Organized retail theft a high priority concern By Jan Teague, President/CEO
The tough economy creates even stronger concern over retail theft which eats away at profit for retailers and sales taxes for governments. Retailers this session are hoping to have their concerns over organized retail theft heard by the Legislature and will ask the state to improve its laws to emphasize prosecution for property crime.
Property crimes have taken a back seat to priorities for more serious violent crime or drug crime by prosecutors who admit it is a funding issue. But retailers report that the two are linked through retail theft rings that are organized, sometimes violent, often funding drug related enterprises and sometimes linked to financing terrorist activities.
Organized retail theft nationwide now creates $40 billion dollars in annual losses for retailers. Roughly $5.4 million of those losses are in Washington State based on per capita calculations. Numbers for Washington State could be even higher because there is a tendency for these rings to operate in more urbanized, populated areas.
When budgets are tight for state and local governments, it's important to calculate the sales tax losses attributed to retail theft. The state loses $354,000 a year in taxes because of organized retail theft.
Retailers report that this is the tip of the iceberg. Losses grow each year due to lack of prosecution and rings understanding business limits based on the void for prosecution. Thieves can now steal up to $250 in a store without fear of prosecution and that number could go up to $1,000 if the state Legislature changes the law on the limit next session.
While the media tends to focus its reporting on more serious crime, law enforcement has begun to recognize the link between these crime rings and more serious crime. The FBI for instance has a new partnership with prosecutors in Delaware forming a new division to fight organized retail crime.
Here in Washington State the opposite has been true. A few Legislators influencing discussions have in the past few years simply proposed increasing the dollar value on felony theft from $250 to $1,000 without considering the implications for retailers or the incentive this creates for professional criminals to steal more.
But the economy and the seriousness of these property crimes is getting more recognition from some of these Legislators. I think they are beginning to see that the state and local governments are also victims of organized retail theft and that this crime will only increase unless swift steps are taken to control these activities.
Talks are now underway to create a special prosecutor to go after these organized crime rings. Retailers are eager to support this idea and the formation of an Organized Retail Theft Taskforce to develop better strategies to prevent this growing criminal industry that is sapping our profits, the state's tax base, and the resources of local government legal systems.
I do believe that there will be a bill passed this session to deal with Organized Retail Theft. After the holidays, I would ask that anyone who has a story to tell on their experiences with retail theft consider calling their Legislator. Your voice matters and we do appreciate your support expressing what you have seen.
WRA meets with Senator on health care bills
The Washington Retail Associaton met with the Senate's Health Care Committee chairwoman this week to discuss plans for proposed health care bills expected in the 2009 Legislative session.
Committee chair Sen. Karen Keiser, D-Des Moines, outlined plans including:
*A health care administrative simplification bill. It is designed to reduce health care costs by eliminating duplication of records and reporting requirements.
*A bill to establish a computerized health information databank designed to speed service by doctors to patients. Doctors would need special authorization to gain entry into the databank.
*A pending proposal for an omnibus health care reform bill. Details remain to be worked out.
The WRA will be evaluating the proposals as they come out before taking a position on them, said Mark Johnson, WRA's Vice President Government Affairs, who met with Keiser.
Johnson also attended a health care coalition meeting to discuss the Comprehensive Health Options, Incentives and Consumer Empowerment or "CHOICE" Act, which would allow businesses and individuals to explore more affordable health care coverage outside of Washington. The bill aims to create plans tailored to young adults and revise the Basic Health Plan to provide enrollees with affordable private market options.
The WRA will work to implement the Omnibus CHOICE Act, Johnson said.
The coalition also heard a review by the Washington Policy Center of a statewide guaranteed health benefit plan proposed by Insurance Commissioner Mike Kreidler.
The policy center report noted that Kreidler intends to fund the plan through payroll taxes of up to 5 percent.
While the proposal has a worthy goal, Johnson said the WRA would oppose the concept of paying for the plan through payroll taxes.
The WRA opposes new taxes that further burden retailers struggling in a very difficult economy, Johnson said.
Seminar urges "business continuity"
An estimated 35 percent of small businesses fail to recover from disasters and close permanently, according to the Internal Revenue Service.
The IRS sponsored a seminar in Bellevue last week in hopes of better preparing small businesses to overcome threats including floods, fires, earthquakes, wind storms and other natural disasters.
The Washington Retail Association attended the meeting during which University of Washington and City of Bellevue emergency management officials spoke. Kari Gilje, the IRS' stakeholder liaison, also spoke to an audience of about 40.
A major shift of a Seattle earthquake fault could cause an estimated 1,600 deaths, said Siri-Elizabeth McLean of the University of Washington. Awareness of the region's earthquake vulnerabilities is too low, she said.
"I'm amazed at how many people move up here and think they're getting away from earthquakes," McLean said.
Bellevue stresses emergency preparedness because it relies heavily on commercial taxpayers to afford city services, said Vernon Owens, the city's emergency preparedness coordinator.
"With no businesses, there's no tax base," he said. "We can't run our city."
The panelists urged the audience of small businesses to take key survival steps including duplicating computer records outside the state, checking with suppliers to see how well prepared they are for a disaster, establishing payroll backup plans and arranging to run the business temporarily from home or an alternate location if a disaster destroys the headquarters.
A contractor reviewing portions of the state's Retrospective Rating Programs has fallen behind schedule.
Tammie Hetrick, the Washington Retail Association's Vice President of Retail Services, met with the Labor & Industries Department Director Judy Schurke recently to discuss the matter.
A contractor establishing a work plan to review the program's actuarial section just recently completed a report that was originally due on October 15.
Hetrick said she would monitor the contractor's progress to make sure the firm can meet its deadlines. The company's next report, due Jan. 1, 2009, will review how the state calculates and evaluates Retro programs.
Retro programs operated by state associations work with employers to better manage their workers' compensation premium costs and return refunds to employers who maintain safe workplaces. The programs also assist injured workers in expediting compensation benefits and medical treatment while assisting them with programs to return to work as soon as possible.
The contractors were hired after Gov. Christine Gregoire asked for a review of state Retro programs last year, Hetrick said.
Hetrick said a benefit of the review would be to better educate legislators and other interested parties on the benefits of Retro programs.
Retailers to air commercials touting sales tax
Ads by the International Council of Shopping Centers are scheduled to run on television this weekend touting the economic and civic benefits of holiday shopping at local retailers.
The resulting sales taxes support government budgets and save jobs, the one-minute ads point out. They point out that most governments generate one third of their revenues from sales taxes to maintain payrolls and extend public services.
The spots are scheduled to run this Friday and Saturday on programs including "The Oprah Winfrey Show" and weekend editions of "Good Morning America" and the "Today Show." They are scheduled to air on networks including CNN, Fox News, MSNBC and the Weather Channel. Click here to watch the video.
Source: International Council of Shopping Centers
Malls report mixed holiday sales results
Early Western Washington holiday sales this year either were slightly up or mixed, with department stores showing the best results, an anonymous survey of Washington Retail Association member malls shows.
Crowds were up at some stores compared to last year with appliances and electronics departments drawing some of the larger crowds, mall managers reported.
The managers noted that sales promotions and Black Friday storewide discounts helped sales results despite the statewide recession.
One manager measured success by the mall's traffic counters, which showed some stores with high numbers while an equal number of stores showed dips in crowds compared to last year.
Though crowds were higher at some stores, sales were only up slightly implying that shoppers this year are hunting more for bargains, according to one mall report.
Niche retailers do well in economic slump
Though the recession has slowed retail sales, some niche retailers are surviving the downturn, CNN Money reports.
Success stories Hot Topic and Buckle cater their apparel to young adult shoppers looking for the latest style trends. Buckle's November same-store sales were up 15 percent while Hot Topic's were up 6.5 percent, according to the sales tracker Thomson Reuters.
Two other niche success stories are American Apparel and Cato, where November same-store sales were up 6 percent and 2 percent, respectively. American Apparel caters to teens with fashion accessories while Cato is a regional apparel seller targeting low-to-mid income shoppers.
CNN Money also cited Aaron's Rent, which offers rent-to-own options on a variety of items including furniture, kitchen appliances and televisions. Its third quarter sales are up 5.7 percent this year.
All of the above stores offer popular items at competitive prices shoppers are seeking in the recession, retail analysts said.
Source: CNN Money
Shoppers spending less, survey finds
One national holiday shopping survey found that fewer consumers have "hot" gifts on their list this year and they're cutting back on gifts for work colleagues.
Those were among the results reported in Accenture's latest annual holiday shopping survey of 537 people.
Survey highlights:
*About 14 percent will buy gifts for co-workers and a third of them will spend less this year.
*Twenty-nine percent have "hot" gifts on this year's shopping list compared to 33 percent a year ago.
*Fifty-four percent said they expected to spend at least $100 less than last year, while 22 percent planned to spend $250 less than last year. To download the complete survey results, click here.
Accenture is a worldwide management consulting and technology services company.
Source: National Retail Federation
New local crime show debuts
Safeway's loss prevention director, Jason Moulton, reports on a new local television show that could assist retailers in their efforts to combat organized retail theft.
"Washington's Most Wanted" airs Friday and Saturday evenings on Q13 Fox and MQ2, both in Seattle. The show is produced in cooperation with Crime Stoppers of Puget Sound.
To learn more about the show's reports and program schedules, click here.
Sources: Q13 FOX, Crime Stoppers of Puget Sound
WRA Website adds new features
If you haven't visited the Washington Retail Association's Website recently, please take another look.
We're putting more information onto the site more frequently as we near the next Legislative session. The quicker pace of additions to the site will continue through the next session and beyond.
A new right-hand column on the homepage now includes periodic video and audio updates on important issues, recent news developments of importance to retailers and several Internal Revenue Service business-related links to help retailers prepare for the upcoming tax season.
Our hope is that WRA members and the public at large will increasingly rely on the Website to keep abreast as issues related to retailers and their well-being surface or change.
And, of course, we invite your feedback and suggestions.
Please contact Jim Szymanski, Director of Public Affairs, with any thoughts you have regarding the additions to the site or further changes you believe might be useful. You can reach Jim either at 360-943-9198, Extension 12 or at jim.szymanski@retailassociation.org.
The Washington Retail Association, WRA, is a 501 C 6 trade association formed to advocate for Washington State’s retailers at the local, state and national level. Since 1987, the WRA has protected Washington's retailers from unreasonable taxes, fees, regulations and legislation. The efforts of the WRA benefit all Washington state retailers and help fuel statewide economic growth.
