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POLICY
ECONOMY
ON THE LOCAL FRONT
RETAIL THEFT & PUBLIC SAFETY
TRENDS
SAFETY
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American families have long faced a significant financial burden due to “swipe” fees imposed by banks to process credit card transactions. According to the Merchant Payments Coalition (MPC), these fees will cost the average family between $20 and $30 annually. With swipe fees averaging 2.24% of transactions and occasionally reaching upwards of 4%, they represent a considerable operating cost for merchants, surpassed only by labor expenses.
The Credit Card Competition Act (CCCA) (H.R. 3881, S. 1838) has emerged as a potential solution to this problem. Spearheaded by a bipartisan group of lawmakers led by Senator Dick Durbin (D-Ill.), the CCCA seeks to introduce competition into the swipe fee market. Under the current system, the fees are set by card processors, such as Visa and Mastercard, with merchants having no say in the matter due to these networks’ dominance.
Critics argue that this lack of competition enables Visa and Mastercard to dictate swipe fees without competitive pressure. Compared to the UK’s 0.3%, the United States’ credit card interchange fees are notably higher at 1.8%. However, the MPC clarifies that the CCCA will not affect consumer card rewards as speculated.
The impact of these fees on families’ education expenses is considerable. For K-12 school supplies, clothing, and related items, annual spending is projected to reach a record $41.5 billion. Swipe fees alone account for nearly $20 per family and $929.6 million overall. Similarly, back-to-college expenses are expected to average $1,367 per family, totaling $94 billion, with swipe fees adding just over $30 on average and $2.1 billion overall. Together, these fees could exceed $3 billion for back-to-school and back-to-college expenses.
Over the past decade, swipe fees have more than doubled and contributed to a record $160.7 billion in 2022, including debit card transactions. As a result, the average family’s expenses have increased by over $1,000 annually.
The CCCA presents a critical opportunity for Congress to address this growing issue. By requiring banks with assets of at least $100 billion to enable their issued cards to be processed over at least two unaffiliated networks, the CCCA aims to foster competition, lower fees, and enhance security. If enacted, this legislation could potentially save merchants and customers up to $15 billion per year.
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By Mike Hintze, Hintze Law
Navigating through the entangled web of legislative requirements can often feel overwhelming. This is particularly true when it comes to the newly enacted Washington My Health My Data Act (MHMDA). In my latest blog post, I delve deep into the complexities of the Act's notice obligations. The rules are demanding, suggesting a need for a completely separate notice—not just a simple tweak to your current privacy statement.
With the Act's enforcement, entities will be under increased scrutiny to provide explicit privacy disclosures concerning consumer health data, a term defined broadly under the law. In my post, I discuss drafting, posting, and maintaining a "Consumer Health Data Privacy Policy," which might seem redundant but crucial to avoiding costly mistakes. Particularly in light of the public visibility of privacy notices, getting this right is critical to staying out of the crosshairs of sharp-eyed plaintiffs' lawyers or the vigilant Washington State Attorney General. With potential legal consequences looming large, my post offers insights to help navigate the unexpected and unusual aspects of this Act.
Read Mike Hintze’s blog post here
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UPS and the Teamsters union, representing 340,000 delivery drivers, reached a crucial deal on Tuesday, avoiding a nationwide strike that could have significantly impacted the U.S. economy. The five-year tentative agreement includes $7.50 per hour pay increases for all UPS employees, including part-timers, along with eliminating a lower-paid worker class and installing air conditioning units in delivery vans.
Teamsters General President Sean M. O’Brien expressed satisfaction with the deal, stating that it sets a new standard in the labor movement and raises the bar for all workers. UPS CEO Carol Tomé also praised the agreement, calling it a “win-win-win,” as it rewards employees with industry-leading pay and benefits while maintaining the company’s competitiveness and customer service.
A strike at UPS would have had far-reaching implications, affecting the U.S. economy and the labor movement. With more companies and a larger portion of Americans relying on delivery infrastructure, the strike would have been the largest for a single employer in decades. The 1997 UPS strike resulted in permanent market share losses for the company and negative impacts on small and large businesses.
The heart of the dispute was centered around pay and benefits for part-time workers who load and sort packages in warehouses. The starting wage for part-timers was $16.20 an hour, which has not kept pace with inflation since their pay structure was separated from that of delivery drivers in the early 1980s. UPS argued that part-time employees make an average of $20 per hour after their first 30 days on the job and receive competitive health benefits and rare pensions for private-sector workers.
The consulting firm AEG estimated that a 10-day strike would have resulted in losses of over $810 million for UPS.
Now, UPS members can vote on ratifying the deal, a process expected to take about three weeks. If the deal is rejected, the union could still opt for a strike. The situation remains a developing story.
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The Economic and Revenue Forecast Council (ERFC) recently released its monthly report on general fund revenue collections, covering payments received between June 11 and July 10. The report encompasses various taxes, including sales tax, use tax, business and occupation tax, public utility tax, tobacco products tax, and penalties and interest, collectively referred to as Revenue Act receipts. Additionally, it includes payments received between June 1 and June 30 for liquor taxes, cigarette tax, property tax, real estate excise tax, unclaimed property, and other sources.
The total revenue collected for the month amounted to $2,444.7 million, surpassing expectations by $101.1 million (4.3%) based on the forecast adopted on June 22. Revenue Act taxes, particularly sales, use, utility, and business and occupation taxes, exceeded the forecast by $102.1 million (5.7%). These taxes generally indicate economic activity in May, with retail sales tax collections increasing by 6.9% year over year and B&O tax collections up by 11.9%.
On the other hand, Non-Revenue Act taxes fell slightly short of the forecast by $224 thousand (0.04%). However, real estate excise tax (REET) collections performed remarkably well, exceeding expectations by $10.3 million (11.7%). Notably, the value of transactions subject to REET has experienced a significant 50% decline since the latter half of 2021. In addition, court fees, fines, and forfeiture payments into the general fund totaled $806 thousand (18.1%) less than the forecasted amount.
In terms of inflation, there has been a downward trend since mid-summer 2022. For seven consecutive months, year-over-year CPI inflation had outpaced the increase in GFS (General Fund State) revenues. However, revenue growth surpassed CPI inflation in June by 1.7 percentage points.
Overall, the report indicates positive growth in Revenue Act taxes, particularly retail sales, and B&O taxes, while Non-Revenue Act taxes showed minor deviations from expectations. Additionally, real estate excise tax collections performed remarkably well despite a previous decline in transaction values. Furthermore, inflation trends have shown promising developments, with revenue growth now outpacing CPI inflation.
The July collections report is available here.
Read the original article from the Washington Research Council
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Washington's economic prospects brightened in June, as the state gained an estimated 11,900 jobs, bringing the unemployment rate down to 3.8%, according to the latest data released by the Employment Security Department (ESD). The increase in employment has outstripped a moderate rise in the labor force, driving the unemployment rate to its lowest since February 2020.
According to ESD's Monthly Employment Report for June, there was an increase in unemployment benefits claims, with 56,067 people paid, reflecting an increase of 820 paid claims over the previous month. This rise was attributed to increments within the educational services and information sectors.
Despite these increases, Washington's unemployment rate of 3.8% in June still remained lower than the national average, which decreased from 3.7% to 3.6% in the same month.
Further, the ESD confirmed that the preliminary estimated gain of 2,900 jobs for May 2023 was revised upwards to a gain of 4,700 jobs and the seasonally adjusted monthly unemployment rate was confirmed at 4.1%.
The state’s labor force increased by 2,900 to reach 4,068,100 in June. Meanwhile, the labor force in the Seattle/Bellevue/Everett region saw a surge of 8,000. Year-over-year, the state's labor force grew by 85,177 and the Seattle/Bellevue/Everett region witnessed an increase of 28,700.
From May to June 2023, statewide unemployment decreased from 165,000 to 154,500, except in the Seattle/Bellevue/Everett region, which slightly increased from 54,100 to 54,900. Private sector employment added 8,800 jobs, and government employment increased by 3,100. In June, seven industries expanded while six contracted, with the retail trade sector losing 2,800 jobs, particularly 900 jobs in food and beverage stores. From June 2022 to June 2023, Washington gained an estimated 117,900 jobs (not seasonally adjusted), with the private sector adding 92,300 jobs (3.1% growth) and the public sector adding 25,600 jobs (4.5% growth), showcasing the state's resilient economic recovery.
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From left: Heather Max, Seattle Police Department, Mark Johnson, WR SVP of Policy & Government Affairs, Tienny Milnor, Office of the Attorney General, Dr. Claudia Gross Shader, Office of the City Auditor, Patrick Hinds, King County Prosecuting Attorney’s Office. | |
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Mark Johnson, SVP of Policy and Government Affairs, was invited to comment on the recently released Seattle City Auditor report, "The City Can Do More to Tackle Organized Retail Crime in Seattle," before the Public Safety and Human Services Committee.
Councilmembers Andrew Lewis and Lisa Herbold, Chair of the Committee, requested the audit. Other council members present at the briefing included Sara Nelson, Alex Pedersen, and Teresa Mosqueda.
WR commends the Council and the Auditor's Office for the excellent report highlighting the city's challenges due to ORC rings. The report offers specific and lasting solutions in seven steps and ten recommendations. Dr. Claudia Gross Shader, Auditor in Charge, researched and compiled the report, which Mayor Harrell and the Seattle Police Department have embraced.
The report is especially timely as the national Retail Industry Leaders Association has recently announced a "Vibrant Communities" pilot program to focus on Seattle and King County to create model provisions to increase public safety, address retail theft, and combat ORC. WR will be partnering with these vital efforts.
A critical recognition within the multi-pronged approaches is the need for substantial focus on breaking the cycle of retail theft from ORC rings and those they enlist to "boost" or steal on their behalf. The ORC rings prey upon those experiencing substance abuse disorders, mental illness, and housing insecurity. These individuals are desperately in need of services to address their challenges.
WR is eager to partner with Seattle, King County, and all interested stakeholders to support creative, effective, and enduring solutions that will last into the future and work to help other communities facing similar issues.
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Securing qualified, well-trained staff is an increasing challenge for many retail businesses. This is where the Retail Workforce Training Roundtables can make a difference. These sessions, coming on August 8, offer retail businesses an invaluable opportunity to tap into resources and networks that can help them locate and train ready-to-work talent.
At the roundtables, participants will learn about the benefits of retail-specific job skill certifications, which can help optimize their workforce's productivity. They'll also have the opportunity to connect with workforce organizations offering subsidies for worker training, easing the financial burden of upskilling staff.
In addition, participants will gain insights into attracting and hiring qualified workers, a critical component of any successful retail operation. They will also be introduced to the NRF Foundation's RiseUP program, presented by the program's Outreach Coordinator, Jessica Viera. RiseUP can be a strategic ally in attracting quality employees.
The roundtables will take place at two locations:
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Burlington Council Chamber, 833 S. Spruce Street, Burlington, WA 98233 from 10:00AM to 11:30AM for Skagit County and nearby regions.
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Southcenter Mall, 2800 Southcenter Mall, Seattle, WA 98188 from 2:00PM to 3:30PM for King and Snohomish counties and nearby regions.
To attend, participants should RSVP to Kathie Davies at kdavies@washingtonretail.org, specifying their preferred location. The event welcomes various partners, including Workforce Development Council, chambers in King, Skagit, and Snohomish counties, local Mall Operators, and retailers.
The roundtables are part of WR’s Retail Workforce Initiative, operating under the JEDI (Justice, Equity, Diversity, and Inclusion) principles. The initiative aims to grow partnerships, promote training and employment for entry-level and second-chance workers, and highlight diverse career opportunities within the retail sector. Join in on August 8th, uncover the key to hiring qualified staff, and enhance your business's growth and development.
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In a quiet expansion of their global criminal empires, Mexican cartels are infiltrating the world of retail theft, targeting everything from big-box stores to luxury brands and small businesses. These cartels are operating organized retail crime (ORC) rings by selling the stolen goods sold online and laundering the profits through Chinese brokers—growing their criminal network to span multiple continents.
Over the past two years, these same criminal organizations have spearheaded the largest human smuggling operation across the U.S.- Mexico border in history, contributing significantly to America’s escalating fentanyl crisis. “It’s a $70 billion a year enterprise — organized retail crime,” revealed Eric DeLaune, special agent in charge at the Department of Homeland Security’s Homeland Security Investigations (HSI) arm.
These aren’t petty shoplifters but part of a well-oiled criminal machinery infiltrating every American state. Beyond the ‘boosters’ committing the thefts, they employ ‘cleaners’ to erase stolen merchandise origins, ‘fencers’ for reselling products, and professional money launderers to funnel illicit profits back to their ringleaders. The same Chinese brokers used by the cartels to move fentanyl profits are facilitating the outflow of money generated from these retail crimes.
The Chinese government has attempted to curb this illegal cash flow, instituting a $50,000 cap on individuals’ annual foreign currency exchanges in 2017. This, however, has led to the emergence of money launderers who aid illegitimate businesses, with the cartels taking advantage of legitimate financial channels, stolen gift cards, and shell companies to clean their ill-gotten gains.
In addition to the direct losses in sales taxes for local and state governments, these activities negatively affect jobs and consumer choices, cause higher prices, and can result in businesses closing.
Senator Chuck Grassley proposed the Combating Organized Retail Crime Act earlier this year, intending to establish a centralized hub within the DHS to prevent and respond to such crimes. Despite public sentiment favoring more action, the bill has so far languished without success.
Read more from the Washington Examiner
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Organized Retail Crime (ORC) is a broad, escalating problem not limited to shoplifting but an insidious issue affecting the entire retail ecosystem. ORC encompasses theft from retail stores to pilfering goods from supply chains. According to CargoNet, cargo theft rose alarmingly by 41% in the initial 20 weeks of 2023. ORC groups involved in these crimes are well-structured and can move stolen merchandise in large quantities through both legal and illegal channels.
Recent law enforcement efforts have managed to reclaim millions worth of stolen goods, proving the gravity of this illicit business. However, theft is not the only strategy these groups employ. They also engage in fraud, often using stolen credit cards or account credentials to purchase merchandise that is then resold, causing retailers to suffer losses twice over—the lost product and the financial chargeback from the fraudulent transaction.
Additionally, gift card scams have become a common feature of ORC, often exploiting the elderly or unsuspecting employees. Fraudsters alter gift cards or deceive people into buying them under false pretenses. In 2022 alone, the Federal Trade Commission registered over 48,000 cases of gift card fraud, accounting for more than $228 million in losses.
ORC is not just the work of local gangs; it includes international theft rings as well. Several South American groups have gained notoriety for executing sophisticated jewelry thefts and burglaries in affluent neighborhoods nationwide.
To tackle ORC effectively, robust legislation is necessary. The INFORM Act and the Combating Organized Retail Crime Act of 2023 (S. 140/H.R. 895) have been proposed to intensify federal support and resources for investigations into these complex crimes. WR urges the public and its members to back these laws by contacting their congressional representatives using this simple tool provided by the NRF.
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Retail rewards programs have become an excellent tool in the retail industry, aimed at encouraging customer loyalty and repeat business. However, a recent analysis by Morning Consult revealed that these programs alone do not guarantee true customer loyalty. While they can attract attention and incentivize customer behavior, they can fall short of fostering deep and lasting brand loyalty.
Morning Consult compared various brands and found that less than half of self-described loyal customers were members of the brand's rewards program. This suggests that rewards programs alone are not sufficient to cultivate loyalty. Instead, brands can reward a range of desirable behaviors and encourage customer engagement through non-transactional, usually helping to build stronger relationships with high-value customers.
Great rewards programs extend beyond the standard points-and-rewards model such as offering additional perks like free shipping and returns, eco-friendly initiatives, or experiential offerings. These value-added benefits can attract a wider audience, including younger and wealthier shoppers actively engaging in multiple rewards programs.
The analysis also revealed that various factors beyond the rewards program often influence loyalty to a brand. These can include the overall shopping experience, product quality, customer service, and alignment with the brand's values.
Read Morning Consult's full article
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The online sales landscape in 2023 for retail businesses has undergone remarkable changes due to alterations in online purchasing patterns, cutthroat competition, and escalating performance demands. These modifications bring unique challenges and stimulating opportunities for retail businesses' online platforms.
The most significant obstacle is economic instability, with 51% of businesses concerned about their organization's performance. The competition is growing fiercer, with 53% recognizing the difficulties in distinguishing themselves in the overcrowded market. Meanwhile, 58% are concentrating on expanding their market reach, although 39% anticipate potential obstacles due to economic fluctuations. Despite solid confidence in their business's position, 50% hold fears about the stability of their operations.
However, every challenge can lead to opportunity. Businesses can strategically organize and enhance their online efforts by comprehending market trends and their customer base. Prioritizing customer engagement can lead to increased loyalty and lower opt-out rates. Constructing brand reputation through steady customer interaction across numerous channels can strengthen customer's faith in the business.
The success of online sales efforts in 2023 depends heavily on actionable data and insights. Businesses equipped with real-time data can make informed decisions. Furthermore, allowing freedom in the decision-making process boosts overall efficiency.
Retail businesses will benefit by enhancing the online purchasing experience by streamlining checkouts, enhancing product image quality, and providing agile customer support. Gathering customer feedback, understanding their requirements, and addressing their issues can also enhance the customer experience. Additionally, tracking the customer journey, personalizing campaigns, and resolving problems promptly can help nurture customer loyalty.
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In an ever-growing inclusive society, retail businesses and public spaces are adopting sensory-friendly hours and accommodations, supporting a more inclusive environment for children and adults with sensory sensitivities. This practice, known as ‘Sensory-friendly hours,’ is a small yet significant step businesses are taking to welcome a section of the population that often finds participation in regular activities challenging due to sensory overload.
Sensory-friendly hours entail modifications like reducing noise, dimming lights, and possibly decreasing capacity, crafting an environment suitable for individuals with neurodivergent conditions, such as autism spectrum disorder. A commendable example is the retail giant Walmart, which recently joined this inclusive initiative. In a blog post centered around back-to-school shopping, Walmart announced its commitment to forging a more inclusive shopping atmosphere. The retail giant will introduce sensory-friendly hours from 8 a.m. to 10 a.m. on Saturdays throughout July and August, commencing July 22, in most of its stores.
According to a 2018 article in JAMA Pediatrics, 1 in 6 children in the United States face sensory processing difficulties. This initiative aids not just children but also adults with similar challenges. As society evolves, businesses realize that such inclusive practices are good for their reputation and significantly improve the lives of those who need them. So, expect to see the growth of sensory-friendly hours and accommodations as more businesses join this inclusive move.
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The escalating effects of climate change present a significant challenge for outdoor workers, including delivery drivers, who often face extreme heat conditions. The harsh reality of these workers' plight often goes unnoticed until severe health consequences like heat strokes and other serious medical conditions come to light. This increasing concern necessitates delivery drivers to take ample precautions to protect themselves from heat-related ailments.
This is not an isolated issue. Data reveals that between 2015 and 2021, the Postal Service reported more than 150 heat-related incidents to OSHA, and UPS reported 117.
Only six states, including Washington, currently mandate heat rules for outdoor laborers, leaving many to contend with rising temperatures without proper safety measures.
Delivery drivers regularly grapple with demanding tasks and potentially dangerous heat exceeding 130F in their vehicles. In response, some companies have provided cooling sleeves and hats and installed fans. Dehydration and heat stress may lead to serious health problems, yet drivers often limit water intake to minimize bathroom stops. Awareness of heat safety issues goes beyond individual companies, affecting the whole industry.
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Steering clear of hazardous same level falls
When an individual describes a fall as from “the same level”, it means falling onto the same surface that they were walking on, standing on, or falling into or against objects at or above the surface. This typically occurs when the person slips on, or trips over, something.
Slip-type falls, or “slip-and-fall” incidents, happen when there’s insufficient slip resistance between a person’s foot and the ground, usually at the moment of heel strike, which leads to a sliding motion. In this situation, the fall causes the person’s center of gravity, which remains behind the slipping foot, to be unsupported, leading to an imbalance and a potential fall. Factors such as water, ice, oils, and even dry material, such as sawdust or sand, can affect these types of falls.
Trip-type falls, also known as “trip-and-fall incidents,” occur when a person encounters an unseen object or raised surface in their walking path. These types of falls can happen when a person is walking or when an object or surface prevents or briefly delays the trailing leg from swinging forward. When this happens, the person can’t achieve a timely and accurate positioning of the foot in the direction of travel, preventing balance in their upper body at the critical moment of anticipated contact.
These types of falls can be the result of a health or physical condition, impaired vision, or other issue affecting the person’s judgment and balance, including:
- Stress-based illness
- Impaired vision or visual perception
- Age
- Physical state, such as fatigue
- Alcohol, medications, or drugs, including prescription, OTC, and illicit
One should always be observant of their surroundings, focus on what they are doing, and remain aware to avoid distractions that could lead to potential falls. Here are several resources on this topic:
Our safety team is available to help members take their safety program from compliance to quality safety practices. Contact us at safety@waretailservices.com to learn more.
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WR diversity statement
WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.
We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.
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Renée Sunde
President/CEO
360.200.6450
Email
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Rose Gundersen
VP of Operations
& Retail Services
360.200.6452
Email
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Mark Johnson
Senior VP of Policy & Govt. Affairs
360.943.0667
Email
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Robert B. Haase
Director of
Communications
360.753.8742
Email
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