SM

3 5 7Data SecurityHere’s the hot retail question: Do you really know if your customers’ information is safe from theft?Page 7

Snap RegistrationGrand Rapids entrepreneur Wayne Brown has made sophisticated online event registration a snap. Page 5

Slip into SpringRetail sales slipped in February and retailers reduced their outlook slightly for the first half of Spring. Page 3

MRA launches Buy Nearby campaignLegislative backerssay now is the timeto pass Main Street

Continued on page 6 Continued on page 4

An ambitious statewide campaign to encourage consumers to shop at near-by retailers will be launched this spring by Michigan Retailers Association.

Buy Nearby will be a permanent, year-round, feel-good program designed to promote Michigan retail businesses and communi-

®

April 2013 Vol. 38 No. 2 The official publication of the Michigan Retailers Association www.retailers.com

ties, said Thomas Ungrodt, chair of the MRA Board of Directors and president and CEO of Ann Arbor-based Ideation.

“We want this to be the start of something big!” said Ungrodt, who also operates gift stores in Ann Arbor and Chelsea.

“We want businesses, communi-ties and shoppers to get excited about the great places and great shops we have in Michigan. We intend Buy Nearby to serve as a personal call to action, a symbol of pride and celebration, a rallying cry across Michigan and an economic

driver for our state.”The campaign will run

throughout the year and be “celebrated” annually on the first Saturday in October, similar to the American Express Small Business Saturday on the weekend after Thanks-giving – only larger and more inclusive.

‘Blue-Handed’On that first October

Saturday, advertising and media attention will focus on shoppers visiting nearby commu-nities and retail stores. Communities, down-towns and retailers will be encouraged to offer special promotions, events and incentives to make it a big local shopping day.

This year’s celebration, on October 5, will carry the theme “Get Caught Blue-Handed,” a twist on “get caught red-handed.” “Blue-handed” reflects the blue of the distinctive Buy Nearby logo, which echoes the blue of the Great Lakes that define our state.

“Shoppers will want to be seen and photo-graphed buying at nearby

State Rep. Eileen Kowall hopes the second time’s the charm in the effort to close tax loopholes that give out-of-state online sellers an unfair advantage over Michigan retail businesses.

The Republi-can lawmaker’s legislation to re q u i re n o n -M i c h i g a n e - c o m m e r c e b u s i n e s s e s , such as Ama-zon, to collect the state’s 6 per-cent sales tax on goods they sell to Michigan residents didn’t make it through the legislature last session.

Rep. Kowall, who represents t h e H o u s e ’s 44th Dis tr ic t a n d l i v e s i n western Oak-

land County’s White Lake Township, has teamed with Rep. Rob Ver-Heulen, a former mayor in West Michigan, to sponsor the same Main Street Fairness Act this session. The proposed act consists of House Bills 4202 and 4203.

“Our House leadership is more re-ceptive to it this time,” Kowall said. “I think more people are becoming aware of what an unfair advantage [online retailers] have over our Michigan businesses. It’s part of our House Republican Action Plan to take a hard look at this and, hopefully, get

by Doug Henze

Rep. Eileen Kowall

Rep. Rob VerHeulen

Learn more about Buy Nearby and how you can benefit from the campaign by attending our MRA Member Webinar at 9 a.m. on April 25. You will see

Buy Nearby webinar

APRIL

25how to gain access to tools that will help you share in the excitement and generate new sales. Please visit www.retail-ers.com closer to April 25 for registration information.

2

As this issue’s Page One story on our new Buy Nearby campaign makes clear, your Association is deeply com-mitted to helping individual Michigan retail and other businesses succeed.

The success of retailers small, medium and large has always been MRA’s mission. But the path to car-rying out that mission has gone in exciting new directions over the 73 years of the Association’s existence.

Buy Nearby represents another new direction. MRA plans to use its size, strength and expertise to increase Michigan retail sales by helping drive shoppers into their “nearby” communities and the stores that are located there.

Bold StepLet me explain briefly why this is

another bold step. MRA was formed in 1940 to better

represent the interests of the retail in-

Michigan Retailer www.retailers.com

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

New ways to helpretailers succeed

dustry on issues before the Michigan Legislature. In those early years, that was enough.

As the Association grew and ma-tured, it expanded its scope. In addition to providing legislative rep-resentation, MRA began providing value-added, cost-saving business services to members, to help them become stronger financially and op-erationally.

Business insurances, publications, seminars, credit card processing, discounts on shipping and natural gas – the list of membership services has grown dramatically, especially in recent years. All of the services are aimed at strengthening the opera-tions and bottom line of individual businesses.

New EffortsThe Michigan economy of the past

few years, however, has called for all

of that and more. The technological revolution of online shopping also has spurred new efforts to help.

MRA’s board of directors asked, “How can we do even more for Michi-gan retailers? What can we do to help drive more customers and higher sales to Michigan-based businesses?”

The first big answer: Buy Nearby, a statewide campaign to put more shoppers in your stores and your community.

Please learn all you can about Buy Nearby and participate fully in the campaign. Michigan Retailers As-sociation is starting something new that we expect will grow in excite-ment and value to retailers and their communities every year. With your support, it will.

Community Focus

Buy Nearby is only one of MRA’s new community-focused activities.

Starting last year, MRA initiated a growing list of community meetings – we call them “business tune-ups” – to bring together local retailers to discuss what’s happening in their businesses and their community and to explore how MRA can help.

Look for a postcard invitation or check the calendar on www.retailers.com (under the Education & Events tab at the top of the page) for the first or next get-together in your town.

Partner MembersIn addition, MRA is reaching out to

key local business organizations such as chambers of commerce, principal shopping districts and downtown development authorities to add to their business services. The local or-ganization is encouraged to sign up its members as Partner Members of MRA.

As a Partner Member, a business gets a number of helpful and in-formative electronic publications and bulletins from MRA at no cost. That also makes them aware of the higher-value MRA services that our dues-paying members receive and provides them the opportunity to up-grade their partner status to a regular membership.

We believe that’s a win-win-win situ-ation, because it helps strengthen the local business, the local community and MRA.

And strengthening retailers and oth-er local businesses has always been what your Association is all about.

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.

Three free webinars remain in the “Retail University” 2013 series brought to you by MRA and the national Council of State Retail As-sociations.

Next up on April 24 is an introduc-tion to mobile and social marketing. The session is titled “Consumers are mobile and social – are you standing still?” and is presented by Jeff Greer, from Easyfish Marketing.

Easyfish is a digital marketing agen-cy and works with Michigan Retailers Association on the www.retailers.com and www.retailersmutual.com websites.

This is an introductory level webi-nar to help businesses understand the importance of social media and having a smartphone-friendly web-site. Greer will host a more advanced webinar on the topic on June 27.

RegistrationIn the April 24 session, members

can learn:• How to use mobile devices to

market your business• Why social and mobile marketing

is the most direct and cost-effective way to promote and market your business

• How to advertise on Facebook• How to promote a positive online

reputation and encourage customers to leave you rave reviews online.

‘Retail University’ offers webinarsMembers have a choice of two times

for every webinar in the series: 8:30 a.m. ET or 11:30 a.m. ET. In addition, recordings of most past webinars are available to MRA members.

Members can register for a webi-nar or request a recording of a past webinar by contacting MRA’s Laura Schilling at 800.366.3699 ext. 313 or lschilling@retailers.com.

ShopliftingFollowing that webinar is a session

on helping small retailers prevent losses from shoplifting. The May 21 session, “Shoplifting awareness – a practical and easy guide for prevent-ing loss for small retailers,” is led by Kevin M. Plante, a national leader in the loss prevention industry.

His practical tips range from how to use customer service to discourage theft to how to set up your store so it’s anti-shoplifting.

He’ll also address shopper behav-ior as an indicator of theft, and what you should do and who can help if you’re having shoplifting problems.

Intermediate LevelThe final webinar in the series will

be held on June 27 and is an interme-diate level talk on “How to win over the mobile, connected shopper.” It’s also led by Jeff Greer from Easyfish Marketing.

April 2013 3

Michigan retailers’ forecasts for spring sales slipped, following a drop in their February sales, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

February’s sales index number dropped below 50 for the second time in three months, showing that con-sumers were still adjusting to higher payroll taxes, continued high unem-ployment and rising gasoline prices.

“February’s fall-off in sales puts Michi-gan’s retail industry back on a bumpy road,” said Tom Scott, MRA senior vice president. “January gave us a solid jump from a disappointing December, but February sunk to December’s level.”

Most retailers maintained a posi-tive projection for spring sales, but the industry’s overall short-term outlook took a hit in February, falling more than seven points on the index.

The February Michigan Retail Index found that 37 percent of retailers in-creased sales over the same month last year, while 43 percent recorded declines and 20 percent saw no change. The results create a season-ally adjusted performance index of 46.8, down from 57.9 in January and the lowest February since 2009. A

year ago February it was 59.3.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-cate positive activity; the higher the number, the stronger the activity.

Looking forward, 59 percent of retailers expect sales during March – May to increase over the same pe-

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

70

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60

50

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30

12-13

11-12

MAR

APR

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Current Performance Index

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Back to ‘bumpy road’ for retail sales, forecastsMICHIGAN RETAIL INDEX

700

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200 (millions)

20122011 2013

512 522

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597563

Dec Jan Feb

Be sure to complete youronline survey each month!

riod last year, while 8 percent project a decrease and 33 percent no change. That puts the seasonally adjusted outlook index at 67.3, down from 74.7 in January. A year ago February it stood at 67.9.

The U.S. Commerce Department re-ported that national sales in February increased 1.1 percent – 0.7 percent excluding autos, gas stations and restaurants.

Through February, Michigan sales tax revenues for the year are up 1.1 percent from a year ago.

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

64 Michigan Retailer www.retailers.com

Continued from page 1

stores,” said Barb Stein, chair of the special MRA board committee over-seeing development of the campaign. Stein is owner of Great Northern Trading Co., in Rockford and imme-

diate past chair of the board.“We’re planning special gift bags,

banners, window decorations and other promotional items to make this day a very festive one,” she said.

“It’s going to be a very public way to emphasize the fun, value and im-portance of buying nearby every day.”

Local Groups“We believe the timing is excellent

to launch this type of pro-Michigan, pro-local campaign that complements the efforts of many others across the state,” said James P. Hallan, MRA president and CEO.

“We would like to bring a Pure-Michigan type of emotion to shopping in Michigan and supporting our near-by retailers and communities,” he said, referring to the state’s award-

“We intend Buy Nearby to serve as a personal call to ac tion, a symbol of pride and celebration, a rallying cry across Michigan and an economic driver for our state.”

winning travel promotion campaign that makes an emotional connection between residents/tourists and the state’s natural and cultural assets.

“We also want to provide more momentum to the move-ment that’s focusing attention on the im-portance of supporting Michigan businesses.”

One of the advantages of Buy Nearby, Hallan said, is that it’s meant to support local efforts, not replace them.

“With Buy Nearby, Michigan Re-tailers Association is bringing its statewide platform and resources to the table in support of what communities and organizations are already doing. We want to be a part-ner with existing shop-local and buy-Michigan efforts and generate even more attention on the benefits of buying nearby."

The campaign intends to make consumers aware that the benefits of buying nearby include, according to economic studies:

• More than 850,000 Michigan jobs are directly dependent on retail sales. Those jobs are at risk when residents make purchases outside the state.

• For every $100 spent at a local store, $43-$68 goes back into the lo-cal economy.

MRA launches Buy Nearby campaign to promote local stores, communities

• For every square foot of retail space, the local economic impact is $105-$179.

Grass RootsThe campaign will make heavy use

of social media and local, face-to-face marketing. There will be a Buy Nearby website and Facebook page that will enable retailers and shoppers to post comments and find out what’s happening on local shop-ping scenes.

MRA began getting the word out to communities in late March by approaching leaders of local chambers of commerce, downtown asso-ciations, principal shopping districts, downtown develop-ment authorities and other groups. Those leaders are asked to become Buy Nearby “ambassadors” and commu-nicate the program to their local businesses.

A webinar is being held for all the ambassadors and prospec-tive ambassadors on April 24. Retailers will have their own webinar the next day to find out more about how they can partici-pate and the promotional materials that will be available to them.

In addition, MRA is seeking sponsorships to pay for a major advertising campaign to get the word out through radio, television, newspapers and the Internet.

Board CommitmentBuy Nearby is the

result of MRA board members looking for a dramatic and ef-fective way to help drive more traffic and sales to Michi-gan retailers, Hallan explained.

“Our mission is t o h e l p M i c h i g a n re ta i lers and other

businesses succeed,” he said. “We do that chief ly by providing value-added business services, legislative advocacy and informa-tion that improves our members’ bottom lines.

“But in this economy, and in this era of technological change that af-fects how people shop, our board

wanted to come up with a more di-rect way to help increase retail sales in Michigan.”

MRA hired a Michigan-based market-ing communications firm, Bolger and Battle, Inc. in downtown Midland, to help develop and coordinate the campaign.

“This is a campaign that we be-lieve will catch on and grow

in scope and value every year,” added Ungrodt.

“Folks throughout Michigan can add their creativity and hard work to Buy Nearby and help make our state an even better place

to live, work, play – and shop. That’s our

ultimate goal.”

5

Continued on page 9

Young company puts events together in a snapIt takes know-how and practice to

make complicated processes look easy. Wayne Brown – who has years of experience in banking, marketing and website development – has made sophisticated online event registra-tion, well, a snap.

As president of Grand Rapids-based Snap Registration, Brown has leveraged his skills and harnessed his interest in athletics to build a growing, “go to” company for event management.

“In 1991 I started marketing my own athletic events – 5K runs and triathlons,” said the Grand Rapids native. The young entrepreneur had graduated early from high school with an associate degree from Grand Rapids Community College and founded a business.

His marketing firm, Synergy Market-ing Solutions, included designing and programming websites for clients. As his events – and his custom online tools – gained notoriety, several oth-er event planners approached Brown about his methods.

“I saw that there was an opportu-nity to start a new business,” he said, explaining how Snap Registration came to be.

Major Events

Snap Registration has been in op-eration for seven years and provides services to between 250 and 300 events each year, including the Grand Rapids Triathlon, the Tri del Sol Tri-athlon and the MI Titanium event.

“Now there are mud runs, warrior dashes and other events that have opened up the field to anyone, wheth-er they’re athletes or not.”

That means the company, even in this down economy, has been enjoy-ing 15 to 25 percent annual growth.

In addition to hosting athletic event registrations, the firm of five also provides online services to arts or-ganizations, associations, fundraising efforts and conferences.

“Compared to two other compa-nies, we liked the generous amount of support Snap offered,” said Snap client Kathi Vande Guchte, Region 6 Emergency Preparedness Conference Planner. “I spent a lot of time on the website…even though I’m technologi-cally challenged, the Snap team was always available to help me.”

Custom SitesEach site that Snap Registration de-

velops is fully customized and branded to the specific event or organization.

“There is no other advertising on the site,” Brown said. “We take pri-vacy very seriously.”

While other event registration host companies collect and sell regis-trants’ e-mail addresses, Brown says,

April 2013

Snap Registration will not.“Some providers sell information

and all the event participants start hating the spam the site generates,” explained Brown. “We get requests to sell registrants’ information all the time, but we just don’t do it.”

Snap Registration is also unique in that it is a full-ser-vice company. In addition to its online registration tech-nology, Snap offers print, e-mail and online marketing assistance, event timing and photography services, and custom-printed promotional items and gear.

“Some clients come to us and don’t know where to start,” said Brown. “So we be-come their primary marketing agent for the event; design-ing and producing brochures, entry forms, signs and ban-ners. We also have in-house screenprinting for promotional products, medals, t-shirts and other gear.

“Essentially we are a one-stop shop for events.”

As clients take advantage of more services, Snap Registra-tion reduces the percentage fee charged per registration.

“Grouping services also leads to more consistent branding,” added Brown. “And clients don’t have to worry about con-

by Jean B. Eggemeyer

tacting several different vendors to keep the work flow on track.”

Credit CardsThe married father of two children

calls himself “a triathlete in retire-ment” – but promises to resume

competing again soon. In his busy life he relies on Michigan Retailers Association’s credit card processing to take the hassle out of accepting payments as event participants reg-ister online.

“Our partnership with MRA is a great fit,” he said. “We work with them on the sites to ensure transactions are secure and to work in fraud protection. [Secure payment pro-cessing] is a top-notch service we can provide our clients.

“Another huge benefit is that the partnership gives clients fast, direct access to the funds their sites generate.”

Other event registration por-tals collect funds under their own names, explained Brown, and hold the money for a pe-riod of time – sometimes two weeks, 30 days, 60 days or even until completion of the event – and then disburse it back to event managers.

Snap Registration, instead, sweeps collected funds into clients’ bank accounts, directly and with little delay. Event man-agers then have cash flow to pay for medals, supplies, staff and other expenses.

Brown appreciates MRA’s superior customer service as well, pointing to the fact that all he or a client needs to do to

Wayne Brown's Grand Rapids-based Snap Registration provides services to many athletic and other events. Photo by David Trumpie

6 Michigan Retailer www.retailers.com

Continued from page 1

Legislative backers say now is the time to pass Main Streetit passed this term. I’ll certainly be pushing for it.”

She said Michigan lawmakers must move forward to enact the legislation as “the only way to guarantee our businesses will have relief.” The U.S. Senate’s favorable action on a March 22 “test vote” on a federal solution is encouraging, she said, but there is no guarantee Congress will actually pass legislation to address the prob-lem, especially as it continues to fight over budget and debt issues.

Distinguished CareerFor the third-term representative,

the fight for sales tax fairness is the latest battle in a career that’s includ-ed everything from being a watchdog over funds for colleges and university construction projects to trying to re-duce human trafficking.

Kowall, who has served on the House Appropriations Committee and subcommittees including en-vironmental quality, joint capital outlay and general government, re-cently targeted communities that she believes are diverting tax funds that voters approved for Detroit’s cultural institutions. She has in-troduced a seven-bill package to prevent local tax increment financing

State Reps. Eileen Kowall and Rob Ver Heulen (right) and MRA President and CEO James P. Hallan hold a news conference to announce the introduction of Main Street Fairness legislation.

authorities from “capturing” funds from voter-approved local millages to help support the Detroit Institute of Arts and Detroit Zoo.

“I feel it’s a matter of public trust,” she said.

She a lso was ap -pointed recently to the Michigan Commission on Human Trafficking, which Attorney General Bill Schuette established to combat the fast-growing global crimes of forcing young women into prostitution, domes-tic servitude and other forced labor.

A former dental hy-gienist who became interested in politics through her involve-ment as a designer/sales representative for the family business – Accurate Woodworking in Waterford Township – Kowall cut her teeth in local politics. She served six years on the Oakland County Board of Commissioners before winning elec-tion to the state House.

On the county board, Kowall’s focus was to maintain a nonregula-

tory approach whenever possible, she said, recalling how one com-missioner wanted to ban trans fats. She considered that an overreach by government.

“Luckily, we were able to nip it in the bud,” she said.

Passion for FairnessThe mother of two daughters and

wife for 39 years to Michael Kowall – a state senator representing the 15th District – Eileen Kowall said the Main Street Fairness issue is one she’s extremely passionate about. Of-fering a fair price and good service isn’t enough to make local retailers competitive if they’re up against a tax disadvantage, she said.

“Retail margins can be quite slim, so how do they compete with that [price] disadvantage?” she asked. “I think they really felt a pinch last holi-day season.”

Addressing that disparity will be another step in turning around Mich-igan’s economy and adding fuel to the state’s recovery, she said. That’s a key priority for the state legislature.

“I think we did a lot to get Michi-gan turned around and moving in the right direction last term – more than had been done in the last decade,” she said. “I’ve lived in Michigan my whole life. I love this state and want to see it thrive once again.”

Former MayorKowall’s Republican colleague in

the Main Street Fairness struggle tuned in to the issue well before his November election to the House from the 74th District.

Recently retired after 30 years as a Meijer Inc. attorney and as mayor of the Grand Rapids suburb of Walker – an office he held from 2001 to 2012 – VerHeulen remembers merchants in Rockford voicing concerns about the tax disparity.

His interest in local retailers’ struggle spurred him to reach out to

Kowall when he became a state law-maker, offering to sign on to the Main Street Fairness package.

“The local merchants do so much for us – they invest in our commu-

nities and hire folks,” VerHeulen said. “Main Street Fairness is not going to save a bricks-and-mortar retailer that’s not doing what the customer wants, but at least it’s not go-ing to put them at a disadvantage.”

A supporter of a free-market approach to regulating commerce, VerHeulen says he draws the line when some com-petitors get an edge by ignoring rules others have to follow.

“I think it’s impor-tant that government

not allow an unfair advantage, and I think this is an unfair advantage,” said VerHeulen, pointing to thin retail margins. “I think you just want a level playing field.”

Local PerspectiveVerHeulen, who serves on the

House Appropriations Committee and Transportation, Community Health, Judiciary and Higher Educa-tion subcommittees, aims to bring a local perspective to Lansing.

He said he’s looking for ways to repair the revenue-sharing system, which local units of government complain has crippled them in recent years because funds have been kept at the state level.

“I want to be supportive of our lo-cal levels of government,” he said. “I want to have as much done as close to the people as I can.”

The father of four adult daugh-ters and husband to Norma since 1975, VerHeulen was in office when Walker went through some of its toughest economic times in recent memory. Cash-crunched like other Michigan communities, the city closed its offices on Fridays and merged dispatch operations with Kent County.

“We had the ability to raise the mill-age, but we thought, ‘Our people are struggling, so why raise their taxes?’” he said.

That mindset will frame his legisla-tive style in Lansing as well.

“My challenge is to make sure we’re doing everything we can to get the most efficient, responsive govern-ment we can,” he said.

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

7

“You should be aware of how your employees handle credit cards and the cards' sensitive data.”

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.

Do you really know whereyour customers’ data are?

Remember the public service announcements of the 1970s and ’80s asking par-ents, “Do you k n o w w h e r e your chi ldren are?” As a busi-ness owner in

today’s dangerous business en-vironment, you should be asking yourself, “Do I know where my cus-tomers’ data are?”

I had dinner recently with a col-league who was complaining that while traveling in Florida for business, her primary card was compromised and the bad guys ran up $31,000 in trans-actions at various retail locations around the country before anyone noticed “unusual activity.” While I am sure that many people reading this have had a somewhat similar experi-ence, many may not realize how this can happen.

In this case, the victim was an ex-pert in the card-processing arena and was able to zero-in on the point of compromise. She was able to determine that the card data were taken from one of three stores where she purchased something while in Florida.

In each of these three situations the card was out of her possession for a brief period of time. The current think-ing from her card issuer is that one merchant’s employee collected her card data (including a mag stripe read) and transmitted that data to a bad guy who cloned her card and used the clone to run the $31,000 in fraudulent transactions.

As a merchant and owner of the business (and the signer on the merchant processing contract with your credit card vendor), you are responsible for the behavior of your employees. If one of your employees is skimming card data, your business (and possibly you) will end up hav-ing to deal with the card brands and local, state or federal authorities to resolve this issue.

No one wants to have to post a message on his or her website or

Facebook page like the one I saw re-cently from a merchant…

“To Our Valued Customers,In reference to the recent news story featuring us…We take our customers’ security and privacy very, very seri-ously, and have taken action to assure that any wrongdoings done by this per-son were brought to the attention of the proper authorities…”

Depending on the severity of the breach, this could very well be a life-ending event for your business.

So, what can and should you do?First, make sure your business is

PCI compliant. Fill out the question-naire at www.compliance101.com/. Second, as the business owner, you should be aware of how your employ-ees handle consumers’ credit cards and the sensitive data on those cards.

You should not only establish policies that enforce appropriate behavior, you should also perform periodic audits and training sessions. During an audit, you, as the owner, should “follow” a transaction from the point that a consumer provides card data to one of your employees all the way through to the point that the card data are no longer available to that employee.

Normally, this is during the sales process when a customer hands over the card and it is swiped through the terminal then handed back to the consumer. In some cases you may have more elaborate processes, but each process should be reviewed and have appropriate security poli-cies crafted.

Employees should be advised that theft of credit card data is a crime that is a felony, and if they see suspi-cious behavior they should report it to the appropriate person.

Please take a minute and consider where your data are – and who in your business has access to that data. It might be an eye-opening and business-saving experience.

April 2013

8 Michigan Retailer www.retailers.com

Continued on page 9

Members give high marks to customer serviceMichigan Retailers Association

has always strived to provide mem-bers with expert, personal customer service. That’s why during normal Monday through Friday business hours, MRA's department in Lan-sing can be heard helping members with credit card processing issues and concerns.

The team of positive, knowl-edgeable and experienced service representatives is a driving force of the Association and an important point of differentiation between MRA and other processing organizations and businesses.

Satisfaction SurveysAs a 27-year MRA employee and

manager of the customer service department since 2009, Penny Sier-

akowski enjoys work ing wi th members and m a k i n g s u r e her department is providing the b e s t s e r v i c e possible.

“We send out fol low-up sur -veys on a weekly

basis to members who have called

by Laura Schillingin for help,” said Sierakowski. “We ask people to rate their experience on a one to five rating scale. Our de-partment goal is to achieve a 4.8 or higher average rating at the end of each month.”

The department hit that goal every month except one during 2012, when it recorded 4.66.

If surveys are returned with negative ratings, a fol-low-up call is made to the member to find out more about the concerns.

ExperienceSierakowski notes that

a negat ive sur vey is rare, which she credits to the outstanding team of representatives in the department.

The customer service reps have an average ten-ure of nine years working in the department, some-thing unheard of in a position that normally has a high turnover rate.

The majority of MRA’s reps have previous retail experience, which helps them relate to member

concerns and provide the most practical answers.

All of the incoming phone calls to MRA customer service are credit card processing related, with the ma-

jority of the calls regarding merchant terminal errors or issues that can be resolved fairly quickly.

For more in-depth, technical issues, representatives may be on the phone

for up to an hour in order help the merchant solve the problem. On oc-casion, these more complicated calls may require the rep to work with the merchant and U.S.-based TransFirst,

MRA’s third-party administrator that handles after-hours and weekend calls, to resolve the problem.

PCI CompliantC u r r e n t l y, t h e

customer service de-partment is working to make members aware of the impor-tance of being “PCI compliant,” which means meeting the card payment indus-try’s data security standards to protect against theft of cus-tomer information.

“It is so important for merchants to com-plete their annual

PCI self-assessment questionnaire to ensure they become and remain com-pliant,” said Sierakowski. “Merchants who are not PCI compliant, including

Penny Sierakowski

Results of MRA customer satisfaction surveys for 2012. Members ranked their overall satisfaction with a recent MRA customer service experience on a scale of 0-5, with 5 being the best.

IT’S THE LAW

Will tax credit hike spursmall biz to offer health?by William J. Hallan, MRA Vice President Government Affairs and General Counsel

As the national health care reform law nears the wa-tershed date of January 1, 2014, one of the many big questions is whether increased tax credits will encourage more

small businesses to provide health in-surance to their employees.

The current small business tax credit rises to 50 percent on that date, and the jury is still out on whether that’s enough incentive to spur many small businesses to offer health coverage to their workers.

President Obama signed the Afford-able Care Act (ACA) into law on March 23, 2010, with the purpose of expand-ing health coverage. Generally, the employer-based requirements of the law go into effect on January 1, 2014.

As far as businesses are concerned, the magic number of the ACA is 50. If you have 50 or more full-time employees (aggregated part-time employees can count towards the 50 as “equivalents”) you are required to offer health coverage to the full-time employees and their dependents or pay certain taxes if you don’t.

If you’re a small business under the magic number, you’re not required to offer coverage. But if you have fewer than 25 full-time employees (and equiv-alents) you are eligible for a tax credit to help you pay for their health cover-age if you choose to offer that benefit.

Tax Credit Since 2010The availability of the small busi-

ness tax credit under the ACA is not new. In fact, it’s been available since 2010. A business is fully eligible for the credit if it employs 10 or fewer

full-time employees with average wages below $25,000.

The credit phases out as the num-ber of employees rises to 25 and average wages grow to $50,000.

The purpose behind the tax credit was to encourage small businesses to offer health coverage to their em-ployees. However, very few of the businesses eligible to claim the credit are taking advantage.

Why is that?

Larger CreditMany, including the Government

Accountability Office, say the credit is too small to offset expensive health coverage costs. Generally, the current maximum credit an eligible business could claim is 35 percent of its actual health coverage costs.

Determining eligibility is another problem. The IRS has a worksheet on its website designed to help a business determine eligibility in three simple steps. However, The New York Times reported that it actually took 15 cal-culations to complete the worksheet.

In addition, due to the phase-out provision, the credit becomes less generous as a business grows and pays its employees more.

On January 1, 2014, the credit in-creases to a maximum of 50 percent, so the question is whether the in-crease will be enough to entice small businesses to offer health coverage.

It should be noted that small busi-nesses eligible for this tax credit aren’t penalized by the ACA like large employ-ers, because the ACA does not require businesses with fewer than 50 employ-ees to provide health coverage.

For more information on how to de-termine eligibility and file Form 8941 to receive the tax credit, visit www.irs.gov or talk with your tax professional.

9

Continued from page 8

April 2013

High marks to customer servicethose who use non-compliant hardware or software, can be fined and are at a much higher risk for a data breach.”

Although MRA provides up to $100,000 in data breach coverage au-tomatically to members who process through the Association, the costs to merchants who have a data breach can exceed $100,000 in some cases.

The PCI questionnaire is avail-

able on a link from MRA’s website, at http://www.compliance101.com/. Members who need help understand-ing any of the questions should call Control Scan, MRA's partner for PCI compliance, at 800.571.3928.

Card FraudCredit card fraud is also an increas-

ing concern for merchants, which is why MRA’s customer service reps make it a priority to educate members and make them aware of the risks.

Merchants who believe a transac-tion may be fraudulent should call customer service at 800.563.5981, se-lect option 4 and ask for a “code 10” authorization.

Sierakowski also reminds members that it’s important to understand that receiving a card authorization only means the funds are available, not that the card being used belongs to the person making the purchase.

Educating members about PCI compliance, fraud awareness and other important processing issues is one of the most rewarding aspects

of the job, according to Sierakowski. “Merchants often call in con-

cerned about their processing rates and the fees they are paying. By teaching them about what infor-mation is needed when processing a card and how they can get the lowest swipe rate, we are helping members save money. In today’s economy, small changes that can

add to a business’s bottom line are appreciated.”

Hold TimesCustomer service works hard to

answer calls as quickly as possible throughout the day. Members who are on hold for more than four min-utes for a rep in MRA’s department are automatically transferred to TransFirst, which handles overflow calls when needed.

Calling during the morning hours, which tend to be slower than the afternoon, can also decrease the po-tential wait time.

“Our members’ time is valuable, and I know a downed terminal can cause frustration in their stores, so we work hard to answer calls as quickly and efficiently as possible,” said Sierakowski.

MRA members, through their sur-vey responses, say they appreciate it.

Laura Schilling is MRA communications assistant and Retailers Mutual Insurance Company associate underwriter.

PCI Compliance • You must complete an annual PCI self-assessment questionnaire. The questionnaire is available at www.compliance101.com. • Control Scan, at 800.571.3928, can assist you with understand-ing PCI compliance questions, but its reps cannot answer any of the questions for you unless they are familiar with your procedures and equipment. • You should be sure your hardware and software are PCI compliant. These terminals are no longer compliant: Zon Jr., Tranz, Omni and Hypercom T7P. • Failure to be compliant could

result in fines, or worse yet, a data breach at your business.

Fraud Awareness • Instances of credit card fraud reported by merchants have been increasing. • If you are suspicious of a credit card sale, call customer service, select option 4 and ask for a “code 10” authorization. • If your terminal approves a card, it only means the funds are available. It does not ensure that the person making the purchase is actually the cardholder. • Never wire money to a custom-er as part of a sale. Never!

Customer Service Hot Topics

Continued from page 5

resolve a problem or find an answer is pick up the phone.

“There are a lot of companies out there doing bankcard process-ing, trying to lure customers in with teaser rates,” he said. “But in those situations, there is always a ‘gotcha’

somewhere in the fine print.“That professional, personal touch is

important in everything we do,” he said.

Jean B. Eggemeyer is a freelance writer, small business owner and former Michigan Retailers Association employee.

Company puts events together in a snap

LOTTERY

by M. Scott Bowen, CommissionerNew $20 Instant tickets proving popular with customers

The facts and figures are in and it’s official – $20 Instant tickets are one hot com-modity!

Since October 1, 2012, $20 In-stant game sales, which account

for over 10 percent of total Instant sales, are up a whopping 35 percent over last year.

On March 4 we launched our new-est $20 ticket, Diamond Payout™ (IG #650). Diamond Payout™ is a one-of-a-kind instant game and will surely catch the attention of your players with the highest prize payout ever seen on a Michigan Lottery Instant game. It features:

• Three top prizes of $1,000,000• Over $50,000,000 in total prizes• Over 200,000 prizes from $100 to $5,000.The Lotter y’s $20 por t fol io

also includes $50,000,000 Cash Spectacu lar™ ( IG #488) and $1,000,000 Winner™ (IG #615). Together, these games have over $40,000,000 in total cash prizes still

available, including four $1,000,000 top prizes.

In order to take advantage of this hot-selling season, be sure to keep your $20 games fully stocked and promoted. If you have questions, talk with your Lottery sales rep. He or she is there to help.

Cash for Life The Cash for Life Instant games

were a critical part of our success last year, accounting for 24 percent of total Instant game sales. On April 2 we introduced the All New Cash for Life family of games.

Here are the enhancements we’ve made to the series:

• New ticket design• More top “LIFE” prizes

˚ The $1 ticket - FOUR “$400 a week for life” top prizes

˚ The $2 ticket - FOUR “$800 a week for life” top prizes

˚ The $5 ticket - THREE “$2,000 a week for life” top prizes

˚ The $10 ticket - THREE “$4,000 a week for life” top prizes

• Higher prize payout• Better overall odds.With these fun details, encourage

10 Michigan Retailer www.retailers.com

your Lottery patrons to play the All New Cash for Life Instant games and you’re sure to see your inventory fly off the shelves.

As with the $20 Instants, if you need additional information about Cash for Life or other games, talk to your Lottery representative!

Mobile AppThe Michigan Lottery’s all new

mobile app (available for the iPhone and iPad, as well as Android based smartphones and tablets) has a completely new look and in-cludes many new features players have requested.

New features include the abil-ity to scan non-winning draw game tickets into the Player’s Club, re-ward catalog access and a retailer finder. In addition to the great new features, players will still be able to view winning numbers, see the lat-est jackpots, play Club Keno “To Go” and more.

Tax-Free RaffleSales of the $10 all-new $40,000 Tax-

Free Raffle tickets are going on now at all Michigan Lottery retailers.

The top prizewinners will walk away with $40,000 – tax free! This raf-fle has the best overall odds of any raffle to date – 1 in 6 tickets will win a prize.

On April 15, Tax Day, a drawing will be conducted to select the win-ning raffle numbers. For every 30,000 raffle tickets sold, 5,001 prizes will be awarded: one $40,000 top prize, 50 prizes of $100, 1,850 prizes of $50, and 3,100 prizes of $15.

Remember, time is limited to purchase tickets, so be sure to let your customers know they have to act fast in order to be part of the raffle action.

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

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

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Last year, the Cash For Life series of tickets accounted for 24% of all Michigan Lottery instant game sales. Cash For Life is back with a new look, better overall odds of winning, and over $126 million in total cash prizes. Four different tickets with chances to win up to $4,000 a week for life. Be sure to keep Cash For Life in stock and on display so your players have a chance to turn an instant into a lifetime!

Top prize Cash For Life® winners will receive their prize payments in annual installments over their lifetime or over 20 years, whichever is greater, unless within 60 days from the date they claim their prize, they request the Cash Option method of payment. Overall odds of winning $1 Cash For Life: 1 in 4.53. Overall odds of winning $2 Cash For Life: 1 in 4.25. Overall odds of winning $5 Cash For Life: 1 in 4.03. Overall odds of winning $10 Cash For Life: 1 in 3.89. If you bet more than you can afford to lose, you’ve got a problem. Call 1-800-270-7117 for confidential help.

RETAILERS