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Ethics

Beware UKASH related scam

Newsagents be alert to a scam involving UKASH vouchers.  Scammers are contacting people saying they can get thousands of dollars if they pay a $250 fee using a UKASH voucher.  a UKASH voucher is like cash.  The poor customer hands over or sends off the UKASH voucher and hears nothing more.  If you are being approached to sell these make sure that your customers are not being scammed.  If you have doubt, contact scamwatch.

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Ethics

Bullying and threats no way to win newsagents over

Any newsagent who is threatened with do business with us or we will come and compete directly with you ought to report this activity to the police as well as their state association. Write down the specific threat, who said it and when so that you can be certain when reporting it.

Fear and intimidation have no place in business let alone the Australian newsagency channel.

I recall when threats were made by one company to some newsagents a few years ago that if they did not sign up for their service they would put it into another business nearby. Newsagents outlasted the service.

If a business cannot win your business on the merits of its products or services then it does not deserve your business.  Remember, you are the customer, not the servant.

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Ethics

Backlash against News Corp. media outlets

As the fall out of the UK News International phone hacking scandal continues, a website blocker for Firefox has been released which blocks access to News Corp. websites including Australian websites:

theaustralian.com.au
news.com.au
truelocal.com.au
heraldsun.com
adelaidenow.com.au
dailytelegraph.com.au
couriermail.com.au
weeklytimesnow.com.au
perthnow.com.au
mxnet.com.au
alphamagazine.com.au
newsspace.com.au
careerone.com.au
carsguide.com.au

There is another blocker available for Google Chrome.

The blockers are getting plenty of coverage on twitter, the blogosphere and news sites.

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Ethics

The ethical test for all outposts of News Corp.

All reaches of News Corp. are under the spotlight following the phone hacking scandal and evidence of the cover up by the organisation including admissions at the most senior level.

The hacking of phones, thousands apparently, and acknowledgment by News International boss Rebekah Brookes of payments to police in the UK and an acknowledgment by James Murdoch of approving as  payment to victims in apparent return for silence naturally calls into question the ethics of this worldwide media company.

As Margaret Simons pointed out yesterday at crikey.com, there are implications for News Ltd here in Australia.  Simons rightly honed in on the company’s Code of Conduct for journalists because John Hartigan, Australian Chairman, pointed to this in a communication relating to the UK scandal.  Simons called for journalists to respond on their knowledge of the Code. Check out some responses at The Content Makers blog.

Given the declared behaviour it is appropriate that the spotlight is on all News Corp. businesses including their Australian businesses.  Since News appears to have sat on or hidden the extent of this scandal for many years we can only wonder what else there is to be discovered.

Australian newsagents could consider the ethics of News in the context of their cover price policy which has left us earning less in real terms today than ten years ago – while they have looked after themselves and lifted advertising rates, they have reduced what we earn at retail and for home delivery.  An organisation committed to ethical behaviour would ensure that its pricing decisions were fairer to working families.

We could look at newspaper home delivery fees through the prism of ethics – they have fallen in real terms as I wrote here recently.  News Limited has presided over distribution newsagents earning less.  An organisation which claims to operate ethically would ensure that it approved and facilitated a fair price for those working hard on its behalf as newsagents do.  Instead, News caps what newsagents can earn, denying newsagents reasonable business levers which reflect on local conditions.

We could also consider the ethics of News in their approach to the rationalisation of newspaper home delivery.   The newspaper distribution system which we have today is a system which they have controlled for decades.  Many newsagents are losing their family businesses because of the control News exerts over what they earn.   Family assets are disappearing as newspaper distribution is rationalised by News as they create a new model to serve their financial needs.  This rationalisation looks set to escalate over the next six to twelve months.  An ethical organisation driving rationalisation and laying off employees would have an obligation to compensate the dismantling of the system it created.

Maybe these three examples do not reflect ethical failure – others can decide that.  The do, however, reflect a lack of care for and commitment to socially responsible behaviour by News.  Yes, they are a business with a sole purpose of driving shareholder value.  But they are also a large part of the Australian community and it is reasonable that we expect them to act in a socially responsible way to families and the wider community.

While these behaviours do not compare to the apparent illegal behaviour in the UK, they do reflect on the ethics of the company and the regard (or otherwise) it has for its distribution channel and the community in which it exists.

Of course, News shareholders would disagree.  They would say that the company is doing what it needs to do to drive its costs down.  They would say that it is also keeping the costs for consumers low.  Maybe so.  However, on the income side, the non cover price income side, it is not showing a concern for costs which flow on to consumers.

It is possible that the ethical failure exposed by the UK phone hacking scandal is part of a broader ethical weakness in News. Twitter, blogs and even mainstream news outlets are lighting up asking questions and turning on spotlights.  While News outposts around the world will be unhappy and uncomfortable with this, it is appropriate.  If they have nothing to hide they have nothing to be uncomfortable about.

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Ethics

The people are using Twitter to protest News International

The use of Twitter by people around the world to express shock, disappointment, frustration and anger at News International, News Corp. and the Murdochs over the phone hacking scandal and subsequent cover up will be referred to in the future as another moment when the extraordinary power of Twitter was on full display.

The protests made through tweets are having an impact in News revenue and its share price.

Whereas in the past it was the fourth estate on which we the people relied to put issues under the spotlight and through which campaigns of justice are run. Twitter has given anyone with a mobile device or a computer a worldwide podium from which to speak.  And speak they are.  Hashtags enable people who have never met to unite around a cause. We can see that there have been close to 40,000 tweets in the last 24 hours and 3,900 in the last hour.

The extraordinary tweet traffic using the #NotW hashtag over the last couple of days is evidence of people power in action.  It appears that rolling tsunamis of tweets calling for advertisers to pull advertising from News of the World and other News International titles is a key reason advertisers have been doing just that and a key reason that News International has decided to shut the newspaper down after this weekend’s edition.

The decision to shut the newspaper is like the action of a surgeon removing a cancerous growth from a human body.  Time will tell is this surgery by News removes all the cancer.

But back to the point of this post.  Given the dominance of print media outlets here in Australia by News and the lack of in-depth coverage by News outlets of the phone hacking scandal and subsequent cover-up, Twitter is proving to be an excellent source for up to the minute news.

Twitter has no borders and no editors.  It has been wonderful to see people across the globe come together on this issue, ahead of the politicians, unified by hashtags.

Based on the extraordinary traffic of Tweets which is not showing any sign of slowing, News is going to need to improve its efforts at damage control if it is to mitigate the situation – including News here in Australia.

From a newsagent perspective, what we are seeing is a platform which disrupts print in action.  This story and how people are interacting with it is a story about print.  It demonstrates how the story is the thing as opposed to the feel of the paper and the smell of the ink to which which many newspaper lovers often refer when saying the medium will go on for decades.

Update and Footnote: with speculation mounting that News International will extend The Sun to a Sunday edition, the closure of the News of the World could be seen as cynical and not actually reasonably addressing the problem.

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Ethics

UK News International phone hacking exposes ethical failure

The News International phone hacking scandal has gone from bad to worse with allegations of police investigations having been hampered by News representatives in pursuit of stories.   News is seeing a commercial implication with advertisers like Ford withdrawing advertising as a result of the latest revelations.  Kent News is reporting planned protests at retailers selling News International titles.

Beyond the appalling hacking impacting so many people in the UK is the apparent cover-up by News International for several years.  This cover-up is apparent in the reporting, or lack thereof, here in Australia of what is the biggest newspaper related scandal in decades.

The hacking and the cover up represent an ethical failure for which News at its highest levels globally must be accountable.  To date it has sought to avoid such accountability.  The repeated denials by News leave it open for other conclusions to be drawn.

Listening to the latest on the story yesterday made me wonder if I would take their titles off the shelves as stand against their actions.  If an advertiser can distance themselves from unacceptable behavior by not supporting a product and or company then why not the retailer?

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Ethics

This title should not have been sent to newsagents

weddingspeeches.JPGNetwork Services should not have The Complete Guide Wedding Speeches to newsagents last week.  We can source similar wedding speech guides through other suppliers and achieve a 50% or better margin.  We can even achieve this with a sale or return model in some situations.  Network has sent a title at 25% margin with an on-sale of fifteen months.  Sure, we only received two copies – they will say that is reasonable.  Well, no.  When we do a wedding display, a little later in the year, we will carry more copies of wedding speech titles, enough for them to be noticed in the display.  What are we supposed to do with two copies of a title which is too small for traditional magazine fixturing?  Seriously!  In our case, had we kept the title, we would be okay as we do not use traditional magazine fixturing.  Go into most newsagencies with this title today and I think you would be hard pressed to notice it among the magazine mix.

Network Services needs to do a better job in deciding what it will supply newsagents.  I understand the utter stupidity of that statement.  Network will do what is right for network.  The supply of this title and other titles shows that.

I’d note that some newsagents will have been happy to receive this title.  They rely on the magazine distributors to keep them stocked of this type of low volume fringe product.  However, there are more and more entrepreneurial newsagents who want to exert more control over the fringe areas of their businesses.  There is good money to be made by buying well. Sock like this, sourced through the magazine distribution model, is not bought well.

We early returned this title.

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Ethics

Watching the News scandal unfold

It is interesting watching the phone tapping scandal in the UK involving News International unfold.  Over there there are plenty of non News affiliated newspapers prepared to cover the story.  Here, the running is pretty much left up to Fairfax newspapers.  I am relying on the coverage in The Guardian and The Independent.  This story feels like it has a ways to go yet.  It makes one wonder how far it will reach.

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Ethics

Who is Mike Smith and why does his opinion matter?

Mike Smith has been getting a bit of attention in the media recently.  First this week he was on the attack about the government decision to not let the Singaporeans buy the commpany which manages the Australian Stock Exchange.  Next, he was saying that the federal government is weak.

It bothers me that the opinions of the CEO of one of Australians big four banks is considered news.  His sole interest is the share price for the ANZ.  Corporations law dictates this.  What is good for an ANZ shareholder, and his personal hip pocket, may not be good for Australia or the businesses which are tethered to the ANZ through home mortgages and small business lending facilities.

The ANZ gouges its customers at every opportunity.  Its decisions and the decisions of the other big banks do more harm to families and small businesses than anything this or other governments have done wrong.

I wish that Mike Smith’s opinions did not get the news coverage they do.  I would prefer to see a more balanced representation of opinions on matters like the possible sale of the ASX to Singaporeans.  Personally, I don’t see the sense of this.  The operation of the ASX is fundamental to the economy.  We have sold off enough of this country, why sell off our stock exchange as well?  Who benefits.  Okay, maybe the shareholders.  But do investors benefit?  I don’t see it.

Mike Smith and his big bank CEO colleagues need to be put in their place.  We should stop paying attention to what they say.

I feel better now.  I’m going out for breakfast.

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Ethics

Small retailers blocked from returning unsold milk thanks to Coles and Woolworths

As a consequence of the milk price war between Coles and Woolworths, I have heard of independent retailers no longer permitted to return unsold milk according to a friend who stocks milk in his business.

So, in effect, independent retailers are carrying the costs of hefty discounts to Coles and Woolworths, along with the farmers.

Australian consumers need to remember that small businesses in this country employee more people than big businesses.  They can only do this as long as they are supported by consumers.

The milk and bread price wars being run by Coles and Woolworths are not socially responsible.

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Ethics

When a landlord competes with a tenant

Shopping centre property giant Westfield is to compete with small business newsagents by opening Ticketek ticketing agencies at customer service desks in its shopping centres, in competition with many small business newsagents offering Ticketek in these sames centres.

Despite being open for longer hours than centre management customer service desks, Westfield prevailed upon Ticketek to permit the opening of these new businesses in competition with incumbent newsagents.

I wonder if Westfield is paying the usual fee for each new sales location which newsagents have to pay?

Landlords hold the permitted use clause in a tenancy lease to control what we can offer in our newsagencies.  You either buckle to their interpretation of what you can sell or face a raft of penalties to your business.  They say the permitted use clause is there to protect your business as they will fight for you if someone tries to compete with our when their lease does not permit it.

What do you do when the landlord is the competitor, as is to be the case in many of the 37 Westfield shopping centres?

I feel for the newsagents affected.  I especially feel for those who are part of a marketing group which is inactive on this issue.

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Ethics

How you can help fight on the EFTPOS issue

The ANF has generously provided a letter for newsagents to use to lobby parliamentarians of the EFTPOS issue. Click here for a copy of the letter which you can personalise and send.  I urge newsagent to engage with this. If the forecast changes proceed, we will face higher bank fees per EFTPOS transaction than major Coles and Woolworths. This will further erode consumer perception of newsagents and other smaller and independent retailers who compete with these two retail giants.

The ANF is lobbying from their end.  Tyro, the Broadband EFTPOS company is lobbying from their end.  Please engage in this campaign. The more newsagents who write the better.

Here is further background on this issue:

Eftpos Payments Australia Limited, EPAL, has been given the authority to set a multilateral fee only limited to the cap of 12 cents.

EPAL members are:

  • Australia and New Zealand Banking Group Limited
  • Australian Settlements Limited
  • Bank of Queensland Limited
  • Bendigo and Adelaide Bank Limited
  • Cashcard Limited
  • Citigroup Pty Limited
  • Commonwealth Bank of Australia
  • Coles Group Limited
  • Cuscal Limited
  • Indue Limited
  • National Australia Bank Limited
  • Suncorp Metway Limited
  • Westpac Banking Corporation
  • Woolworths Limited

On 27 November 2009, the RBA varied the EFTPOS Standard, based on the advice of the PSB. The purpose of the variation is to promote competition and efficiency in the Australia payments system by making the regulation of multilateral interchange fees in the EFTPOS system more consistent with that of the scheme debit system. The varied EFTPOS Standard imposes a cap on the weighted average of multilateral interchange fees set by the newly established EFTPOS scheme (EPAL) of 12 cents paid to the issuer – the same as for scheme debit interchange fees. The variation of the EFTPOS Standard is expected to enhance the ability of the EFTPOS system to compete with the international debt card schemes. The varied EFTPOS standard does not change the way in which bilateral interchange fees are regulated. Bilateral interchange fees on purchase transaction will remain regulated between 4 and 5 cents paid to the acquirer.

Check out this link.

The bilateral interchange fee clause allows Coles and Woolworths to avoid the fee increase. The next step is for the banks to terminate bilateral agreements and move to the multilateral agreement. Then the acquiring side of the banks has to decide on whether it will pass through the interchange fee increase from the issuing side to the merchants. It would be strange to expect that the banks raise the fee to then absorb it  And then the merchants have to decide on whether they pass through the increased costs to consumers via price increase, surcharge EFTPOS, reduce or eliminate EFTPOS acceptance or absorb the cost increase in their margins.

The lobbying by newsagents and other independent retailers has to mobilise media, politicians and associations so as to move the EPAL board members to revise their fee increase decision. It is untimely and unjustifiable to raise EFTPOS fees. The merchants carry most of the burden involved in upgrading the EFTPOS network for EMV (chip) and contactless. They should continue to benefit from the negative interchange fee.

In my view it is grossly unfair that small retailers like newsagents are slugged with the fee to fund EFTPOS, when Woolworths and Coles are not.

Please engage in this campaign.

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EFTPOS fees

Fighting the banks on their anti small business EFTPOS fees

Newsagents need to gear up for a fight with the banks on the new EFTPOS fee regime.  Otherwise Coles and Woolworths will have the advantage of not having to pay the 5 cents (or more) transaction fee wel will face with the recently announced changed.

The EFTPOS fee move is all about the banks looking for other fee opportunities.  In this move, they have a fee which is difficult to understand and somewhat removed from the consumer.  By hitting some retailers (the weak and generally disorganised) and not others (the big and very organised) they are giving big businesses an unfair advantage.

What are newsagents going to do about this?

If we do not fight, many of us will probably absorb the fee as another cost of business. Those who do not risk negatively impacting customer goodwill.

Our fight should / could include:

  1. Lobbying local federal members of parliament.
  2. Complaining to the Banking Industry Ombudsman.
  3. Complaining to our banks.
  4. Moving our business to a smaller more friendly bank.
  5. Running a national and unified across the counter campaign – to EVERY newsagent customer.
  6. Calling talkback radio to get the story on the agenda.
  7. Picketing outside Coles and Woolworths head offices.
  8. Joining with other retail groups and bodies to unite on this common cause.
  9. Writing to newspapers.

TYRO is a focal point on this issue since so many of their retail customers are small businesses.  I am confident that they will also provide suggestions of how newsagents can engage on this topic.

This is not an issue which newsagents should leave to the next person to deal with.

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EFTPOS fees

ACCC win on photocopy paper price fixing

The Federal Court last month ordered Singapore based Asia Pulp & Paper Co Ltd  and a related Indonesian company, PT Indah Kiat Pulp and Paper Tbk to pay penalties totalling $4.2 million for fixing the price of photocopy paper  supplied to Australian customers. Click here for the ACCC announcement.

I can’t find out the brands of copy paper this relates to. The case interests me for a couple of reasons:

  1. The continued focus of the ACCC of anti competitive behaviour.  This is an important function of the ACCC as there are certainly business people out there who are happy to collude in order to protect their business.
  2. The case is a reminder of the challenges in the copy paper area.  Margins are wafer thin and it is difficult to win business on price.

I am glad the companies got caught and were penalised.

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Ethics

Tyro makes it case on the EFTPOS interchange fee announcement

Jost Stollmann CEO of Tyro sent me an email today with an interesting perspective on the EFTPOS interchange fee announcement yesterday.  I share it here as it is relevant to newsagents who compete daily with Coles and Woolworths.  Here is what Jost had to say:

Now it is all in the open. The banks, Woolworths and Coles have agreed on a new EFTPOS fee regime. The two big retailers continue to get paid by the banks an interchange fee of 4 to 5 cents for EFTPOS transactions whereas all the other Australian retailers get slapped with an estimated average 11 cents fee increase per EFTPOS transactions. Instead of receiving also the 4 to 5 cents as up to now, they have to pay 5 cents for a standard EFTPOS transaction. EPAL also charges a new scheme fee of one cent to the issuer and one cent to the acquirer. The volume is big. The Australian EFTPOS system processes 2 billion transactions per year. The facts:

1. According to yesterday’s Australian Financial Review, Woolworths and Coles have confirmed that they are not impacted by the EFTPOS fee increase because they process EFTPOS transactions directly with the issuing banks on the basis of bilateral arrangements. So they will continue to receive a rebate for each EFTPOS transaction based on the 4 to 5 cents interchange rate that the card issuing banks pay to them.

2. The rest of the merchant world has to expect higher EFTPOS fees from 1 October 2011 on. EFTPOS Australia Payments Limited (EPAL) has reversed and increased the EFTPOS interchange fee by 9 to 10 cents. It has added 1 cent scheme fee charged to issuers and 1 cent to acquirers. When banks pass through the cost increases, merchants have to decide whether they absorb the cost increase, raise prices, surcharge EFTPOS transactions or limit ETPOS acceptance.

3. Banks as well as Woolworths and Coles are in the enviable position to receive up to 5 cents per transaction to fund the EFTPOS technology upgrade of their central systems and to support their bottom line.

4. 325,000 merchants with 700,000 terminals, from Harvey Norman to the corner store, will have to worry about and pay to upgrade their EFTPOS technology. Their terminals have to be upgraded and/or swapped out to accept EFTPOS EMV (chip) and contact-less cards. They will have to motivate and pay their software vendors to integrate new EFTPOS functionality into their point of sale software or web sites.

The payment space is complicated, but Tyro works tirelessly to create transparency for the media and advocate fairness for the merchant community. This fee regime is not aimed at making EFTPOS competitive and ensuring its long term survival as claimed.

This is what Woolworths general manager for financial services, Dhun Karai, had to say to the AFR: “The likely threat for other merchants is that to provide revenues to the banks, they will be slugged with higher merchant service fees on eftpos which will diminish the attractiveness of eftpos in comparison to scheme debit cards.” She said Woolworths and Coles directly processed transactions with the issuing banks, which meant they faced no impact from the change.

So, this new EPAL regime is all about raising bank fees with the dire consequence of making EFTPOS less attractive for merchants to invest into and to offer to their customers. Merchants now suffer a significant competitive disadvantage compared to Woolworths and Coles. Cardholders will ultimately pay with higher prices, less competition and availability.

Recent demands that banks absorb the interchange fee is beside the point and naive. It would mean that the big bank issuing side raises fees and big bank acquiring side absorbs the same fees. They could have resolved that with internal accounting. The interchange fee is the problem, because it is not exposed to competition. No retailer or association is able to negotiate the interchange fee with his bank. This bank fee increase has to go! It is unjustifiable and untimely.

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EFTPOS fees

A trashed magazine from Media Factory

website-builder.JPGWhat a piece of trash Ultimate Website Builder is. This supposedly new title has done the rounds. Copies we received had two price stickers half ripped off. The product looks second hand. Click on the image to see a larger version and the ripped price stickers.

Inside the covers it does not get much better. The content is not new. It certainly is not ultimate in any way. Here is another title of sausage factory content from Australian publishing house Media Factory. The Jim Flynn company which takes cheap overseas content, probably sourced for next to nothing, and barely dressed up as fresh content.

Check the titles from media factory – one Editor.  This says something a out the content.

The Ultimate Website Builder title is, in my view, a sham, certainly not deserving of the title or the new moniker.

It galls me that Network Services requests a full copy return. What? … so Media Factory can send it out again. This is appalling. If the publisher wants full copy return they should fund this – our labour and the additional freight.

Newsagents are being a used with this title.  Maybe this is the title to test the suggestion by some that we have o obligation to return non ACP product as full copy returns.

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Ethics

Guaranteed minimum sales for magazines?

How would newsagents feel if they discovered that a competitor in the magazine space was financially compensated when a title did not achieve the retail sales projected by the publisher or distributor?

Just asking…

I am not naive enough to think that all newsagent retailers have the same terms. There are many factors in play in negotiating terms including financial, operational and business clout.

It could/should be in the interests of publishers and distributors to at least seek to negotiate similar terms for newsagents if their commercial goals can be met.  Otherwise, newsagents, who account for 50% of magazine sales yet sit at the bottom end of the magazine sales channel, ought to stop aspiring to improve their businesses. If we are all paid the same then we all aspire to act and work the same. That’;s not business.

Maybe magazine publishers and distributors would see an improvement in the performance of magazines in newsagencies if newsagents had the opportunity of more attractive commercial terms.

Just sayin…

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Ethics

Desperation in the gossip

You can tell how much a newsagent supplier trusts their products and services by how much they gossip about their competitors.  Smart newsagents see this gossip for what it is.  Unfortunately, some take gossip as true and find out later that they have been duped.

Professional gossipers are smart, they usually don’t gossip in writing.  Their goal is to fan a fire of Chinese whispers.

Next time a supplier tells you something about a competitor, ask them why they think you should know this and ask them for proof.  Who know, your challenge could stop their game playing and force them to focus on their products and services.

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Ethics

Customers helping customers – the Christmas spirit in a newsagency

A customer asked for help in choosing a car magazine as a gift in my newsXpress Forest Hill store last week.  She didn’t know much about cars and wanted to make sure she purchased a gift which would be liked.

Another customer offered to help as he was a car magazine enthusiast.

The two customers talked for ten minutes about cars and the car magazines we had on offer.  They worked together to make the selection for the Christmas gift.  They were a delight to watch.

We were most appreciative of the knowledgable assistance given by the customer who stepped into help.  He was glad to have the opportunity.

This true story is not unique. I bet it happens many times each day across the newsagency channel.  People come to newsagencies for magazines because we are the specialists – like the lady looking for a gift. People with special interests come to newsagencies because of our range, our browser friendly attitude and because the environment is personal.

This difference – range, customer comfort and personal service – is vital to our entire channel.  We owe it to each other to do our best in these areas as they reflect our point of difference.

We rely on the two customers in my story – the lady looking for a magazine as a gift and the guy who shops in newsagencies because of the range and the browser friendliness.  We need to do more to attract and keep them.

The Christmas spirit is on show in many newsagencies right across Australia.

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Customer Service

Would you leave your shop unlocked at night?

Newsagents should take care with who they permit to access their computer system without their knowledge.  I know of at least two newsagency software companies who have access direct into newsagency businesses without the knowledge of the newsagents.

This is a security risk.

You should always know who is accessing your computer system and why.  You should not agree to unfettered access as some newsagents accept today.

If someone outside your business can access your computer system and thereby your business data, how can you be sure that your interests are protected.  If they need to access this for maintenance reasons then you can let them in each time as you would any guest coming toi your home.  This is how my software company Tower Systems operates.  I would never want the risk of having unfettered access to a newsagent’s business without their knowledge.

Be careful as I have seen instances over the years where the interests of the newsagents affected were not protected.

So, would you leave your shop unlocked at night?  Some newsagents do, sometimes without knowing it.

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Ethics

Telstra cuts newsagent phone recharge margin by 20%

Telstra has announced a cut of 20% to the commission earned by newsagents for mobile phone recharge sales.  This must be part of their plan to reverse their poor financial performance.

Telstra has extraordinary market power and they have just showed that in relation to newsagents.  We will not do anything about the 20% cut because we would not want to lose their business.  They know that.  I wonder if they cut anyone else.

Our margin ought to have increased given the increase in our overheads – rent, labour and other costs.

I would like to know the commission paid on Telstra products sold in supermarkets.  On October 17, 2005, I wrote here that I had proof (in the form of an invoice) that a national supermarket chain was earning 16% commission from Vodafone recharge sales while newsagents were on 5%.  Maybe the same difference exists for Telstra.

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Ethics

Ah, the irony

It is interesting to see the folks at the Herald Sun get in a lather over the Police tracking contact between serving officers and Herald Sun Journalists which News International in the UK is defending their secret recording of politicians.

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Ethics

The financial and embarrassing cost of employee theft

I feel like an idiot. For years I have helped newsagents deal with employee and customer theft. I have spoken at regional newsagent meetings about this, I have helped police gather and understand evidence in several states, I have sworn affidavits as an expert witness, I have helped insurance companies verify claims. I have even published guidelines for newsagents on how to cut the cost of theft.

If only I had followed my own advice.

On Monday this week we discovered an employee theft situation at one of the stores with which I am involved. We discovered it when hunting down a discrepancy from Sunday’s numbers. Our Point of Sale software Audit Log provided excellent evidence indicating criminal behaviour. Our linked camera system provided the visual proof we needed.

The rest of Monday and Tuesday were spent researching how long this had been going on for. We were shocked – and this is when I began to feel like an idiot. The evidence indicated that upwards of $20,000 had been stolen.

Following discussions with the police and our insurance company I approached the person involved. Within two hours we were paid $12,000 as settlement of the matter.

While we may have got more by pursuing it through the police, the costs to us would have been considerably higher, it would have taken longer to get paid and there would have been a knock-on impact on our insurance policy. There was also a risk that we would get far less.

Having worked with police previously, I knew there would be a challenge on what they would consider admissible evidence. The recent camera footage and companion data from the computer system is good. While this establishes a pattern of behaviour, it is a challenge to get a court to accept that this was going on months or years before to determine the quantum of the theft.

The best way to cut the cost of employee theft is to:

  • Regularly review your audit log – if you have the Tower Systems software.  I’ll not go into details here for obvious reasons.
  • Twice a month select random shifts and carefully review sales counter staff behaviour.
  • Review your processes and eliminate any opportunity to adjust anything which affects cash in your computer system.
  • Be wary of employees who are over eager to work.
  • Once a month, unannounced, run a spot cash balance.
  • Consider blocking access to facilities which could facilitate theft.

I am embarrassed that this happened in one of my businesses. Hopefully, I have learned a lesson. There is no doubt that I am less trusting now.

Anyone who wants to know how the theft was done is welcome to call me on 0418 321 338 or email me at mark@towersystems.com.au for details.  I have a document with practcial suggestions on how to determine whether employee theft is a problem in your business.

Newsagency employees reading this post who are stealing from their employer, resign because you will ultimately be caught.

Footnote: before anyone says that they have a computer system which blocks many types of employee theft, ours does too. My view is that is someone is desperate to steal from you they will avoid the technology and find another way. By not erecting all of the barriers I could have in this business, it was easier for me to gather evidence and, ultimately, fix the problem.

I am happy to talk to any newsagent about what happened and how we discovered it. The more we share this information the better.

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Ethics

Lying to get your business

Some sales representatives who call on newsagents will do anything to get you to buy their products or service.  Newsagents would know who I mean – they are the sales people who try and win business by lying about the competitors.  It’s their point of difference.  I am talking here about outright lies and not just tough competitive positioning.  It speaks volumes for their belief in their own product that they focus on the competitors more than themselves. Thankfully, business won this way often bites them sometime down the track.

There is a bit of lying going on right now and, no, I am not about to name names or companies.

If a supplier representative says anything to you about a competitor of theirs, ask them to prove it.  This will soon shut them up.  Better still, go to the company or person they are speaking about and let them know – it is what you would want if it was you they were talking about after all.

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Ethics