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Ethics

The ethics of deleting stock records when you sell your newsagency

Would you buy a car off the lot without fuel?  When you buy a newsagency you can reasonably expect to be buying the business in its then existing form: shop fit, stock, customers. It is also reasonable that you expect to be buying information necessary to run the business.  Information is the fuel of any good business.

This is on my mind today because of a newsagency which was sold recently where the new owner discovered that the sales history and other business data had been deleted, leaving nothing with which to compare the performance of the business or to guide business decisions.

The people buying the newsagency have been denied access to a key asset which they assumed was part of the purchase. Their job for the next year has been made more difficult. They have no sales history at all.  They didn’t want confidential customer account data, just information necessary to properly manage the business.

The people selling the newsagency decided to delete crucial business data for their own reasons. They would have known the cost to the new owners of this data not being available.  Their choice has hurt the business they called home for years.

My recommendation if you are buying a newsagency is that the sale contract includes a special condition along the lines of:

The seller agrees to not delete, remove or change in any sales, stock of customer history or data stored in the business computer system or manual records without the written permission of the purchaser.

While such a clause may be more onerous that some newsagency sellers would want, use it as a discussion point.

Industry associations should play a role here and ensure that the business settlement addresses this and other issues – especially since they have commercial relationships with newsagency brokers.  The future of the channel depends on new people coming in.  One way to ensure this is to offer some guidance around change of owner best practice.

When a newsagent sells their business they are selling the business as it operates. Data is crucial to business operation. Selling an operating newsagency without historical data is like selling a car without any fuel in the tank.

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buying a newsagency

The $50 ethical dilemma

We were offered $50 to allow someone to weigh packs of AFL collector cards (not the newspaper cards) so they could find packets with premium cards and buy just these. Premium cards weigh slightly more than regular cards.

We said no thanks as we felt it would be unfair to our regular customers, the kids who will buy more than a thousand packs over the season. They save to build their collections and hope to get one of the premium cards.

While not one of life’s big ethical dilemmas, it is an interesting question – what price to veer off one’s moral compass.

There will be some who are happy to take the $50 and allow the boxes to be weighed and purchased. It’s a completely personal decision. That said, if we put our customers first then we have to say no to the $50.

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Ethics

Those damn Nigerian email scammers

Maybe it’s a seasonal thing.  I and several other newsagents with their contact details online have received “orders” by email in the last couple of weeks from scammers wanting to purchase products to be paid for by credit card.  What is interesting is that the items they have requested we do usually carry.  They have some some homework on our range.

My advice to any newsagent approached to ship goods overseas with payment via a credit card is don’t engage.  Odds on it is a scam.

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Ethics

When the magazine poster becomes the product

fhn_empire_poster.JPGThe poster for the latest issue of Empire magazine is saleable based on the interest from customers for posters for Girlfriend, Dolly and other titles recently featuring Twilight relates images.  While the poster is promoting the collectors issue of the magazine, I could easily offer this as a collectors poster.  We are planning a Twilight display covering magazines, the game, the puzzle, the calendar and gifts so the poster and other collateral will be put to good use.  Whether to offer this and other Twilight posters for sale is a moral dilemma I am sure other newsagents face.

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Ethics

New magazine cover stars

fhn_jackson_kids.JPGThere has been huge interest in the photos of Michael Jackson’s three children.  Customers buying the latest issues of Who and OK! mention them – more so than any other cover I can recall.  Hearing one such comment yesterday, it felt like a passing of the guard.  If this interest is maintained, Paris, Prince Michael and Prince Michael II will be the next big  global magazine cover stars.

Magazines need new global stars.  We need new global stars to drive interest in the magazines we sell.

While I feel for the kids, I suspect that the Jackson engine understands their value to the family business and will ensure that they do their bit to support the business.

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Ethics

Newsagents act on Quadrant magazine

Newsagents are taking action against Quadrant magazine and its shoddy treatment of these small business owners used for the retail and distribution of the magazine.  I have heard from many who are now refusing to carry Quadrant on their shelves.  Some are writing to the Chairman of the Quadrant Magazine Ltd Board of Directors – Elizabeth Prior Jonson.

We are used to publishers spruiking subscriptions in the pages of magazines they sell.  Quadrant goes beyond spruiking in the latest issue of the magazine – they put down newsagents.

Quadrant, like around 65% of the magazines newsagents sell, is cash-flow negative for us.  It is a titled we carried (literally) to support range. I suspect they will soon discover the cost of their public ridicule of the newsagent channel.

FOOTNOTE: The last maagzine to so blatantly attack its retail partners was Fisherman & Boatowner in 2007.  See what I blogged back then.

UPDATE (1530): Crikey.com.au covered this today.  Hopefully it brings more attention to the issue.

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Ethics

Selling magazine freebies as stock

magazine_freebies.JPGSome newsagents sell the free items removed from unsold magazines before they return them. A colleague recently saw a stack of magazine branded notepads for sale in a newsagency. Another saw a selection of tote bags. I have seen dump bins at the front of the shop with a selection of these gifts for $1 each. I even saw sets of cards from FHM magazine on the shelf next to other cards for sale.

I have been told by a newsagent that selling the magazine freebies is a way of rebalancing the magazine distributor “rip off”. I have also been told that it is better to make a buck from the junk than to throw it away. One newsagent was shocked that I would even ask why they sold the freebies.

Personally, I think selling the freebies disrespects a newsagency, its suppliers and the entire newsagency channel. It makes the shop look cheap. It trains the employees that it is okay to break rules and cheat suppliers – this could encourage them to cheat you.  It shows the owner sweating the small stuff.

We do not sell the freebies from unsold magazines in my newsagencies. We return the gift with full returns. For topped returns , we toss most of the freebies. Pens, pads and anything genuinely useful is given away to staff or used in the business – they are kept in an open box for all to access.

I would be interested in what others have to say on this topic.

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Ethics

Landlord calls in the legal team on opening early

What I thought was a cordial discussion with our landlord about their new tax on us opening at 7am three days a week got legal yesterday when their company solicitor wrote pointing to where in our lease they have the right to charge this fee and the basis on which they can levy it retrospectively.  Their claim for interest, if I do not pay this tax or delay payment, is a gem:

Please note that if you fail to pay these amounts in accordance with the lease, the landlord will have no other alternative but to charge you 2% interest on the outstanding amounts for every day, or part of every day that the amounts remain outstanding in accordance with clause 11.1.3 of your lease.

While the landlord may have a legal justification in the lease – I am no lawyer and cannot be sure – in today’s retail climate this tax is, in my view, an appalling imposition on a service business like a newsagency.  At 7am we are a service in our centre – for other businesses in the centre, for security staff and for customers.  Indeed, when I first took on this location in 1996 the landlord back then wanted to ensure that we would be open early.

While I know I could make a complaint to the Office of the Small Business Commissioner in Victoria, I have no faith in their ‘balls’ to robustly represent the interests of small business.

Since our ‘discussion’ with the landlord started, they have stopped opening the entrance doors to the centre – directly outside our shop – as they used to.  Now, they open them at 8am, greatly inconveniencing other tenants and early regular shoppers.  They are driving our customers away.

What I want is for commonsense to prevail.  Landlords and tenants need each other.  They rely on a successful newsagency to provide a service in the centre and do its fair share of lifting when it comes to attracting customers.  By chasing charges such as a penalty for opening at 7am when it does not add to their costs – they say it does but I disagree – disrespects the bigger picture in play here.

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Ethics

Australia Post lets fellow tenants down

auspost_fh_satclose.JPGThe government owned Australia Post shop opposite our newsXpress Forest Hill store has changed its hours on a Saturday.  It now closes at 1pm.  Tenants in a shopping centre have an obligation to support each other.  We rely on the traffic Australia Post pulls as do other retailers nearby – indeed we rely on each other.  It is the government ownership of Australia Post which allows them to get away with this arrogant behaviour.

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Australia Post

Bushfire benefit lottery draw

tatts_bushfire.jpgThe initiative from Tattersalls to donate their proceeds from this Saturday’s Tattslotto draw to the Alfred Hospital Burns Unit in support of the Bushfire Appeal is excellent and deserves kudos. I especially like that they have been transparent in their press announcement about what they expect to make – $3.5 million.

That said, I know some who will have an issue with promoting gambling as a way of raising funds for bushfire relief. I’d be interested to know what others think – especially as a retailer. Do we go hard and encourage gambling? I ask this because the fundraising aspect will attract new customers.  I am genuinely interest in what others think about this.

Concerns aside, we are actively promoting the Saturday draw in-store and have created a series of syndicates to help. Indeed, we are promoting everything connected with fundraising for the fires – Who, New Idea, Woman’s Day – as well as continued promotion of collecting loose change for the Red Cross.

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Ethics

Retrospective billing for magazine returns freight

Newsagents on the Central Coast of New South Wales are reporting that freight company 1st Fleet Express has issued accounts which apply an increase in their fees for collecting unsold magazines, returns, by 66% and applying this increase retrospectively.

NANA, the state association representing newsagents in NSW is right on to this issue and has advised newsagents:

We strongly suggest that Agents effected by this increase contact 1st Fleet Express (Mr Paul Rowe Executive General Manager Ph 133040), and advise him, in the absence of any prior advice indicating any increase to rates, their invoice will be paid at the rate of $3-00 per carton up to and including the date of the account received.

The retrospective billing goes back months from what I am told.  If true this is appalling behaviour.  Newsagents need to follow the NANA advice.

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Ethics

Newsagents embracing selling cards with music downloads

Newsagents are flocking to Cardplai, the greeting cards which are sold with music downloads as the gift. My software company, Tower Systems, has exclusively partnered with Cardplai through our eziPass software. We have done this work pro-bono for the benefit of newsagents. We were offered a cut of every sale but preferred to see this invested in newsagent margin and marketing.

Monday was a big day in the Cardplai launch as it is when software was turned in the many newsagencies which have taken up the offer. The days since have been busy helping newsagents navigate the finer points of activating Cardplai cards.

One POS Solutions user reported a problem with Cardplai running on their hardware running the POS software. We logged into their system, found the incompatibility between our eziPass and the POS software and made a software change to address this.

Cardplai is a terrific opportunity for newsagents to get something exclusive for their channel which is being advertised extensively. Since it is new there are bound to be teething opportunities from which we can improve the offer.  Newsagents say they want to be relevant in the changing world.  Cardplai is such anopportunity with little risk.

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Ethics

Officeworks sells stamps now

officeworks_stamps.JPGI was surprised to see stamps advertised as being available at Officeworks. When we applied for one of our newsagencies Australia Post refused. They said we were too close to one of their shops. I know of an Officeworks next to an Australia Post shop. I bet they have stamps. It is wrong for Australia Post to do a deal with Officeworks yet refuse an individual newsagent for being too close.

That said, I am not surprised as I expect the two businesses have ties elsewhere which were leveraged to make this deal happen.

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Australia Post

Newsagent charged $4,000 a year for software support

A newsagent called me last week to ask for help.  They received a bill for $4,000 for software support.  No, I didn’t tell them to switch to my software company, Tower Systems.  I advised them that I know of newsagents paying just $1,500 a year to their current software company for support (mediocre as it is). 

Software companies ought to treat all newsagents.  There is no justification to charge someone $4,000 and the newsagent in the next suburb $1,500 for the same services – such an approach preys on the weak.

Trust is key to the relationship between newsagents and their software provider.  Trust is demonstrated in common pricing for all.  In the case of this other software company, $1,500 a year software support is the benchmark they have established.

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Ethics

Truth about mobile recharge

The 300 or so newsagents using the Pos Browser software may want to contact the company about their claim today that they print mobile phone recharge vouchers through their software.

Tower Systems is currently the only newsagent software supplier able to offer mobile phone and phonecard vouchers, including for Optus and Vodafone, from within newsagent point of sale software.

UPDATE: Bernard Zimmermann has subsequently edited his blog post yet the implication remains that they print vouchers from their software.

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Ethics

Bill Express, who knew what and when

While the future of Bill Express remains unknown – the company extended its trading halt another five days today (groan) – the hunt for evidence and for people of interest by those behind several possible court and other actions continues.

Prior to joining the Board of the Australian Newsagents’ Federation in December 2003, I was provided Board minutes and papers for the previous year. This covers the period during which the Bill Express decision was taken. I have a dilemma around what I should or should not do with the information to which I am privy. In navigating my dilemma I need to consider my obligations to the “Company” as well as my obligations to its shareholders, newsagents. These considerations are complex for many reasons. I am certain that I am not the only former Director or officer of the Association with the same dilemma.

At least three legal briefs are being prepared around the issue of whether newsagents were deceived or misled into signing agreements for the Bill Express service and if so by whom. At least two Government agencies are asking questions of newsagents and others who may have evidence on which a case could be built. Three reporters are asking questions, two about the company and one about what due diligence was done (or not done) prior to the offer being put to newsagents in 2003. As I said, this is complex.

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Bill Express

The dark Bill Express screen

be_screen.JPGI was surprised when Bill Express announced their deal with the Swish group last month about in-store advertising screens. This was the day before Bill Express sought suspension because of a supplier dispute. The Bill Express / Swish deal trumpeted a combined massive network and talked up expectations. 3,500 newsagents knew otherwise. We knew that Bill Express had failed to get even close to the claims it had made to them around revenue from the in-store advertising screens. Many of us saw the ASX announcement as more spin to ignore.

(ASX:BXP) subsidiary, Xip Media Pty Ltd, to sell advertising onto its extensive digital signage network which operates over 5,000 video screens in approximately 2,200 newsagencies and convenience stores throughout Australia. The agreement applies to all existing Bill Express newsagencies and any future sites and will, when combined with the Swish Group digital signage network of approximately 1,900 screens in 1,800 venues, make it the largest digital signage network in Australia with approximately 7,000 screens in 4,000 venues. The combined Swish Group/Xip Media network will be more than ten times the size of its largest competitor in the rapidly growing digital signage / out-of home market.

Key to the Bill Express pitch to newsagents years ago was the revenue opportunity from the in-store advertising screen. More than four years on this screen is clearly a dud. We initially had the smaller screen.

Close to two years ago they installed the big screen in the photo. It has been down more than 50% of the time. When it was working the ads were, more often than not, inappropriate for our customers – promoting products not in Victoria or products which do not speak to our customers.

The earlier incarnation of the screen angered us as much as other newsagents because it was promoting the payment of bills for councils in other states – it made us look bad. Some customers even joked about this.

While we reported the new big screen not working, nothing happened.

Key to the screen pitch was the revenue split opportunity Bill Express pitched to newsagents. I am yet to meet a newsagent who made money from this. The company backed itself by providing a monthly rebate for in-store advertising. This was dropped a few months ago along with other rebates to newsagents.

The failure of the advertising screens to live up to expectations is just another problem for Bill Express. I’d be surprised if the Swish deal proceeds.

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Bill Express

Government fails to lead on plastic bags

The State and Federal governments missed an opportunity to lead yesterday by not reaching agreement on the plastic shopping bag issue.  As I blogged here a month ago, many consumers prefer plastic bags.  This is why most retailers don’t levy a charge.  Government action makes enforcement easier.  While I am not keen on regulation, the only way to dramatically reduce plastic bag usage is through leadership from government.

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Ethics

The POS Solutions lie about eziPass

Bernard Zimmermann, Director of POS Solutions, has claimed on his company blog today that our work on eziPass is not being done for free. Bernard has knowingly published false and misleading information. While I’d rather ignore this, I have to make it clear that eziPass is free.

My software company, Tower Systems, has developed eziPass and borne all costs. We make no commission, rebate or any benefit from transactions on eziPass. We receive no compensation from sign up. Nothing. Bernard knows this. He and I have personally discussed it.

What Bernard has published today is disappointing and will confuse some. I guess that he has done this because it’s the only way he can try and pull focus from eziPass.

Plenty of POS Solutions users are about to start using eziPass, it is available for all newsagents and is free.

UPDATE (5:19PM)  Bernard has posted more on his blog this afternoon about this.  True to form, it is inaccurate.  Bernard is not banned from this blog, no one is.  Any comment he posts here is published without change.

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Ethics

The ethics of blogging

Howard Owens has an excellent blog post on information ethics in the context of blogging (among other things).  His words are an excellent reminder to all bloggers and those who comment on blog posts.  Here is part of what Howard wrote:

The information ethic begins with each person who both understands the power of information and the scourge of misinformation.

This is a role not solely for journalists, but journalists as the paid purveyors of information must not slip in adherence to high ethical standard (the ethical burden on journalists has never been greater); this is not a role not solely for bloggers, but bloggers as the vanguard of a new information river, must take on the burden of protecting and cherishing information; mostly, this is a role for all participants in the conversation, both the creators and the followers.

Not all participants will rise to the occasion, increasing the burden on those of use who recognize the responsibility.

The information ethic requires that we strive always for honesty, transparency, accuracy and fairness.

Howard is right about the role of bloggers and our obligation to protect and cherish information.  While in this place I’m occasionally engaged in competitive positioning, I accept the commitment to honesty, transparency, accuracy and fairness.

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Ethics

The American Express turn off

hate_amex.JPGThis American Express stand has been outside one of our shops for at least two weeks.  I’ve bee harassed every time I walk past – and I do mean harassed.  They ask, I say no thanks and they usually come back with what, you don’t want to save money or how can you know you haven’t even looked.  If I walk past and ignore them they usually call after me with a smart-alec comment.  Do they not notice that I walk past several times in a day?  It’s a hard sell and it upsets our customers.  I have heard three people complain at our counter about the Amex people out the front.  The last thing retailers in a centre need is American Express and their aggressive recruitment tactics getting customers offside.  I wish they would go away and be banned from shopping centres.

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Customer Service

How to blackmail a newsagent

A newsagent colleague contacted me Monday this week to advise they had not received magazines from a distributor. Investigation revealed they had been put on stop because they short paid their account the previous month by $500, an amount close to (but below) the value of returns supplied which the distributor had not credited.

Rather than work through the problem, the distributor, without consultation or discussion, cut magazine supply to the newsagent. This attack on the cash-flow of this small business by the magazine distributor is, in my view, an abuse of power.

It is unreasonable in my view, over a $500 accounting dispute, several days after the dispute was raised, to cut supply to the small business newsagent. This newsagent has an eight-year good payment record, where is the respect for this relationship?

The distributor, later in the week, agreed to credit the $500 – after the newsagent paid it. However, they then demanded the latest account be settled two weeks early – all because the newsagent was chasing a credit for returns supplied. While the returns form may have been sent to the wrong address, there is no dispute that the returns were received on time.

What recourse does the newsagent have except to short pay the bill when a credit has not been provided as it should have? None. The distributor, on the other hand, is extremely powerful since they can cripple the newsagency, as they sought to do in this instance. What they did to this small business was blackmail.

No wonder some newsagents are leaving the channel and others are seeking professional help for depression and other mental illnesses. With bullying tactics like I have seen this week by this distributor I find myself questioning whether newsagents will ever achieve equity in their relationships with magazine distributors.

I approached the distributor at the request of the newsagent to try and get the issue resolved. The distributor refused discuss it with me. I take this as their preference to deal with a weaker party. It is appalling behaviour. I had the newsagent’s permission yet the distributor went to ground. My view is they did this because they knew they had no defence for their appalling behaviour.

The sad thing is that you won’t read about this appalling abuse of a small business by a big business in the press. Media companies protect each other. The blackmail experienced by the newsagent at the heart of this issue this week ought to be the subject of media scrutiny. Shows like A Current Affair investigate far lesser issues.

The newsagent involved is planning to complain to the ACCC. While I support and encourage this, I see it as a waste of time. The ACCC has demonstrated it cares little for the plight of newsagents at the hands of magazine distributors.

The story I have recounted here is not the only one of its type this week. I would estimate that there around 150 newsagents on stop over accounting ‘issues’ at any one time. I’d estimate that around half are due to unfair treatment by the distributor involved.

Events like this are disheartening for newsagents. They demonstrate the inadequacy of the regulation of the Trade Practices Act. They also demonstrate the disregard this major supplier has for newsagents.

A sad week for all I’d say.

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Ethics

It’s not quite poaching

Receiving an application from someone working for a colleague newsagent presents an ethical dilemma on several fronts. Do you tell your colleague newsagent? Do you let the candidate know?

In the past I have had a policy of not hiring someone currently working for a newsagent I know without their knowledge. I can see this could be unfair to a candidate who does not want their current employer to know they are considering moving on.

On one occasion years ago I let a Tower Systems client newsagent know one of their employees had applied to us. He got grumpy so we did not even proceed to interview – even though the candidate seemed ideal for us. He sold the business a few months later and she was out of work.

We have developed a process for handling the situation. We let the candidate know that we know their employer and given them the opportunity to ask us to not contact them. This respects their privacy and offers an opportunity for them to put any issues on the table. We feel this is a better approach than talking, without their knowledge, to their current employer.

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Ethics
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