June 10, 2011

Dear NJGCA Member:

Here's what you'll find in this edition of the NJGCA Road Warrior, and thank you for reading:

EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS!
•Credit Card Swipe Fees, Predatory Towing, Margins & Lottery Log

NEWS AROUND THE STATE
•NJGCA in the News: Risalvato says online lottery ticket sales will hurt convenience stores
•Governor releases details on public-private education partnership proposal
•Assembly speaker holds up pension, benefit compromise reform deal
•NJGCA in the News: Sal speaks out on drivers putting off needed repairs

MEMBER BENEFIT PARTNER MESSAGE
•TMP: Residential Energy Solutions now AVAILABLE!! 

REAL ESTATE FOR SALE OR LEASE
•Interested in acquiring or leasing a property?  See below!

A SPECIAL MESSAGE FROM BELLOMO FUELS
•Serving New Jersey since 1910 -- Over 100 years of supplying gasoline retailers like YOU!

TRAINING CLASS SCHEDULE
•Interested in a class?! See Below!

POLITICAL PARTICIPATON: THE NJGCA PAC
•Participate in the NJGCA PAC today and help us keep our Agenda rolling in Trenton!

THE MEMBER TOOL BOX
•On the NJGCA Homepage
•Know your Territory Manager!

 EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS! 

CREDIT CARD SWIPE FEES, PREDATORY TOWING, MARGINS & LOTTERY LOG

How much is too much?  I often ask myself this question.  No, I’m not talking about sleep, piling ribs on my plate, a good bottle of cabernet, or even my famous rants.  I’m talking about profits!

As a former small business owner, I don’t begrudge anyone making an honest profit.  Profits are what keep your bills paid, your workers employed, your lights on and your mortgage paid.  In short, you can’t do very much of anything without turning a profit and keeping your costs in check (well…unless you are the government).  Put more simply, profit is such an essential element that without it, the entrepreneurial spirit would wither and fade away.  Yet have you ever asked how much is too much? 

That’s an often debated question and everyone will have an opinion on how much is too much.  But when it comes to the profits credit card companies generate through their transaction fees, I’d be hard pressed to find even a handful of retailers with kind words for the current regime. 

You personally know the burden of credit card transaction fees.  They eat your profits, increase your patrons’ costs, and are difficult to deal with.  Thankfully this is about to change.  Last summer, Congress passed the Dodd-Frank Act, which sought (in part) to overhaul the nation’s financial markets.  Part of those reforms was to charge the Federal Reserve with regulating credit card interchange fees.  The exactly language of the bill states that these fees are to be "reasonable and proportional" to the costs borne by financial institutions.  The bill was to go into effect this summer. 

However, powerful forces are at work in Washington, and many in the Senate were keen on delaying the implementation of the act until a study could be conducted on how these changes would affect small banks.  I don’t have anything against smaller, community banks, and I don’t wish them any harm, but implementing any reforms that could save you money each time a card is swiped isn’t merely necessary, it’s essential!  Thankfully the U. S. Senate defeated an amendment aimed at implementing this delay earlier this week, clearing the way for that important provision of the Dodd-Frank Act to be implemented. 

So what will this do?  It would essentially enact a plan unveiled in December by the Fed to limit credit card swipe fees to 12¢ per transaction.  While that may sound like a lot, consider that a survey of banks conducted by the Fed has found the average interchange fee is roughly 4¢ per transaction and that the current cost to retailers is approximately 44¢ per transaction. 

You didn’t misread that – THE CURRENT AVERAGE FEE IS GENERATING A PROFIT 1000 TIMES ABOVE THEIR COSTS!  With the federal government limiting this to 12¢ a transaction, these financial institutions will still be making a 300% profit above the rate, which translates to a 70% cut from the current 44¢ per transaction average.

Did that get your attention?  It should! 

This is an issue that we have been fighting for quite some time.  In fact, you may recall when I mentioned our participation in the Merchants Payments Coalition (MPC) all the way back in the April 11, 2008 of the Road Warrior.   NJGCA is a member of the MPC, and through the online website www.UnfairCreditCardFees.com which promotes the organization, a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses banned together to fight against unfair credit card fees.  This was a fight that needed to be fought to create a more fair and open credit card system that keeps the rights of consumers and business owners in mind.

If you’d like to read more on this recent news from Washington, click HERE to read more.

A few years back you’ll recall that NJGCA, the Garden State Towmans’ Association, and related groups banned together to fight a proposal which would essentially regulate New Jersey’s towing industry.  The spark that exploded the powder-keg was due to a few, dishonest RECTUMS (I’m being nice here) who used predatory towing practices to extort excessive fees from two young girls who had their car towed.  These youngsters had met at a diner in Westwood, parked their car, and then drove to a movie together in one vehicle, leaving the other vehicle behind.  The car was towed by a predatory tower while they were at the movies and the owner had to pay a huge, disproportionate fee to get the car back.  Thanks to these idiotic RECTUMS, a huge uproar was erupted in Bergen County and prompted a response in Trenton.

The result was a series of negotiations that ended with a bill we hated being passed, but another bill amending some of the more egregious elements being passed immediately after to soften the blow to the towing industry.  It wasn’t the best result in the end, but it was the best we could have hoped for under the circumstances created by a group of cheating, lying RECTUMS who gave an entire industry a bad name. 

Fast forward a few years and we have learned that the battle continues – but this time only the dishonest are being targeted.  Mostly recently an outfit from Irvington was using ‘spotters’ to watch for motorists parking their vehicles, then called a tow truck in to remove their cars and charge them to get their vehicle back.  Attorney General Paula Dow and the state Division of Consumer Affairs are cracking down on these guys – and I applaud them.  I’ve consistently said, from the first time this issue erupted through today, that anyone who is behaving dishonestly and harming the public has to get slapped and more!  Why?  Because when bad small business owners in our industry get splashed in the headlines, it reflects badly on YOU and EVERYONE in this business!!

You can read more about this by clicking HERE and HERE

As we stated last week, prices are starting to drop, permitting you to grab a little more profit.  If you are managing your establishment properly, this should create a much needed opportunity to fatten your margins and make up for the losses you’ve been enduring up to this point.  That means that you shouldn’t be in a rush to drop your street price. The landscape will get super-competitive soon enough, but until then you should be riding this wave for as long as you can since the lean-times will undoubtedly return.

Last week I also outlined the recent progress the Internet Lottery Bill has made in Trenton and made a appeal for your help.  If this bill is enacted into law it will undoubtedly harm stations and convenience stores that depend on regular lottery players to purchase higher-profit items like milk, eggs or coffee. 

Since the state is in dire need of revenue – and in light of the Supreme Courts order to spend an additional $500 million on urban education – this bill may very well be signed into law. 

The only chance we have to stop this from moving forward is to offer proof and concrete examples of how badly this will hurt you!  I NEED YOUR HELP!  I’ve asked you to go to the NJGCA website, download a form, fill it out and return it to us to help give us proof that your lottery purchasing customers also buy profitable items like milk, bread, and coffee.  WE STILL NEED THIS INFORMATION.

If you haven’t done so already, please click HERE to print the form and keep it at your register.  Even if you do it for only two weeks and get it back to me, you will be helping us to help you.

Please participate and help us protect your small business.  Keeping a log isn’t difficult and can make a huge difference in convincing Legislators that this proposal is bad for business!

Thanks for listening - See you next week!

Regards,
Sal Risalvato
Executive Director

NEWS AROUND THE STATE

6/9/2011:
NJGCA in the News: Risalvato says online lottery ticket sales will hurt convenience stores
Sal was recently quoted in USA Today regarding how the sale of lottery tickets over the internet would be damaging to convenience store owners.  Lawmakers are exploring such a move in an attempt to increase revenues and fill a significant budget shortfall.  Sal said that small business owners fear the loss of additional sales in such a move since most lottery ticket customers also purchase other items.  Click above to read more.

6/9/2011:
Governor releases details on public-private education partnership proposal
In an attempt to improve the quality of education at five chronically underperforming schools, Governor unveiled a proposal this week which would permit private companies to run these institutions through a public-private partnership.  Supporters applaud the move as innovative and believe that it will help students in failing public school districts have an opportunity for a quality education.  The move is being criticized by the state’s largest teachers union, the NJEA, who fear that the plan would reduce accountability and drain resources away from public schools.  Click above to read the full article.

6/9/2011:
Assembly speaker holds up pension, benefit compromise reform deal
Earlier this week, Governor Christie and Senate President Stephen Sweeney were set to announce a plan to overhaul New Jersey’s public employee health and pension benefit system.  However, the agreement is on hold due to opposition from Assembly Speaker Sheila Oliver, who says that she won’t post the bill without more support from members of her caucus.  Though the state’s pension and retiree medical benefits system is severely under-funded, but labor advocates say any alternations should come at the bargaining table and not through legislation. 

6/8/2011:
NJGCA in the News: Sal speaks out on drivers putting off needed repairs
Executive Director Sal Risalvato recently spoke with the Courier-Post regarding the drop in the number of inspections being performed.  Sal attributes this to the fact that many motorists are unaware that Emissions Inspections are still required and that Safety Inspections were eliminated in August of last year.  State officials confirm that the number of inspections being done at state-run facilities has also dropped.  Sal also stated that many drivers are forgoing Safety related repairs since they are no longer necessary to pass Emissions inspection. Click above to read more.

CLICK HERE TO READ MORE ARTICLES IN OUR “NEWS AROUND THE STATE” ARCHIVE 

MEMBER BENEFIT PARTNER MESSAGE: 
TMP Energy Solutions Goes Residential!

NJGCA recently introduced you to a major solution to your energy bill for your business.  Through deregulation, you are given the option to choose your energy supplier. No longer are you locked into getting your electricity from one of New Jersey’s major energy distributors.

TMP Energy Solutions may help your business achieve cost reduction due to the deregulation of electricity generation. We have seen dramatic savings by several members who have taken advantage of this program for their businesses. Now TMP Energy Solutions has gone a step further in offering NJGCA members’ savings on their residential electric rates. Yes, that’s right. You may be able to save on your home’s electric bills too!

Here is what you need to do to verify your residential savings and to signup for TMP’s offering.
1. Have at least one of your latest electricity bills. Two would be great.
2. Call me at 973-376-0066.
3. I will do an online analysis of your bill to verify your savings.
4. If you agree to the Residential offering, we will work with you to complete the application.

TMP Energy has provided a residential energy supplier, Champion Energy, to offer NJGCA members the option to purchase their electricity for their home. The term of the Residential Agreement contract is for 12 months at the electric rate on the day your contract is signed. If you decide to end the contract, there is an early termination fee of $10 per month remaining in the contract.

NJGCA now provides you another way to save on your bottom line.  Additionally, any residuals dollars NJGCA receives from TMP Energy Solutions will go towards the NJGCA Scholarship Fund. You save and NJGCA funds the scholarship program for member children going onto institutions of higher learning. Let’s hear from you.

Oh, and don’t forget. If you are also interested in saving on your electric and natural gas bills for your business, all you need do is send copies of your last 3 energy bills to me by mail or fax. I’ll do the rest and let you know what your savings might be.
You have so much to gain and nothing to lose.

-Phil Apruzzi, Director of Membership
66 Morris Ave.
Springfield, NJ 07081
Phone: 973-376-0066
Fax: 973-3760766