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Sales Momentum
Lower Electric Rates
Solid back-to-school numbers lifted Michigan retail sales during August after a two-month slide. Page 3
Passage of “electric choice” legislation would increase competition and drive down electric rates, a new study finds. Page 5
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Confronting Shoplifters
Retailers have a legal right to detain suspected shoplifters, but there are limits to what you can do. Page 9
® October 2012 Vol. 37 No. 5
Michigan lawmakers moving bills to fight organized retail theft New laws that would give law enforcement agencies better tools to go after organized retail crime are moving through the Michigan Legislature. The package has strong backing from Michigan Retailers Association and Governor Rick Snyder, who included this growing crime problem in his March 7 Special Message on Public Safety. MRA worked with the governor’s office on the issue and is working with lawmakers to help enact the legislation. House Bills 5843 and 5902, sponsored by Rep. Joe Graves (RArgentine Township), were approved by the House Commerce Committee on September 27 by a unanimous, bipartisan vote and sent to the House floor for a vote. Senate action also is required. Criminal rings “Organized retail crime is responsible for a large and growing share of the estimated $15–30 billion in annual retail theft across the nation,” said MRA President and CEO James P. Hallan. “Those involved aren’t the conventional shoplifter, but sophisticated rings of professional criminals who often sell the stolen merchandise for cash or drugs, which can be used to finance other major criminal activities.” The legislation defines organized retail crime as the theft of retail merchandise from a retail merchant with the intent of reselling, distributing or transferring stolen merchandise to another merchant or person in exchange for anything of value. The crime would be a felony with a maximum penalty of five years in prison and a fine of $5,000 plus the cost of Continued on page 4
The official publication of the Michigan Retailers Association
www.retailers.com
‘Proposition 1 is a yes, no on the rest’ When it comes to the six proposals on the November 6 ballot, Michigan Retailers Association recommends voters act on a slogan making the rounds: “Prop 1 is a yes, no on the rest.”
The mantra, penned by editorial writers at The Detroit News, mirrors the positions of MRA’s Board of Directors. The board, after studying all of the ballot issues, is urging a No vote on all of the November 6
Ideation leader Ungrodt elected MRA board chair Tom Ungrodt, president and CEO of Ideation in Ann Arbor, is the new chair of the Michigan Retailers Association Board of Directors. He succeeds Barb Stein of Great Northe r n Tr a d i n g Company i n R o c k f o rd and is among several new o f f i c e r s and board Tom Ungrodt m e m b e r s elected at the Association’s Annual Meeting and board meeting on August 21.
Ideation is a leading producer of marketing solutions for independent gift retailers across the nation. Ungrodt also oversees two Michigan gift stores, Crown House of Gifts in Ann Arbor and Dayspring Gifts in Chelsea. He was first elected to the MRA board in 2007 and served as vice chair the past two years. He is also a past chair of the Retailers Mutual Insurance Company Board of Directors. Dan Marshall, president of Marshall Music Company, will serve as MRA board vice chair for 2012-13. His family-owned company is one of the largest full-line music retailers in the country and operates stores in Lansing, Kalamazoo, Grand Rapids, Troy, West Bloomfield, Allen Park and Traverse City. Marshall chaired the Retailers Mutual board the past two years and was first elected to the Continued on page 2
ballot proposals except Proposal 1, the referendum on the Emergency Manager law. The board supports reinstating the emergency manager law, which has been suspended pending the outcome of the election. A Yes vote favors reinstatement. “The Emergency Manager law is an effective tool for the state to help local governments avoid bankruptcy,” said MRA President and CEO James P. Hallan. “Retailers are an integral part of their communities and, like all residents, can be harmed when local finances are in disarray.” Proposals 2–6 are proposed constitutional amendments that MRA believes should be defeated, Hallan said. “These proposals do not represent good public policy and should not be part of our state constitution.” Summaries of the proposals and MRA’s positions follow. In addition, MRA has prepared a tear-off card for voters to take with them to the polls. A similar card also can be downloaded from MRA’s website, www.retailers.com. Continued on page 4
Insurance partner adopts new name MRA’s longstanding partner in providing health insurance solutions has changed its identity. MDA Insurance is now Member Insurance Solutions. Along with the name change come a new logo, new website and new telephone number to better serve MRA members. For many years, MDA Insurance has worked with members of the association community to meet their health, commercial and personal insurance needs. The new business name reflects the company’s growing commitment to serving membership organizations in Michigan. The new identity will make it easier for MRA members to understand whom the insurance agency serves Continued on page 4
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Michigan Retailer
Keep it working - Vote!
www.retailers.com
Board of Directors: Thomas Ungrodt Chair Ideation, Ann Arbor
by James P. Hallan, MRA President and Chief Executive Officer The item pricing reforms we all worked so hard to achieve last year are working. That doesn’t come as real news to any of us, but it’s good to see recent government economic data confirm that fact. We knew, of course, that the old item pricing regulations had cost retailers and consumers hundreds of millions of dollars annually. We knew dropping the
p r i c e - s t i c k e r i n g re q u i re m e n t would benefit retailers, shoppers and retail employees. We knew Gov. Snyder and state legislators were doing the right thing by enacting the Shopping Reform and Modernization Act. And, sure enough, the new data indicate that the young reforms are indeed helping keep costs and prices down and helping create jobs. Two economists, Scott Watkins of
Ungrodt elected MRA board chair
Continued from page 1
MRA board in 2008. Continuing to serve as officers are: James P. Hallan, president and CEO; Jean Sarasin, board secretary; and Peter Sobelton, treasurer. Sarasin is MRA executive vice president
Ungrodt
Hallan
Marshall
property companies. New director At the Annual Meeting of the membership, held in Lansing, Brian Ducharme was elected to the board
Sobelton
Sarasin
Ducharme
for the first time. The vice president and general manager of the Mobility Division of AT&T for Michigan and Indiana had served on the board of Michigan McCurry Mullins Joyce Miller Retailers Ser vices, Inc., the wholly owned and chief operating officer, and Sosubsidiary of MRA, since 2008. belton is a Birmingham resident Ducharme oversees AT&T’s 101 and owner-partner in several retail company-owned retail stores and 120 indirect retail locations in the two states. He was elected to a three-year term. Sobelton also was re-elected to the MRA board for a three-year term, as were: Joe McCurry, an executive with Credit Card Group and retired Detroit district general manager for Sears; and Larry Mullins, owner of Brandon Tire & Battery in Ortonville. McCurry has served on the board since 1997. Mullins joined the board in 1996. Sobelton has been a board member since 1998. Retiring from the board after six years was John President and CEO James P. Hallan presents out- Smythe, retired Lansing going MRA chair Barb Stein with a crystal plaque banking executive. recognizing her two years leading the board.
Continued on page 8
Anderson Economic Group in East Lansing and Donald Grimes at the University of Michigan, point out the following: • Grocery store prices from the first half of 2011 to the first half of 2012 increased far less in Michigan (2.5 percent) than at the national level (3.7 percent). (Source: U.S. Bureau of Labor Statistics, Consumer Price Inflation, Food at Home category.) • Grocery store employment is currently at 60,700, up from the 2011 figure of 60,600. This is the first increase in grocery store employment in Michigan since at least 2002. (Source: Michigan Department of Technology, Management and Budget.) • Total wages paid by Michigan food and beverage establishments, including grocery stores, showed a significant increase from first quarter 2011 to first quarter 2012 ($361.4 million to $390.5 million). (Source: U.S. Quarterly Census of Employment and Wages.) The larger point is that these reforms didn’t just happen. We tried for decades as an industry to get them through the legislature, without a successful end result. And then, after more than 30 years of trying, Michigan “suddenly” had the right governor and enough legislators committed to improving the retail business climate. They made the changes. It’s a clear-cut example of why elections matter. It’s also a glaring reminder that every one of our votes is valuable, and we should go into the voting booth armed with knowledge on which candidates or ballot issues are likely to help make Michigan’s business climate better. In this edition we have included a helpful guide to the six proposals on the November 6 statewide ballot, as well as our Friend of Retail list of candidates. Please give them a good look before you vote. We should also be mindful that there are other organized groups that have an agenda far different than ours. There are those who would gladly undo the item pricing and other reforms, despite the fact they’re working. Let’s make sure they keep working. Be sure to vote.
James P. Hallan
President and CEO Michigan Retailers Association
Dan Marshall
Vice Chair Marshall Music Company, Lansing
Peter R. Sobelton Treasurer Birmingham
Jean Sarasin
Secretary Michigan Retailers Association
Barb Stein
Past Chair Great Northern Trading Co., Rockford
Brian Ducharme AT&T
Becky Beauchine Kulka
Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos
Orin Mazzoni, Jr.
Orin Jewelers, Garden City
Joseph McCurry
Credit Card Group
Larry Mullins
Brandon Tire & Battery, Ortonville
R.D. (Dan) Musser III
Grand Hotel, Mackinac Island
Joe Swanson Target Corp.
James Walsh
Meijer, Inc., Grand Rapids
D. Larry Sherman
Board Member Emeritus
Michigan Retailers Services, Inc. Board of Directors: Bo Brines Little Forks Outfitters, Midland
Bill Golden
Golden Shoes, Traverse City
Lisa McCalpine-Wittenmyer Walgreens
James P. Hallan Thomas B. Scott Publisher
Editor
Pat Kerwin
Design Manager
Publication Office: 603 South Washington Avenue Lansing, MI 48933 517.372.5656 or 800.366.3699 Fax: 517.372.1303 www.retailers.com www.retailersmutual.com
Subscriptions:
Michigan Retailer (USPS 345-780, ISSN 0889-0439) is published in February, April, June, August, October and December for $20 per year by Michigan Retailers Association, 603 South Washington Ave., Lansing, MI 48933. Subscription fees are automatically included in the Michigan Retailers Asociation membership dues. Periodical postage paid at Lansing, Michigan. POSTMASTER: Send address changes to 603 South Washington Ave., Lansing, MI 48933. The Michigan Retailer may be recycled with other white office paper.
October 2012
3
MICHIGAN RETAIL INDEX
Sales performance improves after 2-month dip The Index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity. Looking forward, 56 percent of retailers expect sales during September-November to increase over the same period last year, while 14
Current
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percent project a decrease and 30 percent no change. That puts the seasonally adjusted outlook index at 67.7, up slightly from 67.4 in July. A year ago August it was 61.1. The U.S. Commerce Department reported that national retail sales rose 0.9 percent from July to August, but only 0.1 percent in non-auto and nongasoline categories. Michigan sales tax receipts totaled
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$634.1 million in August, up 0.1 percent from August 2011. For the year, sales tax collections are up 3.6 percent. Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www. retailers.com/mra/news/michiganretail-index.html. The website includes figures dating back to July 1994.
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More Michigan retailers increased sales in August, the first time in three months the overall retail industry has improved its performance, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago. “Sales in late summer, the peak of backto-school shopping, helped the retail industry rebound from a two-month slip,” said Tom Scott, MRA senior vice president communications and marketing. “The apparel, shoes and general merchandise categories were strong, suggesting that back-to-school shopping was helpful in reversing the trend from early and mid summer.” Sales improved despite the drag caused by a continued rise in Michigan’s unemployment rate, Scott noted. In August it jumped from 9.0 to 9.4 percent, the fourth monthly increase after dropping nine consecutive months. The August Michigan Retail Index found that 54 percent of retailers increased sales over the same month last year, while 27 percent recorded declines and 19 percent saw no change. The results create a seasonally adjusted performance index of 61.7, up from 56.1 in July and 58.6 in June. A year ago August it was 55.9.
Seasonally adjusted diffusion index, calculated by adding the percent of respondents indicating increased sales and half the percent indicating no change, and then seasonally adjusting the result using the U.S. Census Bureau’s X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.
200 (millions)
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Be sure to complete your online survey each month!
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Michigan Retailer
www.retailers.com
MRA: ‘Proposition one is a yes, no on the rest’ Continued from page 1
The six proposals: Proposal 1: Emergency Manager Law Referendum Overview: A referendum to repeal Public Act 4 of 2011, known as the Emergency Manager law. The 2011 law gave emergency managers greater powers to dissolve contracts and suspend elected officials’ power when handling a financial emergency in a public school district or a unit of local government. Emergency managers have already been appointed in the following cities: Benton Harbor, Ecorse, Flint, and Pontiac as well as the Detroit, Highland Park, and the Muskegon Heights school districts. The City of Allen Park is undergoing a financial review. Pros: Unions and many liberal lawmakers consider P.A. 4 an undemocratic infringement on people’s right to have autonomous local elected officials. Cons: With the referendum on the November ballot, the law is suspended and the emergency managers acting in seven cities and school districts have limited ability to perform their duties. A repeal of the law would halt all last resort activity to save cities and schools from bankruptcy. MRA Recommends VOTE YES. This would not directly affect retailers but may affect the quality of resources available and the value of the overall community if the state cannot help prevent local governments from going through bankruptcy. Constitutional Amendments Proposal 2: Right to Collective Bargaining Overview: This would create a guarantee of collective bargaining rights for both public and private employees in the Michigan Constitution. The amendment would also ban the Michigan legislature from making Michigan a right-to-work state. Pros: Supporters say this would prohibit state and local governments from interfering with collective bargaining rights and protect current laws establishing minimum wages, hours and working conditions. Cons: If the amendment is approved, it could invalidate as many as 80 laws that were passed during the 2011-2012 legislative term. Many of the laws that may be invalidated were designed to help control skyrocketing costs and liabilities for local governments and schools. If cost controlling measures are removed, taxes may be increased on residents, property and businesses. MRA Recommends VOTE NO. MRA believes that employers should be able to continue making decisions about collective bargaining with
employees and not have rights constitutionally guaranteed. Unions have been attempting to organize different sectors and may expand to retail employees if this passes. Retailers should also be concerned over the impact of overturning these laws – many of
bargaining rights to home help care workers. The state currently has about 50,000 Medicaid recipients receiving assistance support through the home help program. Pros: The registry of home health workers may help Medicaid recipients find health p ro f e s s i o n a l s t h a t meet their needs. Cons: Opponents of the proposal consider this an attempt to force unionization of private caregivers and to siphon off money from the state. MRA Recommends VOTE NO. This proposal would not likely affect the retail community. However, it sets an alarming precedent in potentially organizing large groups of private individuals into a union organization.
“These proposals do not represent good public policy and should not be part of our state constitution.” which were designed to help control skyrocketing costs and liabilities for local governments and schools. If cost controlling measures are removed, taxes may be increased on residents, property, and businesses. Proposal 3: “25 by 25” Overview: This proposal would require utility companies to obtain at least 25 percent of their electricity from clean renewable energy sources by 2025. A 2008 law required that at least 10 percent of Michigan’s energy sold be produced from renewable sources by 2015. This proposal would raise that requirement an additional 15 percent over 10 years. Pros: Only 3.6 percent of the energy used in Michigan is currently from renewable sources. Supporters claim that the 25% by 2025 requirement would bring $10 billion of investment to Michigan and create jobs for Michigan workers in the clean energy sector. Using more wind and solar energy will reduce pollution and give Michigan cleaner and healthier air and water, and protect the Great Lakes. Cons: Utility companies have indicated that they do not believe the resources exist to meet the 25% by 2025 standard. Renewable energy is significantly more expensive and recent estimates put the cost starting at $10 billion, depending on which renewable sources are used. MRA Recommends VOTE NO. With the higher energy costs falling to retailers, MRA recommends opposing this proposal. Retailers should expect higher energy bills in the future if this amendment is adopted in November. Additionally, MRA supports electricderegulation legislation, which would increase consumer choice and decrease electricity costs for retailers. Proposal 4: Michigan Quality Home Care Council Overview: This would establish the Michigan Quality Home Care Council, which would create a registry of workers from which consumers could choose their care provider, require training of home care providers, and provide limited collective
Proposal 5: Two-Thirds Supermajority Vote for Tax Increases Overview: This would prohibit the imposition of new or additional taxes or expansion of the base of taxation by the State of Michigan unless approved by a 2/3 majority of members in each chamber of the legislature or by a statewide vote of the people. Pros: A two-thirds supermajority before raising taxes would prevent job losses to neighboring states with lower taxes, like Indiana. Michigan requires a threefourths supermajority to raise the state educational property tax, which supporters claim has saved Michigan taxpayers billions of dollars in property taxes since 1994. Cons: This could create minority rule in the Michigan Legislature, letting a handful of politicians stop the majority when it comes to tax issues. Without the flexibility to increase or expand the tax base, residents could
see their quality of life deteriorate. MRA Recommends VOTE NO. The bipartisan opposition to this proposal reflects MRA’s position that while retailers do not believe raising taxes should be taken lightly, this would significantly limit the legislature’s ability to control funding and balance the state budget. Proposal 6: Public Vote on a New International Crossing Overview: This would require a vote of the people before the State of Michigan can construct or finance new international bridges or tunnels for motor vehicles. This is a response by the Ambassador Bridge Company, the owners of the existing private Detroit-Windsor span, to the New International Trade Crossing (NITC). Pros: The proposal would give Michigan taxpayers a direct voice on how or if their tax dollars should be spent on international transportation projects. Cons: There is some question what effect this would have on the current NITC project supported by Governor Snyder. The Administration does not believe it would impact the project, since no public funds will be used. If it did impact the NITC, that could hurt commerce by blocking the new bridge that is designed to reduce traffic and make U.S.–Canada commerce more efficient. MRA Recommends VOTE NO. MRA feels that the NITC will benefit retailers by reducing the time and current travel constraints between the U. S. and Canada. We recommend opposing this proposal and allowing the governor and legislature through representative government to do their job to improve infrastructure without requiring a vote of the people.
Moving bills to fight organized retail theft Continued from page 1
stolen or destroyed merchandise. Current Michigan laws are limited and deal primarily with personal shoplifting, according to Hallan. That means prosecutors are left with a patchwork of criminal statutes that don’t apply specifically to organized retail crime and make enforcement
difficult. “Organized retail crime not only hurts retail businesses, it has farreaching negative effects throughout society,” Hallan said. “We appreciate the governor and lawmakers addressing this problem, and we continue to help every way we can.”
Insurance partner adopts new name
Continued from page 1
and what it does (find insurance solutions for members), and to find information about products that MRA endorses. Contact information for Member Insurance Solutions is: • New phone number: 800.878.6765 • New website: www.memberinsur-
ancesolutions.com • Same fax number: 517.484.5460. All the MDA Insurance personnel MRA members have worked with remain on the job with Member Insurance Solutions, which operates out of the same Okemos office that MDA Insurance has occupied.
October 2012
5
MRA endorses 7, names 65 ‘Friends of Retail’ Michigan Retailers Association has endorsed seven candidates and designated 65 others as a “Friend of Retail” in the November 6 elections for the Michigan House of Representatives. The seven endorsed candidates have gone “above and beyond” by taking leadership roles on key retail issues such as the successful Shopping Reform and Modernization Act of 2011 and the current campaign for Main Street Fairness, according to William J. Hallan, MRA vice president government affairs and general counsel. MRA designated another 65 candidates as a “Friend of Retail” for demonstrating an understanding of the retail industry’s priorities and a willingness to work toward solutions, Hallan said. All of the candidates running for state representative were invited to answer a retail issues questionnaire sent by MRA this past summer. “Michigan Retailers Association looks forward to working with these candidates as legislators next year in our continuing efforts to promote, protect and grow the retail industry here in Michigan,” he said. The following candidates, listed by district, received endorsements: District # Candidate 44. Eileen Kowall (R-White Lake) 49. Jim Ananich (D-Flint) 74. Rob VerHeulen (R-Walker) 86. Lisa Posthumus Lyons (R-Alto) 90. Joe Haveman (R-Holland) 98. Jim Stamas (R-Midland) 104. Wayne Schmidt (R-Traverse City)
The following 65 candidates have been designated as a Friend of Retail:
District # Candidate 2. Daniel Grano (R-Grosse Pointe Park) 10. Phil Cavanaugh (D-Redford Twp) 13. Andrew Kandrevas (D-Southgate) 15. Priscilla Parness (R-Dearborn) 17. Anne Rossio (R-Carleton) 19. John Walsh (R-Livonia) 20. Kurt Heise (R-Plymouth) 22. Harold Haugh (D-Roseville) 23. Pat Somerville (R-New Boston) 24. Anthony Forlini (R-Harrison Twp) 25. Henry Yanez (D-Sterling Heights) & Sean Clark (R-Warren) 26. Jim Townsend (D-Royal Oak) 30. Jeff Farrington (R-Utica) 31. Lynn Evans (R-Fraser) 32. Andrea LaFontaine (R-Clinton Twp) 37. Bruce Lilley (R-Farmington) 38. Hugh Crawford (R-Novi) 40. Mike McCready (R-Birmingham) 42. Bill Rogers (R-Brighton) 43. Gail Haines (R-Lake Angelus) 46. Bradford Jacobsen (R-Oxford) 47. Cindy Denby (R-Fowlerville) 51. Joseph Graves (R-Linden) 52. Mark Ouimet (R-Ann Arbor) 56. Dale Zorn (R-Ida)
58. Kenneth Kurtz (R-Coldwater) 59. Matt Lori (R-Constantine) 61. Margaret O’Brien (R-Portage) 62. Mark Behnke (R-Battle Creek) 63. Jase Bolger (R-Marshall) 64. Earl Poleski (R-Jackson) 65. Mike Shirkey (R-Clarklake) 67. Jeff Oesterle (R-Mason) 68. Andy Schor (D-Lansing) 70. Rick Outman (R-Six Lakes) & Mike Huckleberry (D-Greenville) 71. Deb Shaughnessy (R-Charlotte) 72. Ken Yonker (R-Caledonia)
Kowall
Ananich
73. Peter MacGregor (R-Rockford) 77. Tom Hooker (R-Byron Center) 78. Dave Pagel (R-Berrien Springs) 79. Al Pscholka (R-Stevensville) 80. Bob Genetski (R-Saugatuck) 81. Dan Lauwers (R-Brockway) 82. Kevin Daley (R-Lum) 83. Paul Muxlow (R-Brown City) & Carol Campbell (D-Lexington) 87. Mike Callton (R-Nashville) 88. Roger Victory (R-Hudsonville) 89. Amanda Price (R-Holland) 91. Holly Hughes (R-Montague) &
VerHeulen
Lyons
Haveman
Collene Lamonte (D-Muskegon) 93. Tom Leonard (R-Lansing) 94. Tim Kelly (R-Saginaw) 97. Joel Johnson (R-Clare) 99. Kevin Cotter (R-Mt. Pleasant) 100. Jon Bumstead (R-Newaygo) 102. Brendan Maturen (D-Stanwood) 103. Bruce Rendon (R-Lake City) 105. Greg MacMaster (R-Kewadin) 106. Peter Pettalia (R-Presque Isle) 107. Frank Foster (R-Petoskey) 108. Ed McBroom (R-Vulcan) 110. Matt Huuki (R-Atlantic Mine)
Stamas
Schmidt
Competition lowers electric rates Passage of “electric choice” legislation will increase competition and drive down electric rates for retailers as well as other businesses and residents, according to a new study of Michigan’s electric utility industry. The study was released August 24 at a news conference hosted by Michigan Retailers Association. “Retail Electric Competition in Michigan: Growing Michigan’s Economic Garden,” found that by raising the current 10 percent cap on competitive electricity in Michigan, costs for businesses and consumers would drop, stimulating economic growth and creating thousands of new jobs for Michigan residents. Prepared by Dr. Jonathan Lesser, president of Continental Economics, Inc., and sponsored by the Energy Choice Now coalition, the study concludes that allowing more customers to shop for electricity in the competitive market would save an estimated $170 million per year on electric costs, money that could be reinvested to grow Michigan’s businesses. MRA President and CEO James P. Hallan said the Association supports new legislation (House Bill 5503 and Senate Bill 1035) introduced by Representative Mike Shirkey (R-Clark Lake) and Senator Arlan Meekhof (R-West Olive) that would raise the cap and open competition for all customers. Lack of competition The report documents how a lack of competition in Michigan, a result of 2008 legislation that capped competi-
tion at just 10 percent of total electric use, contributed to a steady and significant increase in electricity rates by the state’s two largest utilities, Detroit Edison (DTE) and Consumers Energy (CE). Between 2000 and 2008, when all Michigan consumers were able to choose their own electric supplier, the gap between Michigan retail electric rates and those of neighboring and competing states began to close, and rates in Michigan fell below the national average, Lesser found. After the 2008 legislation that capped com-
Energy Choice Now. “Higher electric costs are crippling Michigan businesses and serving as a deterrent to economic growth, which is why nearly 10,000 businesses are currently languishing on a waiting list to gain access to competitive electricity.” Waiting list Nearly 10,000 businesses are currently on a waiting list to gain access to competitive electricity, according to the coalition. Lack of
Comparison of Average Electric Rates by Sector, 2011
petition, rates increased – as much as 47 percent for residential customers, 40 percent for commercial customers, and 35 percent for industrial customers. Businesses that were able to choose their electric provider before the 10 percent cap was reached have enjoyed over $350 million in electricity cost savings over the past three years. “It’s no coincidence that Michigan businesses, which are denied the opportunity to shop for electricity in the competitive market, suffer from the highest electricity rates in the Midwest and rates that are higher than the national average,” said Wayne Kuipers, executive director of
electric service competition stifles Michigan’s efforts to remain competitive as it struggles to climb out of the recession. Rep. Shirkey called for businesses to become active on the issue and push for a hearing in the House Energy and Technology Committee. Energy Choice Now is a coalition of businesses, consumers, suppliers, trade associations and other interested stakeholders that are committed to passing legislation that will raise the current cap on Michigan’s electricity suppliers, increase competition and lower energy costs. A link to the full report is available at the coalition website, http://www. ECNstudy.com/.
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Michigan Retailer
www.retailers.com
Health care reform law: questions and answers This is the second of two parts of an article provided by Member Insurance Solutions (formerly known as MDA Insurance), Michigan Retailers Association’s partner in providing health care insurance service to MRA members. The first part ran in the August Michigan Retailer and is available online at www.retailers.com under the News/Michigan Retailer section of the website. When the U.S. Supreme Court upheld the Patient Protection Affordable Care Act (PPACA) as constitutional back in June, it left everyone asking: So now what? The following are some of the key questions and answers regarding the big changes coming in 2014.
What is an insurance exchange? In theory, it is a website where people and small businesses can learn about and buy health insurance. Small business owners and individuals and families would be able to enroll in private or public health insurance coverage on the exchange. The exchange is supposed to increase the purchasing power of small businesses by allowing them access to more competitively priced health insurance plans. The exchange is also supposed to include customer assistance tools to help them learn about prices, quality and physician and hospital networks. Personal assistance should also be available. At this time it remains unclear what type of help will be offered, or from whom it will be available. Your endorsed health insurance agency has been working with state officials to ensure that licensed insurance agents will be able to participate with and help advise their clients in the exchange setting.
What does Michigan need to do? The state legislature had to decide whether to move forward with creating the state Affordable Insurance Exchange (or MiHealth Marketplace ) which, according to the health reform law, is supposed to be open for business October 1, 2013. The governor and state Senate wanted Michigan to move forward because of tight implementation deadlines and the availability of federal funds. They believed that if we must have an exchange, it is better to run it instate than wait to see what is forced on Michigan residents by the federal government. The state House, however, had serious reservations about the cost
involved and blocked any legislation enabling the exchange. Lawmakers argued that it was premature to set up the exchange before knowing who would win the presidency; Mitt Romney has said that if elected he would work to overturn key parts of the health law. In the end, Gov. Rick Snyder reluctantly conceded that House Republicans would not move ahead in the immediate future with legislation to create a Michigan-run exchange, and his administration will now try to develop a federal-state partnership on the issue. In Washington, arguments have already begun about whether federal subsidies will be available to individuals in states that do not enact exchanges, since the law says money is to be used to purchase from state exchanges. What is “pay or play” for employers? Under the pay-or-play rules, certain employers with at least 50 full-time-equivalent employees will face penalties if one or more of their full-time employees obtain a premium credit through an exchange. An indi-
vidual may be eligible for a premium credit either because the employer does not offer health care coverage or the employer offers coverage that is either not “affordable” or does not provide “minimum value.” Effective January 1, 2014, “applicable large employers” have to offer “affordable” minimum essential coverages, or pay a penalty on their taxes. Some details: • A company that employs an average of 50 or more full-time employees during the preceding calendar year is an “applicable large employer.” If you have fewer than 50 employees, you are not mandated to provide health insurance, but you may want to do so for recruitment and retention purposes. • Minimum essential coverage is a plan that covers 60 percent of the expected benefit costs. These plans may be purchased from insurance agents or from the state or federal health insurance exchange. • If the large employer does not offer health insurance, the penalty – or tax – kicks in only if at least one employee enrolls in a plan from the health insurance exchange and qualifies for premium subsidies or other tax credits from the federal government. • Simply put, an “affordable” plan is one that requires the employee to pay no more than 9.5 percent of his or her income on health insurance premiums. • If you employ 50 or more and you offer employees a plan that costs them more than 9.5 percent of their income, these employees may opt to purchase a plan on the health care exchange and receive a federal premium subsidy or other tax credit. If at least one employee purchases insurance on the exchange and is eligible for the federal subsidy, your business is subject to a penalty. How much is the tax/penalty for not providing a plan with minimum essential coverage – or any health plan? The penalty is assessed monthly and is triggered for that month if one of your employees buys insurance on the exchange and is eligible for a federal subsidy or tax credit. If you have 50 full-time employees, here’s how you figure the penalty. The employer receives a credit for 30 fulltime employees, so subtract 30 from the total number of full-time employees and calculate the penalty based on 20 employees. The annual peremployee penalty is $2,000. To find the monthly penalty, divide $2,000 by 12 ($166.67), and multiply that by 20 (the employee base), for $3,333.40. That’s your penalty for the month. How much is the penalty for not providing an affordable plan? The annual per-employee penalty
for failing to offer affordable coverage is $3,000. The penalty is figured monthly and is triggered for that month if one employee buys insurance on the exchange and is eligible for a federal subsidy or tax credit. In this case, you are only penalized for the number of employees who actually purchase health insurance through an exchange and receive the subsidy. Let’s say you have 5 employees who qualify. Divide $3,000 by 12 ($250) and multiple that by 5. The monthly penalty is $1,750. Keep in mind that this penalty is in addition to any health insurance premiums you are paying on behalf of your other employees. What is the “individual mandate?” Individuals must maintain minimum essential coverage for themselves and their families (lapses of less than three consecutive months are okay) or pay a penalty (now ruled a tax by the U.S. Supreme Court). Even if you don’t employ 50 or more people and do not have to provide employer sponsored insurance, be aware that the individual mandate will apply to most of your employees. They will be required to obtain coverage for themselves from somewhere by 2014. They may look to you for answers. We want you to know Member Insurance Solutions is here to help you and your employees through these times. What is the tax if an individual fails to buy health insurance? Beginning in 2014, a sliding tax schedule is imposed. Initially, the tax will be as low as $95. Ultimately, the penalty will be the greater of $695 per year, up to a maximum of three times that amount, or 2.5 percent of household income. Who qualifies for subsidies? To qualify for a subsidy on the exchange, a taxpayer under the age of 65 must have annual household income between 100 percent and 400 percent of the federal poverty line for the taxpayer’s family size. In 2012 the federal poverty line for the 48 contiguous states for a two-person household is $15,130; for a family of four, it is $23,050. The taxpayer cannot be claimed as a tax dependent of another taxpayer and must file a joint return if married. Rules disqualify the taxpayer from receiving a subsidy if he or she is eligible for minimum essential coverage through an employer-sponsored plan (unless the 9.5 percent threshold applies) or a government-sponsored plan, such as Medicare or Medicaid. What does this mean to the insurance marketplace? In theory, the exchange will allow Continued on page 8
October 2012
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RETAIL TECHNOLOGY NEWS
Smartphones signal change John Mayleben CPP, is MRA senior vice president technology and new product development and a national expert on electronic payment processing. He is the first person in Michigan and among the first in the nation to receive the Certified Payments Professional designation from the national Electronic Transactions Association. In the world of m e rc h a n t p ro cessing, as with many aspects of daily life, the only constant seems to be “change.” A n d t h e re a re several important changes coming in merchant processing. Some of these changes are available today, and some aren’t going to happen for a number of years – but it is prudent to understand what is coming so you can make decisions today that will save you money in the future. First, Apple has announced the new iPhone, and more people are carrying various smartphones. One of the things that a smartphone can do is operate like a credit card terminal. If you think you might want to use a smartphone as a terminal, as more retailers are doing, there are some issues you need to consider. One of the primary issues to address is, whose smartphone are you going to use? Your personal phone? A business phone? And what are your various employees, who aren’t owners, going to use? Your phone? Business phones? Their own phones? When you use a smartphone as a credit card terminal, you are, in essence, sending that credit card terminal home at night with yourself or an employee. Obviously, if this is your phone, you as the business owner still maintain control over the device. But what if you have five delivery people who have their own smartphones? Would you send your countertop merchant-processing terminal home with them at night? Or think of that
last question another way: would you send your cash drawer home with an employee at night? So, you need to look at your business and your own comfort level. If you make the business case for enabling various employees to use multiple smartphones, there are smartphone providers that can, at a very reasonable, fixed, monthly cost, provide you with a turnkey solution that includes the phone, a data plan, a mag stripe reader and a payment gateway. Your merchantprocessing provider should be able to facilitate setting these up for you. Another big change on the horizon is the introduction of “chip” cards. The U.S. is one of last places in the world where merchant processing systems don’t process transactions with a chip on the card instead of the mag stripe. Chip cards are harder to counterfeit or steal data from. Visa recently announced that it will be implementing changes to the card issuing process, and banks that issue cards will be encouraged to issue cards that have EMV chips on them. There has been a lot of misinformation in the marketplace about existing terminals. Cards issued after January 1, 2013, will, in most cases, have both an EMV chip and a mag stripe. Your current terminal will continue to process these cards. In 2015, if you have upgraded your terminal (or added the appropriate peripheral device) and can process a chip-only transaction, you will be able to shift some of the chargeback liability back to the card issuer. So, between now and then, if you have a terminal failure or need to upgrade for other reasons, you may want to consider requesting a terminal that will be able to support chip transactions.
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Michigan Retailer
www.retailers.com
Health care reform law: Q & A Ungrodt elected MRA board chair Continued from page 6
consumers to compare plans and make informed, knowledge-based decisions. They are also supposed to help control costs by mandating that all people must buy coverage. In reality, however, buying health insurance is not nearly as easy as renting a car or reserving a hotel room. At this time, exchanges have not figured out how to display something as complex as health insurance. Helping consumers compare and understand hundreds of different options with complex terminology and an alphabet soup of acronyms could prove very difficult in the online environment. In addition, to the extent people decide to opt out of the exchange and pay the penalty (tax), and then buy health insurance (with no underwriting, no waiting periods and no pre-existing condition exclusions) when they suffer a significant injury or are diagnosed with a serious illness, the exchanges could suffer from adverse selection and be left mostly with unhealthy citizens. That will lead to high premiums for those enrolled in an exchange. Your advocates We expect MRA members will continue to choose us to help them select their health insurance plan. We have distinguished ourself in the marketplace by providing first-class service and excellent health insurance plans. Regardless of whether you have a group or individual plan through us, our staff advocates on your
Continued from page 2
behalf and works with Blue Cross Blue Shield of Michigan to resolve claim and coverage issues for you. We save you incalculable hours of frustrating interaction with the insurance carrier. We are only able to provide this level of support and intervention because we are your agent of record, and because we know the plans inside-out. We are confident you won’t get this level of service and personal assistance anywhere else. Ultimately, we believe people recognize the complexity of purchasing health insurance and value the guidance and input that our licensed agents can provide. The consequences of making a poor health insurance decision can be grave, and having a team advocating on your behalf if coverage issues arise is an invaluable service. We hope you think so, too. Future of health care reform Although PPACA survived a major hurdle when the Supreme Court upheld it, changes may be made to the health care reform law in the future by the courts or by Congress. Legal challenges to the law’s validity are likely to continue. However, major legislative changes to the Patient Protection Affordable Care Act will likely require a significant shift in power in the legislative and executive branches of government and, thus, will depend most immediately on the outcome of the November 6 elections.
In addition, Bill Golden, co-president of Golden Shoes in downtown Traverse City, was named to the board of Michigan Retailers Services, Inc., joining Bo Brines of
co-owner of Mieras Family Shoes in Grand Rapids, was named vice chair. He joined the board in 2010. Policyholders elected Mark Miller, executive vice president of Hylant Group and president of its Ann Arbor office, to the board for a threeyear term. Hylant is among the largest privately held insurance brokerage firms in the United States and maintains strong international brokerage relationships. Hallan and Sarasin were both re-elected for three-year terms. Retiring from the board was John G o d f r e y, r e t i r e d owner of the former Godfrey Jewelers in Battle Creek and a On behalf of the Retailers Mutual board, Jim Hallan thanks former Battle Creek mayor. Dan Marshall for serving as chair the past two years. Godfrey had served Little Forks Outfitters in Midland on the board since it was established and Lisa McCalpine-Wittenmyer of in 2006, as well as on the board of Walgreens. Retailers Fund since 1985. The selfinsured Fund was the forerunner of Retailers Mutual Retailers Mutual. At the Retailers Mutual Annual Meeting and board meeting, both held on August 21 in Lansing, Peter Sobelton was elected chair for 2012-13. Jeff Joyce, vice president and
John Godfrey, retiring from the Retailers Mutual board after nearly three decades of service, receives tributes from Dan Marshall.
Barb Stein recognizes retiring MRA board member John Smythe for his years of dedicated service.
October 2012
9
IT’S THE LAW
RE: RETAILERS
Know legal limits when Birmingham PSD showing confronting shoplifters greater economic strength by William J. Hallan, MRA Vice President Government Affairs and General Counsel Shrinkage. Nothing causes retailers more stress than shrinkage. And the problem is growing. With current economic conditions and the ease of selling stolen merchandise online, retailers are struggling to maintain their inventory. What’s more is that the criminal has evolved. Juveniles and opportunistic amateurs are not the only ones stealing goods from retailers. Professional criminals are now stealing items – not for personal use, but to resell on the secondary market. To combat this problem, Michigan Retailers Association helped introduce legislation that would create new penalties for organized retail crime (see Page 1). While new tools for law enforcement are important, a retailer should know how to apprehend a suspected thief when the circumstances call for it. Legal privileges The law affords retailers certain privileges in order to protect their goods and merchandise. Retailers are permitted under the law to detain a suspected shoplifter if there is probable cause to believe that the person has stolen something. This privilege applies to the merchant, the merchant’s employees, and an independent contractor providing security for the merchant. Retailers should always keep the term “reasonable” in mind. Only reasonable force may be used to detain the individual, and the individual may
be detained only for a reasonable period of time (usually enough time for the police to show up). Keep in mind that retailers do not have an absolute privilege to detain a suspected shoplifter. In other words, a plaintiff could bring an action against a retailer for false imprisonment or defamation. However, the plaintiff would have the burden to show that the storeowner acted with unreasonable force, the detention lasted for an unreasonable amount of time, or that the storeowner lacked probable cause to detain the suspect . Safety first With retail crime increasing, there are several tips to keep in mind. Storeowners should tell their employees that safety always comes first. For instance, don’t chase a shoplifter who has left the premises or don’t confront a suspect if you think he or she has a weapon. Call the police and provide a detailed description. Also, employees should be trained on proper protocol when confronting a shoplifter, such as asking the suspect to accompany the store manager to a private area to answer a few questions. Many of these types of tips are discussed in MRA’s popular publication “How to Prevent Shoplifting and Employee Theft,” a copy of which is free to our members. (The publication will be updated to include a discussion of organized retail crime after the legislation is enacted.) In the end, shrinkage isn’t going away, but knowing how to properly apprehend a shoplifter may help limit its impact.
Membership Services Corner Quick notes on key services. Call 800.366.3699 for details. Credit Card Processing • You can now process credit card transactions with your iPhone or Android smartphone. Please call for details. • Credit card processing supplies can be ordered online at www.retailers. com or by calling 800.563.5981, option 3. • 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.
• Pin-based debit transactions cannot be voided. • Credit card fraud is on the rise. Call to verify any suspicious email, phone or Internet orders you receive. • Annual compliance with PCI Data Security Standards is mandatory! So is documentation of compliance. Please visit www.compliance101.com to guide you through the steps. • These terminals are no longer PCI compliant: Zon Jr, Tranz, Omni and Hypercom T7P. Social Media • MRA has begun holding contests on
Downtown Birmingham is demonstrating new economic strength, with a significantly higher occupancy rate 10 years after longtime retail anchor Jacobson’s closed in 2002, according to an October story by the Observer and Eccentric newspapers. John Heiney, manager of the Birmingham Principal Shopping District, told the newspaper that the occupancy rate stands at 96.3 percent, up from 91 percent when Jacobson’s closed. He said 40 new shops and eateries opened between September 2011 and mid-August 2012 or were announced to open yet this year. The newspaper credited “a concerted move toward creating a better mix with retail, eateries, residential, entertainment venues and office space for financial, banking, legal, advertising and marketing professionals” for helping “reignite” the downtown. Grand Rapids-based Meijer, Inc. was the only Michigan-based retailer on the 2012 list of the nation’s top 100 retailers, coming in at number 27. That’s according to the National Retail Federation, which compiled the rankings. Meijer, which is privately held and doesn’t disclose sales figures, had sales estimated at $16.6 billion in 2011, up 7.1 percent from the previous year, in its 197 stores. Patrick Heller of Liberty Coin Service in Lansing received the 2012 Harry J. Forman Dealer of the Year Award from the American Numismatic Association. The award was presented at the World’s Fair of Money kick-off event at the National Constitution Center in Philadelphia. The award is presented annually to an ANA-member dealer who shows uncommon dedication to strengthening the hobby and the Association. It’s named for the late Harry J. Forman, a Philadelphia coin dealer and author. Heller opened his business in 1982, growing it from a three-person staff to 22 employees today. Facebook. To enter for a chance to win a prize, all you do is “Like” Michigan Retailers and fill out the entry form. The prize for the first contest, which ended September 30, was $100 for a mini shopping spree. The contest ending October 31 offers a free membership or membership renewal (up to $130 value) in MRA. Check out www.facebook.com/MichiganRetailers for the latest contest.
This year is shaping up to be a strong one for Michigan’s tourism industry. The statewide average hotel occupancy rate for 2012 was at 56 percent as of July, the highest figure for the period since Travel Michigan began tracking the data in 2004. “We are continuing to see increased hotel occupancy rates and recordsetting tourism spending here in the state, helping to support local businesses and nearly 200,000 jobs in local communities across Michigan,” said George Zimmermann, vice president of Travel Michigan, part of the Michigan Economic Development Corporation. Expansion continues to be a major theme of Gardner-White Furniture Co. as it marks its 100th anniversary. Its recent move to open locations inside Best Buy stores in Bloomfield Township and Novi follows activity to open a new distribution center, 90,000-square-foot store and outlet, and corporate offices in Auburn Hills, shifting headquarters from Warren. The store and outlet become the Michigan chain’s largest showroom. The first Gardner-White opened in 1912 on Mack Street near Mount Elliot in Detroit. In the late 1950s, the company was purchased by Irwin Kahn, whose family still owns and operates the business. The company was an original member and incorporator of Michigan Retailers Association. Art Van Furniture Inc., Warren, expected to open its first store outside Michigan next year, on a site that served as a movie theater complex near Toledo, Ohio. The store is part of a larger plan to expand outside the state with company-owned furniture and mattress stores within a 250-mile radius of its Warren warehouse, Crain’s Detroit Business reported earlier this year. Expansion for the company also includes franchising top furniture retailers in nearly two dozen smaller markets in Michigan. • For the latest breaking news in retail, business and retail-related legislation, follow MRA on Twitter: www. twitter.com/michretail. • We want to keep in contact with you via social media in order to know what’s happening at our member businesses. Let us know if your business is on Facebook or Twitter by contacting Laura Schilling at lschilling@retailers.com.
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Michigan Retailer
www.retailers.com
LOTTERY
Michigan receives awards at world’s lottery summit by M. Scott Bowen, Commissioner
The Michigan Lottery’s $100,000 Cashword instant ticket is popular with more than just Lottery players. Our $3 ticket was selected as the North American Association of State and Provincial Lotteries’ Best New Instant Game in North America. The award was announced at a ceremony during the World Lottery Association’s 2012 summit in Montreal. In addition, the Michigan Lottery’s television show Make Me Rich! took the North American association’s award for Best Promotion. With the everyday hard work of Lottery retailers, together we have achieved tremendous success; we make a great team! The Cashword ticket, which launched January 31 and is still on sale, features an interactive component and extended play through the Lottery’s website, www.michiganlottery.com, or a smartphone app. The WebPlay™ program features a custom app developed by Pollard Banknote Ltd., the Lottery’s instant ticket printing company. There were one million Cashword interactive games played in the first sixth months of the program, according to Lottery Chief Deputy Commissioner and Commissioner of Marketing Tom Weber, who went on to share that he felt the interactive program has been a huge success. Interactive The interactive component has also spurred sales. The WebPlay™ program was responsible for a 52 percent increase in average weekly sales
of the Cashword family of games, from $2.3 million to $3.5 million. Of course, this equates to more commissions for you! $100,000 Cashword is the Lottery’s second Best Instant Ticket award. The first, for the Lucky Dog ticket, was won in 2006. Make Me Rich!, the Lottery’s television show that was hosted by former Brady Bunch star Christopher Knight, featured various second chance drawing giveaways conducted before a live studio audience. Make Me Rich! aired in eight episodes between October 2009 and January 2012 and featured 96 contestants who won over $27 million in cash prizes, two cars, one motorcycle and $1,300 worth of Lottery tickets. The Lottery also awarded a total of $40,000 to television viewers who participated in a “text to win” component of the show. Thank you, retailers, for your crucial role in our success and honors. We are proud to have you as our partners! Instants No new tickets are being released in November. Also, November 5 is the expiration date for IG 427 Cash @ Go™ ($1), IG 429 Bingo Bolt™ ($2), IG 431 Bag O’Cashword™ ($2) and IG 441 Lucky Millions™ ($10). Retailers are reminded to always activate instant game tickets before putting them on sale, to ensure players can redeem winning tickets. In fiscal year 2012, the Lottery’s contribution to schools was approximately $770 million. Since its inception in 1972, the Lottery has contributed more than $17 billion to education in Michigan. For additional information, please visit the Lotter y’s website at www. michiganlottery.com.
(From left) Michigan Lottery Commissioner M. Scott Bowen, Michigan Lottery Public Relations Director Andi Brancato, Ontario Lottery and Gaming Vice President of Lottery Marketing and Sales Wendy Montgomery, and Michigan Lottery Deputy Commissioner of Marketing and Chief Deputy Commissioner Tom Weber.
October 2012
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NEW MEMBERS & NEW MEMBER SPOTLIGHT Ada Attic, Ada Allegan Rentals Inc., Allegan University Living, Ann Arbor Idle Hour Restaurant & Lounge Inc., Battle Creek Costume Wear House Inc., Bay City Big Bay Depot, Big Bay ArtVentures Inc., Brighton Morehouse Industries, Charlotte Mid Michigan Family Eye Care, Clare KH Home, Clarkston Mega Wall Corporation, Comstock Park Eagle Inn, Eagle Great Lakes Photography LLC, Grand Rapids Stepping Stones Montessori School, Grand Rapids Meekhof Lumber Company Inc., Grand Rapids Kid’s Food Basket, Grand Rapids Apogee Therapy Center, Grandville Straight Line Sheet Metal LLC, Grant Baumann & Degroot, Holland Grow It Again Hydroponics LLC, Holland Sebright Products Inc., Hopkins RSS Security LLC Signal 88 Sec of Ann Arbor, Howell Key Largo Lounge, Jackson Jackson Downtown Development Authority, Jackson Texas Corners Animal Hospital, Kalamazoo Fraternal Order of Police, Kalamazoo Spa on the Lake, Lake Orion City Salon, Lansing Business & Community Institute LLC, Lansing Cassie’s Confections, Lansing Knife Country USA, Linden Retirement Living Management, Lowell The Beauty Stop LLC, Marlette Schneider Tire Outlet Inc., Marne Marshall Historical Society Inc., Marshall Mason Area Chamber of Commerce, Mason Todd Bills & Son, Mio Stony Lake Cutlery LLC, New Era Newaygo Veterinary Services PC, Newaygo Sign-A-Rama Lansing East, Okemos Maurer Heating & Cooling, Owosso Plymouth Restaurant Inc. dba Denny’s, Plymouth American Legion Post 443, Sanford Southeast Michigan Census Council Inc., Southfield All That Glass, Southgate Ascend Computer Technology, Sturgis
Exceptional guest experience the hallmark of historic inn by Jean B. Eggemeyer
Sandy and Matt Werner “fell in love” with bed and breakfast inns after they were married in one in 1988. Since that time, they’ve celebrated anniversaries and other special occasions at small inns, enjoying the
rely on the Michigan Retailers Association for expert bankcard processing. “The Warners recommended we stay with MRA once we bought the Inn,” said Sandy Werner. “We were approached by other processors but we
The Werners expect to take advantage of other MRA services, such as insurance lines, when they take over day-to-day management of the Inn. The Inn, located at 760 Sixth S t r e e t , P e n t w a t e r, a n d w w w.
Sandy and Matt Werner are now owners of the historic Hexagon House in Pentwater.
warmth, comfort and unique ambiance they provide. A little more than a year ago, they decided to turn their passion for inns into a new career and purchased the historic Hexagon House, a Pentwater landmark. The stately two-story, six-sided former boarding house was built in 1870 by Sylvester E. Russell to house visiting lumbermen. In the mid-1990s, former owners Jan and Kurt Warners transformed what was then a rundown property into the picture perfect inn it is today. It now features five suites, each with a private bath; more than 4,000 square feet of wrap-around porches; and a beautifully restored, Victorian-styled interior. Currently, innkeepers Amy and Tom Hamel run the Hexagon House Inn, but the Werners plan to take over in 2013 after they make career transitions and see their youngest child through high school. The inn’s hexagon shape and interesting interior angles make it unique, but Sandy Werner said it’s the entire experience of staying there that makes it special. “Pentwater is still a small, quaint town,” she explained. “Guests can have a very quiet time at the House, enjoy the property and then grab a bike or their tennis shoes and go into town for a nice dinner or to relax at Lake Michigan or Pentwater Lake. “We have a lot of repeat guests who come every year to rejuvenate and enjoy the Hexagon House.” As new owners, the Werners have made some small improvements to enhance the guest experience, such as adding cable tv and an outdoor fire pit. To keep the business side of things in tip-top shape, the Werners
get really good customer service and support from MRA. “It’s really important to us that we have zero problems processing our guests’ credit cards, and MRA provides that level of service.”
hexagonhouse.com, is open from Mid-March to December. Jean B. Eggemeyer is a freelance writer based in Illinois and a former employee of Michigan Retailers Association.
Protecting your health. Today. You plan every detail of your business in order to ensure its success. Nothing is left to chance. Don’t take chances with your health insurance. You and your staff deserve a quality Blue Cross Blue Shield of Michigan health plan. • Group Plans • Individual Plans • Recognized worldwide • Solutions tailored to your needs Learn more about the affordable BCBSM plans available from the MRA-endorsed health insurance agency, Member Insurance Solutions. Call 800.878.6765 or visit memberinsurancesolutions.com today. Protecting tomorrows. Today.
Member Insurance Solutions is a marketing name of MDA Insurance & Financial Group