bounty’ when an item is priced incorrectly and the consumer suffers a loss.”

LOTTERY

by M. Scott Bowen, Commissioner

Lottery turns 40; retailers’ commissions top $3 billionIt’s hard to

be l i eve that the Michigan Lottery started with the sale of a 50-cent ticket 40 years ago.

The first ticket was sold on No-

vember 13, 1972, and in that first year, the Lottery generated $36.7 mil-lion for public education in Michigan.

Today, Lottery play-ers 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 Lot-tery has generated over $17

billion for public education. The Lottery shattered its own record in fiscal year 2012, making a re-cord contribution of over $770 million to the School Aid Fund.

In 40 years of business, the Lot-tery 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 individu-als to superstores wi th mul t ip le lo -cations owned by corporations, sold $50.5 billion worth of tickets and have earned over $3.2 bil-lion 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,

10 Michigan Retailer www.retailers.com

public education in our great state the beneficiary winner.

Internet salesWe 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 play-ers 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 re-tailers when this option becomes available for players. In fact, re-tailers 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 part-ners, 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 salesMichigan Lottery retailers are key

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 any-one under the age of 18.

This is especially important to remember during the holiday season. We also remind people to give responsibly during the holi-day 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, Janu-ary 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 se-lected 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 ac-count between 1 p.m. December 23 and 8:59 a.m. January 12. For ev-ery $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 infor-mation, please visit the Lottery’s website at www.michiganlottery.com.

Looking forthe best way to reach retailersin Michigan?

Advertise in theMichigan Retailer.

Rates as low as$35 per issue.

Call 800.366.3699for more information.

Thunder Bay Emergency Physicians, AlpenaWaddle’s Tire Service Inc., BrownstownHilltop Auto Service Inc., Byron CenterNew Image Hair Salon Inc., CadillacUccello’s, CaledoniaBush & Bush PC, ConstantineCrystal Home Interiors LLC, Crystal FallsOur Johnny’s LLC, CusterDewitt Optometry PC, DewittFlap Jack, DewittJBE Inc., DorrEastpointe Oil Change Center Inc., EastpointeDee’s Merchandise, FarmingtonMission Point Otsego Operating LLC, GaylordThe Cheese Lady Grand Rapids, Grand RapidsYour Shower Door, Grand RapidsSalvatore’s Italian Restaurant, Grand RapidsSchnitz South Inc., Grand RapidsWest Brook North LLC, Grand RapidsMaster Precision Products Inc., GreenvilleZamzam Restaurant & Bazaar, HamtramckTiny Town Trading Company, HaslettImpact Fab Inc., HollandCake Connections, JacksonElenbaas Hardwood Incorporated, JenisonPete’s Auto & Truck Parts Inc., JenisonSlick Shirts Screen Printing, LansingChen’s Restaurant Yu Inc., LansingOne Stop Auto, LansingLighthouse Pro Clinic PC, LudingtonMarysville School Bus Inc., MarysvilleShorty’s Shoe Repair Inc., MidlandJumbo’s Burger Bar, OwossoMatches Discount Cigarettes & Tobacco, PetoskeyMill Street Bar & Grill Inc., PontiacSteele Ultimate Tailgating LLC, RockfordArthur Van Victor DDS PC, RosevilleGolden Glow Ballroom, SaginawStoddard House Interior, SCLegends Sports Cafe II LLC, Swartz Creek

NEW MEMBERS & NEW MEMBER SPOTLIGHT11

Customers entering The Cheese Lady shop, located at 315 Fuller Ave. NE in Grand Rapids, are greet-ed 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 carry cheeses from all over the world, though many are from Eu-rope,” 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 fran-chisee of the business, which was founded eight years ago in Mus-kegon 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 en-joy sharing my knowledge with my customers.”

The highlight of the shopping expe-rience at each of the stores is cheese sampling.

“We encourage customers to try different varieties of cheese before buying.”

Zinn and her friendly staff mem-bers 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 open-ing, chiefly to take advantage of the expert credit card processing service.

“I trust my bank, and they recom-mended MRA,” she explained.

Jean B. Eggemeyer is a freelance writer based in Illinois and a former employee of Michigan Retailers Association.

New on the block: Cheese shop encourages samplingby Jean B. Eggemeyer

December 2012

The Cheese Lady owner Heather Zinn (left) with Susie Roeters, Zinn’s “cousin and right hand gal.”

“We encourage customers to try different varieties of cheese before buying.”

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.

‘Tis the season to stock up on Michigan Lottery holiday instants.

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.