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March 1, 2013 Here is what you will find in this edition:
JOIN NJGCA ON FACEBOOK -- CLICK HERE EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS!
CREDIT CARD SETTLEMENT WARNING & UPDATE
DO NOT SIGN ANYTHING! MOTOR FUELS LICENSE RENEWALS DUE The credit card surcharge issue that has been making news in the media and the halls of government is back on the front burner this week. NJGCA did an in depth look at this situation in the February 8th edition of the Road Warrior, but the commotion isn’t over – not by a longer shot. In that installment, you’ll recall we discussed how the press was reporting that there was a 4% credit card ‘surcharge’ that retailers would be springing on their customers. Though inaccurately portrayed, there was a nugget of truth in there: Retailers would be permitted to pass along a surcharge as a way to recover past, excessive credit card fees imposed by Visa and MasterCard (V/MC). The bargain permitting the surcharge levy comes by way of a class action law suit settlement between V/MC and the plaintiff-retailers. As we reported on the 8th, the original lawsuit began in 2005 and has been ongoing ever since. The claim was a reaction to V/MC’s own internal policies, which prevented merchants from recovering those fees and their excessive nature. What became ultimately apparent was that business owners were being squeezed between the internal corporate policies at V/MC and their own customers. With no relief to the situation, several retailers then banded together and filed a class action lawsuit. However, rather than forcing some kind of structural accord in which fees and rates would be adjusted, the settlement focused on recouping past losses. The fine print in the proposed deal states that retailers can recover losses sustained from January 1, 2004 onward. Class action participants have until May 28, 2013 to either join the suit or object to the settlement in writing. The final settlement agreement has to be approved by a U.S. District Court Judge, which will be decided at a ‘fairness hearing’ in September. You can learn more details about the settlement structure by CLICKING HERE. Even before the wheels were in motion, however, legislators around the country were moving to stop merchants from passing along these fees to their customers. We already knew that Trenton was acting to block this from being implemented in New Jersey. In fact, the Legislature was reacting so fast to this situation that the bills introduced were moving through the legislative process at lightening speed. So, even if you wanted to implement it, the shelf-life would be very short. Since we covered this issue a few weeks ago, Team NJGCA has done a bit more digging on the topic. It seems that just about everyone and their mother (and perhaps even their father) has been contacted by the class action’s ring-leaders (i.e. the lawyers) asking them to participate in the settlement. Perhaps you have been contacted as well and received a white, 28-page pamphlet notifying you about the bargain? If you did, it is my strongest and most vocal recommendation that you DO NOT SIGN ANYTHING, DO NOT AGREE TO ANYTHING, and DO NOT FILE A SETTLEMENT CLAIM! I know it is tempting to reach out for some easy cash in these tough times and that the lawyers have been making a full court press to get you (and other retailers) onboard. In fact, NJGCA was contacted about this six months ago, as firms began soliciting us to help Members individually get their piece of the settlement’s $7.3 billion fund. Their goal is to represent you, help you get your cut, and then get their own piece of the action in payment. A number of folks I spoke with even offered to give the Association a little taste on the backend in return for our cooperation – but I’ll have no part of it. In my mind, these funds are as tainted as blood money, used to compel obedience and acceptance -- and it’s wrong! This settlement is nothing more than a poorly placed, under-sized band-aide on a festering wound of a problem. This issue just isn’t going away. High credit card transaction fees have become an anchor around the necks of merchants and retailers around the nation. It’s partially for that reason (and partially because it’s simply unethical) that NJGCA joined the Merchants Payments Coalition in 2008 to fight against these fees in Washington. To put it bluntly, an agreement like this helps no one but the lawyers. And make no mistake about it; the lawyers are the only ones who are making out in this arrangement. In fact, out of the $7.3 billion settlement spread out between two funds, the lawyers stand to grab 11.5% of the total take. Assuming the judge approves the settlement details (including the lawyers’ fees), that works out to nearly $840 million. Yet that’s the nature of class action suits and the initial plaintiff-retailers should have realized that before they spent over 7 years and millions of dollars pursuing this case. So what about the merchants? Will they see their transaction fees permanently reduced? Will we see some sanity brought to interchange fees? Can we depend on this never happening again? The answer to all those questions is a resounding “NO”, which is why the only thing we can depend on is that this problem will be re-litigated in the future. I’m not happy with this settlement and you shouldn’t be either. You are getting bent over backward and forward for the transaction fees you pay. In the world of credit card processing, V/MC literally holds all the cards. You don’t like their fees? Tough. You want to negotiate? Too bad. You want to try another outfit? Well, there are virtually no other players in town. Visa and Mastercard are almost the same as cash today. You don’t have a choice…you must accept them or lose customers. Will the settlement help you with any of these problems? Nope. Not even a little. This is why you SHOULD NOT participate in the settlement in any way. The settlement treats the symptoms, not the disease. It’ll alleviate some of your pain today, yes, but the wound is still festering to bring you to your knees tomorrow. This is why it’s the perfect arrangement for V/MC. They take a little hit on their bottom line – which they will easily recover in a short time – and the mechanism that allows them to maintain their monopoly stays in place. If you were in their shoes, you’d be doing cartwheels all the way to the bank. Taking this a step further, in reaching this settlement, the kind folks at V/MC are acting like they did you a favor by permitting you to add these surcharges to a sale. However, we know that if it were actually implemented your customers will leave you in droves. Yet for all the headlines, PR-spin, and emotional speeches by legislators, one aspect has been essentially lost in the noise: In today’s digital age, credit is more popular than cash and this problem will only grow as more people embrace electronic payments. Doesn’t that logically mean that it’s only a matter of time before we’re back in the very same fight? Still need another reason NOT to jump on the band wagon? If one day there is a legitimate settlement, but you’ve already settled with them under this agreement, you may have lost your opportunity to benefit from real relief. When that day comes, I'll advise you to grab whatever piece of the pie you can, but today is not that day. NJGCA’s larger goal in this battle is to make sure that your ability to give cash discounts to your customers is preserved. It is that motivation that led us to Trenton last month to testify on your behalf. We’ve reported that this was moving at lightning speed, but it did hit a speed bump last week. I still strongly believe that a bill will pass and be on the Governor's desk soon. You and I know that your cash customers are actually subsidizing your credit-card patrons. Years ago, when the majority of your customers were paying with cash, this wasn’t a problem and you absorbed a marginal loss. Back then, gasoline was cheaper, so a $20 would give you almost a full tank of gas and most had that much cash on hand. Today, gas is nearly twice as much and the opposite is true. Yet, thanks to the combined efforts of our allies at FMANJ, NJ Food Council, and the NJ Retail Merchants Association, we are confident that the ultimate law will include an exemption for cash/credit pricing. They were scrapping and clawing right along side of us, and I cannot thank our friends enough for their hard work in this. Nevertheless, even though we may ultimately win this battle to keep cash/credit pricing, it doesn’t mean that the war is over. We must use this opportunity to actual make lemonade from the lemons we’ve been handed. We can do that by further educating legislators and regulators about the real underlying problem: The crushingly obscene amount of fees you have to pay so your customers can have the convenience of paying you with a credit card. Though I can’t really get into it at the moment, there are some things cooking on the backburner which may ultimately have a positive impact on this predicament. We may have more to report next week, but its sufficient to say that the coalition isn’t resting on our laurels. Remember: DO NOT SIGN ANYTHING, AGREE TO ANYTHING OR FILE A CLAIM. If you are really that tempted, call me and I’ll talk you off the ledge! An additional reminder: As we’ve stated recently, Motor Fuel Licenses may be expiring on March 31st and must be renewed. The NJ Division of Taxation sent out a renewal letter to all current licensees who expire in 2013 last December. The letter advised licensees to go to the NJ State Treasurer website, print out and complete the MFA-1 form, and return it with your $150.00 license fee payment. All renewed licenses are good for 3 years. You visit the Treasury’s Motor Fuel Tax Form page by CLICKING HERE or download the MFA-1 form directly by CLICKING HERE. If you have any questions, please contact Debbie Hill at debbie@njgca.org or at 973-376-0066. Thanks for reading – See you next week! Regards,
Sal Risalvato
BUSINESS FOR SALE! If you'd like to list your business for sale, publish a location you're selling, or are seeking a business partner for your establishment, please contact NJGCA at 973-376-0066!
CLASSIFIEDS: FOR SALE & HELP WANTED! After running an ad in the Road Warrior over the last month, NJGCA was able to assist a member in selling his equipment! If you'd like to list equipment for sale, or have an open position you'd like to make other industry professionals aware of, please contact NJGCA at 973-376-0066 and let us help you get the word out!
NEWS AROUND THE STATE: THE NEWS YOU SHOULD KNOW
02/28/2013:
Businesses affected by Sandy will get disaster aid deadline extension Governor Christie has announced that there will be an extension for businesses applying for disaster aid. Those businesses in need of federal disaster aid can now apply by April 1 and may apply online at https://disasterloan.sba.gov/ela 02/28/2013: Garden State home sales rebounding New information released by the federal Department of Commerce illustrates that home sales may be returning to pre-2008 levels. In New Jersey, the sale of single-family homes rose by 21-pecent in 2012. The data suggests that the economy may be improving as the number of available homes on the market has also dropped from this time last year. Click above to read more details. 02/28/2013: Federal sequestration unlikely to have immediate impact in NJ As Congress and the White House spar over a budget, the impending sequestration funding cuts are not likely to affect most New Jerseyans. Most federal officials believe that any cuts will not affect residents in the short term or long term, though some jobs tied to federal funds may be furloughed. Click above to read the full article. 02/26/2013: Governor introduces budget for 2013/2014 On Tuesday, Governor Christie presented a budget to the Legislature for the 2013/2014 fiscal year during the annual budget address. The proposal calls for a $32.9 billion budget, an increase of $1.2 billion increase over last year, without raising taxes. It is the first time in three years that the budget has been increased, which includes a $1.68 billion payment to the state's public pension system - the largest in state history. Click above to read more on the Governor’s budget plan.
TRAINING CLASSES!! PLEASE NOTE: FUTURE DATES WILL BE ADDED UPON REQUEST AND ACCORDING TO DEMAND. CONTACT DEBBIE at 973-376-0066 or DEBBIE@NJGCA.ORG TO LET HER KNOW YOU ARE INTERESTED IN TAKING A SPECIFIC CLASS. THIS WILL ALLOW US TO GAUGE YOUR NEEDS AND KEEP TRACK OF THOSE WISHING TO PARTICIPATE!!
MEMBER BENEFIT PARTNER MESSAGE
TMP Energy Solutions We have had a number of NJGCA members successfully reduce their rate per kWh signing up through our energy saving program. We know it’s difficult to collect 12 months worth of previous electric bills to get an “accurate” analysis when comparing a variable rate to a fixed rate, but we now have another option available. This new solution is a power purchase option; the other program is still in full force and has saved members thousands of dollars. If you sign up for the power purchase option, you will be grouped with other NJGCA members until the minimum KW demand is acquired. By pooling the member’s usage together, you will be able to take advantage, as large energy users do, and receive a lower kWh rate. Each member will receive their own contract. Each member is responsible to sign and return the agreement the day it is received in order to secure the price for their group. Please do your due diligence, so when you receive the proposal and the agreement you will be able to make an intelligent decision. If by chance, you still want us to assess you bills, to give you a price to compare, we will require12 months of your most recent utility bills. There are no bills required, but we would still like to have one bill per meter on file to check account #’s, meter #’s service addresses and other pertinent information incase there is a problem. The term of the agreement is for 12 months. During this term period, you will have price protection against any energy price increases along with a low fixed kWh rate. If you are interested in becoming part of this power purchase option, please contact Greg Cannon at the NJGCA. Remember when you sign up your energy through the NJGCA Energy Program, TMP makes a considerable donation to the NJGCA Scholarship Fund through their proceeds. This has no affect on your rate, and costs you nothing out of pocket. We hope to help hundreds of NJGCA members reduce their utility costs by participating in this and our other cost reduction programs. Our purpose, in the endeavor, is to help NJGCA members lower their energy costs while supporting the NJGCA Scholarship Fund. Contact GREG CANNON at 973-376-0066 or email Greg at greg@njgca.org. Mention that you are interested in saving money on your energy bills. NJGCA & TMP Energy Solutions will handle all the rest.
POLITICAL PARTICIPATON: THE NJGCA PAC
Promoting our agenda in Trenton is of utmost importance to NJGCA and our members.
To truly understand the importance of supporting our allies, consider our successes in Trenton:
We defeated BELOW COST SELLING We made history in getting FIRST RIGHT OF REFUSAL signed into law! We have built large support for RIGHT TO REPAIR and got it passed out of the Assembly We defended your small business against the false accusations of Attorney General Anne Milgram We gained wide support to move New Jersey to an all PIF Inspection System and close the CIF lanes ...and MUCH MORE!! In each instance, we achieved these goals with the help of our friends in the Legislature! If every member contributes just $100.00 we will be able to provide the help necessary to ensure victory for our allies.
PLEASE SEND YOUR CONTRIBUTIONS TO: I understand that times are tough for all NJGCA members, but this is just as important as any battle we have fought in the past. We have made great progress in Trenton. I hope that you will answer the call.
THE MEMBER TOOL BOX
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