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Ethics

This could be why Tatts has asked its retailer franchisees for employees to provide details

I write this post a year ago. It is relevant today because Tatts has just contacted franchisees seeking access to information many small business owners would not consider its right to have…

Newsagents have been wondering why Tatts is expressing interest in employee arrangements in newsagency businesses. I have had plenty of questions and I know others have too.

This situation has come about because of the federal government passing vulnerable employee legislation following the 7-Eleven debacle. The Fair Work Ombudsman website sets the scene:

On 15 September 2017 the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 took effect. It makes the following changes to the Fair Work Act 2009external-icon.png (the Fair Work Act):

  • increase penalties for ‘serious contraventions’ of workplace laws

  • make it clear that employers can’t ask for ‘cashback’ from employees or prospective employees

  • increase penalties for breaches of record-keeping and pay slip obligations

  • employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove wage claims made in a court (this is also referred to as a reverse onus of proof)

  • strengthen our powers to collect evidence in investigations

  • introduce new penalties for giving us false or misleading information, or hindering or obstructing our investigations.

Read what the Fair Work Ombudsman website has to say about franchisors that have a significant amount of influence or control over the business affairs of the franchisee:

These changes apply from 27 October 2017.

Franchisors and holding companies (a company that has control over subsidiary companies) can be held responsible if their franchisee or subsidiary doesn’t follow workplace laws about minimum entitlements, the National Employment Standards, awards, sham contracting, record-keeping and pay slips.

This will apply to franchisors that have a significant amount of influence or control over the business affairs of the franchisee.

Franchisors or holding companies could be liable for breaches or underpayments if:

  • they knew (or could have reasonably known) that a franchisee or subsidiary wasn’t following workplace laws
  • they didn’t take reasonable steps to prevent it.

We are working with franchisors, their advocate and advisers and will have more information in our Help for franchises section when the changes take effect.

Tatts is acting because of an understanding of that term – significant amount of influence or control over the business affairs of the franchisee.

It’s not only Tatts caught in this. Any business that can be claimed to have a significant amount of influence or control over a downstream business is in the cross hairs.

I think there will be plenty more news and engagement about this in the channel river the next few months.

The challenge is the definition: significant amount of influence or control. It is not as clear as it could be. Some politicians say the Fair Work Ombudsman has overreached. We will have to see how that plays out.

There is plenty of advice online outlining the obligations for franchisors and organisations like Tatts outlets.

For a government that said it would reduce red tape for small business, this legislation is considerably adding to it.

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Ethics

Complaints from newsagency shoppers

Over the years, I have received complaints from newsagency customers about an experience in a newsagency. They have contacted me through here as other points of contact have not been obvious to them.

If I have contact details for the owner, I usually pass on the complaint. I always respond to the person making contact, suggesting other avenues for their complaint.

Here is a complaint I received recently:

I want to complain about the newsagent is [        ]. They are very intimidating and they harass customers from other stores that are good people.

They make trouble by gossiping about certain people of low economic backgrounds, people that are poor and about people who go to the chemist across from their store.

I have been humiliated and I have been threatened. I have heard them lie too.

I don’t want them to know my details as I am  afraid by complaining about them they might get me kicked out from the shopping centre.

This is the third complaint in the last year from this business. It is a newsagency with which I have no connection. I passed the first two complaints on to the owner without response.

While complaints like this are about a specific business, they reflect poorly on the whole channel and this is problematic for all newsagents. We don’t have a discipline mechanism. While some banner groups do, I don’t see it used much.

Retail can be challenging, customers can be challenging. How each situation is dealt with matters as the impact can be significant. Today, more than ever, customers are empowered with platforms readily available for broadcasting complaints and rating businesses. Often times, these complaints and poor ratings can be unnoticed by the affected business for a long time.

Here is a complaint I received Thursday night for one of my stores:

Hi,  Just wanted to let you know that there ate two staff on duty at your store right now. They’re having such a great chat that they let me stand at the counter looking for some help without even acknowledging me. Needless to say I left the store without purchasing anything. Might be an idea to recruit better staff in the future…

I  checked and advised that we only had one staff member on and they were helping a customer at the counter with a significant ($150+) order. Speaking with the staff member at the time, they advised the person making the complaint was acting suspiciously and that they approached them, thinking they were stealing.

We need to be cautious with every complaint, not to deny it but to get the facts where we can.

The purpose of this post is to lay the issue here for others to contemplate, and to share the first example of a specific complaint, in the words of the shopper. I am not saying what to do or that customers are always right, because they are not.

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Ethics

Lottoland noise continues

Lottoland continues to pitch regularly on TV and by email. Their latest pitch is around the $2.2B prize. I know retailers who are frustrated that the legislation did not force an immediate shutdown of these pitches from Lottoland.

There appears to have been no slow down in their operation – based on TVC airings and emails being sent.

I suspect each Lottoland pitch gets more people signed up and that has to be the core goal of the company – account openings.

Their email on the weekend also pitched a syndicate offer with a discount. It that it targets growing their reach through a familiar type of product. Lottoland is not showing signs of leaving any time soon and while their ads no longer mock newsagents, their pitch makes playing lotteries online look appealing … and that is the biggest challenge to retailers.

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Ethics

When an employee steals from your retail business

I was going through some old photos at the weekend and found one from twenty years ago of an employee who stole more than $15,000 from my newsagency.

The photo, taken at a work Christmas party, reminded me of the theft, which I had long forgotten. It was my first experience at substantial employee theft.

The theft was discovered when were chasing an anomaly in end of shift balancing following an unexpected roster change. A pattern of behaviour was discovered. This caused a question to be asked. Within twenty four hours there was an admission of theft over the previous year of $15,000. This was settled with a bank cheque, funded by their parents, and agreement of immediate termination of employment for then agreement that their partner was not advised.

Knowing what I know now, the amount stolen was sure to be considerably more than the advised $15,000. However, the lesson from the situation was far more valuable in that I learnt exactly what they were doing. This resulted in a tightening of the processes as wells changes to the software to make discovering such theft easier in the future.

We’d bee too busy worrying about big theft to notice small theft, $50 or $50 a day.

Back then, in 1997, cancelling sales in POS software was not frowned upon. There were valid reasons you might cancel a sale. Discovery of the theft revealed that it was a common way to steal small amounts from a business that might not be detected in a P&L analysis.

The software was changed and the business management processes I required changed for my shops. It is now much easier to detect theft and businesses that want to block cancel sales can – although, I recommend against this as it continues to be an excellent indicator of employee theft. In fact, the software changes have been on-going in that this first theft experience established my interest in the area and commitment to help independent retailers reduce the cost of theft.

Being stolen from by someone you trust, someone you count as a friend, is gut-wrenching. It can also be a defining moment from which you learn and act, to ensure it does not happen again. That is how it played out for me in retail as well as in POS software development. For that experience I am certainly grateful.

I kept the photo as it is a useful reminder of what a thief can look like.

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Ethics

Why you should not use your card company, or any supplier, as a source of capital

For decades, some card companies in Australia have loaned capital to newsagents in the form of cash, or fixtures or equipment items as an incentive to sign long-term agreements. Some other suppliers have done this too.

Most loans are repaid through rebates, discounts off purchases, through the term of the agreement. Some are paid off through regular, non transaction related, payments.

Card companies have used the financial assistance offer as a carrot to win new business. It has worked well for them and for newsagents who may not have been able to easily source capital elsewhere.

For years, whenever I have been asked by newsagents or someone entering the channel about tapping a card company for funding, I have said don’t do it. That remains my position today.

Supplier provided capital funding comes at a cost. Some agreements I have seen, are unfair. In one case last year, the agreement I saw had a real cost to the business way above reasonable interest rate level. It was structured to roll on as a significant handcuff to the business with the fixtures involved having a book value eight years on when they should have had zero value by then.

I appreciate there can be challenges in raising capital in small business. In my experience you are better off without supplier funding than the challenges that can come with having it.

However, if you do go down this path…

  1. Do your homework.
  2. Do not rush.
  3. Understand all of the documentation.
  4. If in doubt, get legal advice.
  5. If the agreement asks you to acknowledge that you have had legal advice, make sure you get it.
  6. Do not sign if you have any doubt whatsoever.
  7. Make notes of all supplier representations leading up to the signing of the agreement.
  8. Keep a copy of the signed agreement and your notes from the time together in one place.
  9. Fulfil your obligations under the agreement.

The time issues arise from supplier funding agreements small business owners are usually at their weakest. Protect yourself from this by doing the necessary legwork up front and ensuring you fully understand what you are walking into prior to signing anything.

Card companies and suppliers have not set out to get people. Circumstances have seen it look like it though. With personnel changes as they are, it is only there words on the page with your signature that matter if there is a dispute. This is why records you keep can be vital.

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Ethics

How can Tatts rescue its relationship with newsagents?

Tatts needs to do something pretty amazing to rebuild its relationship with newsagents. The damage done over the last ten or so years, until the takeover by Tabcorp, was significant.

Urgent action by the management people a Tatts is needed to get newsagents and other small business lottery retailers back on side.

Here are a few simple steps that Tatts could take that would, in my view, immediately improve the situation and, most likely, improve revenue:

  1. Move focus to sales with same store year on year sales being the only metric for measurement of performance.
  2. Stop assessment visits. Stop penalising retailers for infractions such as other products on the counter and other ‘infractions’ that are yet to be shown to be detrimental to sales.
  3. Introduce a modest financial reward for year on year growth.
  4. Encourage leveraging the Tatts space in-store for other products.
  5. Make it easier for shoppers to find their local retailer on all Tatts digital touch points.

This is not a big list. It would not cost anything to implement. Tatts could even trial it nationally to June 30, 2019 and see how it performs.

By making it a trial, Tatts encourages buy-in from  the whole retail channel so the moves are a win at the local business level and a win for Tatts.

I doubt any of the five items on the list would have a detrimental impact on sales. In fact, I think they could have a positive impact. All it would taker is a management decision by Tatts to trial this list or something similar. It would a good next step to resetting the relationship, respecting the retail channel and showing that the relationship has moved on to new times.

Revenue is what matters to Tatts and to retailers. The current approach is handled at the store level in such a way that it can be a disincentive. It also lacks respect. The approach I suggest respects the local business owners and acknowledged a shared objective.

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Ethics

New lottery outlets impact the value of an existing businesses

Imagine the impact on your newsagency with lotteries if a new outlet opens a few minutes walk away.

Imagine you’ve worked hard for years to build up your business, traded through tough economic times and here you are experiencing nice growth and, finally, feeling that your head is above water.

And then you discover a new competitor, a business just like yours, with lotteries is to open and, for sure, take some of your customers.

In these weeks or months when you know a competitor is coming it can do  your head in as you worry abut revenue leaking from your business, growth you have achieved being wiped off. It can be distressing and can have you looking at the situation in an unhealthy way.

Once the competitor opens you have a new target, the new business. Even though they are new, and maybe new at business, it can play on your mind and have you acting irrationally.

I have never seen support from Tatts for this situation, where they have approved (encouraged?) a competitor to open close and take business from you.

This scenario of Tatts approving a new outlet close to a existing outlet is not new. It’s happened before. It’s happening now. It’s set to happen again.

I get that Tatts has the right to appoint new outlets and needs to do so as part of its business plan. However, from what I have seen, their process of deciding on new outlets, especially those close to existing outlets, is not transparent and can harm small family businesses.

There is no reasonable and independent path of review or appeal. Tatts is investigator, judge and jury. The small business negatively affected by a plan by Tatts to approve a competitor outlet is weak compared to Tatts in the process.

While I am no lawyer, from what I can tell it is a state or territory issue if a business owner wanted to agitate on this. Points of compliant and agitation could include tribunals such as QCAT, VCAT and the CTTT, small business ombundsmen, small business commissioners and, maybe but it is a long shot, state / territory gaming commissions.

I would like to see Tatts agree a code of conduct that offers structured measurable criteria for Tatts assessing and approving new outlets and that respect the position off any existing nearby outlet within a reasonable distance of any proposed new outlet. This process needs to respect existing small businesses ahead of any benefit perceived buy people at Tatts.

If I’m wrong in what I have written here, if Tatts does have processes I suggest they establish, please outline them in comments below.

Footnote: I don ‘t have lotteries in businesses I own for several reasons including this one. I don’t want a business that is easily impacted by decisions by a core supplier. A newsagency without lotteries can thrive.

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Ethics

Fake licence products hurt ethical retailers

A competitor of one of my shops sells fake licence product for considerably less than the authentic licence products we sell. They have done it for some years.

While the landlord was unconcerned about fake products being sold in the centre, the licence holder was more engaged. However, they did not proceed with legal action because of the cost. The challenge was determining the source.

For licence holders it is a border force issue. Since the majority of containers coming into the country it is easy to get fake licence product into stores without the provenance being easily untangled.

At a recent gift trade show I saw the problem first-hand. There were a couple of suppliers with mid-tier licence products that were fake. By mid-tier, I mean not a popular licences as anything from Disney or similar. For sure the licences were strong and valuable, but not at a level or of a volume that the local licence representative would take action. and I think that is what they gamble on.

The challenge for retailers is being sure that what you stock is the real deal. Price is one way of checking. Branding and packaging are other ways. Another check you could do, if you have time, is at local indecent discount variety stores and independent tobacco shops. I have seen fake products in both types of stores.

in our marketing we pitch authenticity and we educate shoppers on how ton spot fakes in some product categories. In our experience, taking the high stand like this builds trust. This is important to return customers, those building collections within the licence.

Stocking licenced products can be a challenge because of unscrupulous retailers and importers. However, it can be worth it if you go in with your eyes open and have strong processes to counter fakes.

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Ethics

In my opinion, the Mark Knight cartoon published in the Herald Sun is racist

I am disappointed News Corp. management permitted the publishing of the Mark Knight cartoon of Serena Williams in the Herald Sun today. What I see is a racist cartoon that panders to a racist agenda News Corp tabloids favour.

The cartoon is not funny.

Knight has been out in the media today defending the cartoon. If the cartoon was abut a hissy fit then he could have made it about that. Instead, he made this race-hate piece.

While we newsagents are not censors, I am not happy selling a newspaper with this in to. However, I take comfort that I am not in Sydney and having to sell the Daily Telegraph, which is more trashy more often.

Did we take the Herald Sun off the shelves? No. As I noted, we are not censors. Knight has a right to create a racist cartoon and News Corp. has a right to publish these. The best thing we can do is not buy the product.

The executive chairman of News Corp. has entered the discussion:

Ebony magazine makes a good contribution:

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Ethics

Lottoland going nowhere, building their database

On TV the other night Lottoland claimed 700,000 Australian customers. Their pitches have not slowed since parliament set a date for their closure in Australia. Emails like this one in the image show clever campaigning on their part to get punters to part with their cash.

I wonder if the marketing is all part of a plan to remain connected with these shoppers long after the sunset of their traditional Australian offering becomes illegal. Nothing else makes sense.

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Competition

The other type of wage theft that hurts small business owners and work colleagues

While there are plenty of reports at the moment about wage theft by businesses, there is rarely reporting about the other wage theft, the theft of paid hours from a business by employees.

The stories or wage theft and related matters about 7-Eleven, high-profile restaurant corporations, Lush and other businesses are awful. Any business engaged in such activity ought be prosecuted.

However, when it comes to the other wage theft, the theft of paid hours from a business by employees, there is not much employers can do. The sickie is a national tradition, something that is joked about alone some employees.

In full time work, it is common to have ten personal days a year. These used to be called sick leave. Now, they are personal days and the opportunity for regulation by businesses is limited. While we employers can have some rules around medical certificates, the opportunities are limited.

There are some employees who take their full allotment every year, some with extraordinary regularity. If they are doing this without being ill or having a genuine reason for use of the personal day, it is wage theft from the business.

While this type of wage theft from a business by employees is rare, in small businesses especially it is noticed and has a high cost. It is noticed by colleagues and by the business owners. Indeed, it can be a reason a workplace adjusts its employee model from full-time to more casual employment.

Personal leave is there for legitimate reasons. Taking it for an extra day off uses a day that may be needed down the track for a genuine reason.

As an employer, I think the best hope for resolving paid hours theft from a business by a full time employee  is peer pressure … pressure from colleagues on those who are abusing personal leave, pressure on them to use personal leave legitimately, to stop stealing paid hours from the business. I say this because work colleagues are usually the ones who have to cover workload, they are also bearing a cost from an employee taking a day off because they are hung over, want to stand in line to buy something or are too lazy to work that day.

In my years owning a business, the percentage of employees stealing paid hours is very small. However, in small business it is noticed. A $250.00 for a day off can cost $500.00 and more in sales to make up. Thinking about that and thinking about how we would handle a customer stealing $500.00 worth of items in a day can bring the issue into focus.

In reality, employers may complain about it but, usually, they (we) sit and watch it happen, because there really is little we can do and because the vast majority of the team do not abuse personal leave, for which we are grateful.

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Ethics

Lottosend, another lottery competitor for lottery retailers

I received an email yesterday from Lottosend yesterday, promoting a service whereby they purchase lottery tickets to order. This the first I have heard of them. I can’t find any Australian news stories abut them.

What they appear to offer is different to Lottoland and the other lottery betting products. Their offer is to physically purchase tickets and collect winnings. Check out this, from their website:

Lottosend is an online lottery ticket service that offers a simple, trustworthy and comfortable way to take part in the biggest and most popular licensed lotteries in the world, like the EuroMillions and Mega Millions.

Our mission is to provide customers from all over the world with the opportunity to participate in some of the most popular lottery jackpots from the comfort of their PC or mobile device.

Our team includes a group of professional experts with a wide spectrum of skills gained from years of experience in the gaming and lottery industry, meaning you’re in great hands.

Our new website offers a seamless way to play licensed lotteries. Just choose your preferred lottery, select your favorite numbers or use our easy Quick Pick tool to purchase your tickets.

Once you’ve bought your tickets, our team of local agents will do the rest, carrying out your order at an official lottery retailer and scanning a copy of your ticket into your account. Then we’ll notify you of any winnings.

Their website has more details on the service. It all sounds to me complex and convoluted. I can’t understand why anyone would sign up for it. Especially how they handle prizes and cash withdrawals – as it it appears it is only then they check that you are who you say you are. I guess the lure of a big prize is a factor their business plan.

Lottosend is another player in the online lottery space. Their presence will continue to drive lottery shopper interest in online purchase. This is not good news for retail lottery outlets.

My message to newsagents is to be aware of this new competitor and because of this to focus on customer service, demonstrating the value of face to face service.

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Ethics

Is Fairfax ignoring newsagents with newspaper cover price increase?

A distribution newsagent advises the cover price for the Sydney Morning Herald (and The Age?) will not provide an increase in revenue for newsagents.

Newsagent income from newspapers used to be a percentage of newspaper cover price. When the cover price went up, so did the money made by newsagents.

The model changed with to a fee for service model from what I understand.

It will be interesting to see if newsagents take action against Fairfax in retaliation against their price move since this price change announcement is a reminder to them of what they lost.

I do wonder if supermarkets have lost in the same way.

I know of newsagents who have quit papers because of falling traffic generation and falling commercial benefit to their businesses. Makes sense.

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Ethics

Magazine distributor Gordon and Gotch blocks small business newsagent return of AFL Team Coach product

This communication from Gotch to a newsagent yesterday demonstrates the lack of control newsagents have over magazine supply inn their businesses. This drives lack of reasonable control over labour cost, space cost, shrinkage cost and cashflow cost.

The newsagent, for reasonable commercial reasons, decided to return the title. Here is the Gotch response:

Subject: AFL Team Coach Product 7231831

We have received your request for a return on AFL Team Coach Product (either Cards or Albums or both). At this stage, your return has not been processed. As you are probably aware, Team Coach product is extremely sort after and you should be able to sell all stock received to date. On this basis we would like you to reconsider this request and hold on to the product. Also, you will not receive any further stock from us so you will only need to sell what you have received to date.

However if you still would like to return the product, please email our National Contact Centre with the following info at contactus@gordongotch.com.au. However please DO NOT send back any stock with your regular Gotch returns until we respond to your request.

1. Product type (Cards or Albums)
2. Account number
3. Qty being Returned

Regards,
Gordon and Gotch

What a poor response and a waste of time for the newsagent on tiny margin product.

There should be no approval needed. This product is sale or return. The newsagent has no control over supply. Gotch needs to be responsible.

No wonder newsagents are reducing their space commitment to circulation product.

Until newsagents are treated with fairness and respect, like business partners, magazines will continue to fade in relevance. This can be reversed. It would take publishers pressuring Gotch to fix their systems, once and for all.

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Ethics

No wonder people are placing fewer classifieds in newspapers

I had cause to place a death notice in a News Corp. newspaper early last week. The website was clunky. I selected a price point based on the word count but the website dropped me to a lower word count and then bumped me up to where I was in the first place. It was cumbersome and frustrating.

However, that is not my main complaint. Here it is…

In the death notice there was mention of a memorial service, within the word count limit. They would not permit this. Either I had to create two separate ads, one in death notices and one in funeral notices for a higher cost, or move the whole ad from death notices to funeral notices.

Due to an apparent arbitrary rule of News Corp. I either spend more on two notices or end up in a category that I considered inappropriate. This is a rule of yesteryear, a rule that, to me, demonstrates why fewer people run classifieds in newspapers.

It is not as if the mechanics and structures of the classified columns will not permit memorial service details in death notices. There is no reason for the rule from what I can see except to maximise revenue for the publisher.

What is interesting is that I ran the same ad in a small local regional newspaper, not part of the News Corp. world, and they accepted and ran the ad without issue. In their world a death notice can include a memorial service notice. Indeed, the experience with the regional publisher was simpler, faster and more enjoyable than with News.

Based on my personal experience with News Corp. classified ads, I think it is a broken out of date business that charges as if it is the only platform for these life moment notices. Thankfully, there are more options, which can be used depending on the generation one wants to reach with such a notice.

For all their focus on digital delivery, pay walls and more, News Corp. has their classifieds business rooted in the past, in an era when print was the only platform.

19 likes
Ethics

Advice on reducing the cost of employee theft in retail

Theft is something to be managed in any retail business. Retailers are  stolen from by employees. Good management is about reducing the opportunity for and instances of theft.

Follow this revised and refreshed advice and the opportunity for theft will be lower and the certainty of detecting it higher.

  1. Value employees. Experts say this is the top step to take.
  2. Share information. Often, theft can be driven by a misconception about the profitability of the business. Sharing accurate business performance data can educate against theft.
  3. Do your end of shift through your software and have a zero-tolerance policy on being over or under. Reconcile banking to your computer software end of shift. One business where this was not done was being skimmed regularly for $200 a day.
  4. Change your roster. Sometimes people work together to steal. One retailer found a family friend senior and their teenage daughter stealing consistently.
  5. Check GP by department. If GP is falling outside what you expect, research it further.
  6. Demand the cash drawer be closed after every sale. A drawer left open is an opportunity.
  7. Keep the counter clean. A better organised counter reduces the opportunity for theft as it makes detection easier.
  8. Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
  9. Beware employees who carry folded paper or small notepads. These can be used for them to keep track of how much cash is in the register that is theirs – i.e. not rung up in the software.
  10. Beware of calculators with memories at the counter. One retail business employee used the memory function to track how much cash had to be stolen prior to balancing for the day – cash from sales not rung up.
  11. If you sell tobacco products, use stock control. Enter new stock as it comes in, scan all sales and only reorder based on what you software says. Every month do a stock take. Popular daily items such as tobacco stock discrepancies are an indicator of theft. Had one retailer we work with been doing this they would have caught their $250 a day employee theft months earlier.
  12. Scan everything you sell. Do not use department keys as this makes it easier for employees to steal since they know there is no trackback to stock on hand. Using department keys is an invitation to steal.
  13. Do spot cash balancing. Unexpected checks can uncover surprises. One retailer needing to do a banking during the day uncovered a $350 discrepancy that lead to discovery of systematic theft.
  14. Check your Audit Log. Look at cancelled sales, deleted sales and items deleted from a sale. Leaving a cash drawer open from the previous sale, scanning items, taking the cash and cancelling the sale is the most common process used by employees to accrue cash they then take from you. Good software tracks cancelled sales and what was in them. This can be matched with video footage.
  15. Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it.
  16. Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
  17. Be professional in your management of the business. The more professional your approach they less likely your employees will steal as they will see the risk of being caught as high.
  18. Advise all job applicants that you will require their permission for a police check. From the outset this indicates that you take your business seriously. In many situations applicants who have been asked for permission to do a police check advise they have found a job elsewhere.
  19. Do not take cash out for your own use in front of employees. If they see you take cash for a coffee or lunch some will see this as an invitation.

These steps work – based on decades of helping small business retailers to reduce and manage employee theft.

Theft, employee and customer, costs a typical small / independent retail between 3% and 5% of product sales revenue.  Management attention can cut this dramatically.  It does not take much time. No, it is more about having professional processes in place which everyone in the business follows.

14 likes
Ethics

Supplier distress

A wholesaler who supplies a range of small business retailers including newsagents with whom I have never had any contact or commercial engagement called me late last week to discuss debt collection challenges. They have been owed more than $20,000 by five different newsagency businesses, with which I have no connection, for more than four months.

The purpose of the call was to talk through options.

Theirs is a small family business, with annual turnover of around $350,000. They are not strong on credit checks. They prefer to take people at face value. The $20,000 in bad debts is hurting.

The goods were supplied on time and in good order. No credit claim has been made. They know from personal visits that in three of the shops the goods have been sold.

The supplier is contemplating taking action. however, they question the value of the time and cost investment for the relatively small amount in each case.

What was interesting from the supplier was the comment that they think in at least several cases, the newsagents involves moved from supplier to supplier, buying on credit knowing they could not pay and expecting they would not be pursued for relatively small levels of debt. I don’t know if this was the plan of the newsagents in question,. However, it is concerning that the supplier thinks it was.

This small business supplier I spoke with is distressed. They say others are too. This is not good news for our channel in terms of reputation and in terms of supplier strength.  We need successful suppliers. A reduction in number will only hurt newsagency businesses.

I write about this today because the supplier asked me to, to see what conversation follows.

16 likes
Ethics

Lottoland’s Tuesday jackpot looks very much like OzLotto

Check out Tuesday Jackpot from Lottoland. As a correspondent pointed out to me, this betting product looks and feels like OzLotto. Here is what they said:

Just wanted to tell you about Lottoland’s newest lottery, the “Tuesday Jackpot” (https://www.lottoland.com.au/tuejackpot)
It looks ridiculously similar to the Oz Lotto. You know – similar logo, you pick 7 numbers from 1-45, the same odds and drawn at the same time as shown here (https://www.lottoland.com.au/tuejackpot/help). The only differences are that it has a minimum jackpot of $8 million and it costs $2/line.
I thought your viewers might be interested to see how Lottoland is clearly trying to get around the betting ban on domestic lotteries.

See for yourself, here are the details from the Lottoland pitch:

Cost per Game & How to Bet on Tuesday Jackpot

Betting on Tuesday Jackpot only costs just $2 per standard game.

Pick 7 numbers from 1 to 45. Each Tuesday night, 7 regular and 2 supplementary numbers are drawn from the Swiss Loto Express. Match all 7 regular winning numbers to hit the jackpot. Check our TUE Jackpot FAQ for more info.

The current jackpot isn’t big enough? Just use Lottoland®’s special Double Jackpot feature at the top of the bet slip to bet for double the jackpot amount!

Don’t want to share the jackpot? The NumberShield option protects your Division 1 winnings – just activate this feature for selected fields or for your entire bet slip.

Never Miss a Jackpot with Subscriptions

A way to bet on Tuesday Jackpot with your favourite numbers for upcoming draws is to setup a subscription. Your bets will automatically renew for all the upcoming draws until you decide to cancel. No need to put in your numbers for every draw plus you won’t miss a big jackpot!

Bet on Tuesday Jackpot with the Lottoland App

With the official Lottoland Australia App you can bet on the lottery, check results on the go and gain access to even more promotions and discounts. Download the Lottoland App for iPhone or Android today!

Tuesday Jackpot System Bet Prices

System Bets allow you to pick more than the regular 7 numbers, providing you with exponential odds of winning. Refer to our magazine article for more information about System Bets.

System Bets for the TUE Jackpot start at $11.60. For a full list of all System Bets please refer to our TUE Jackpot FAQ page.

Lottoland is clearly not going anywhere. It is developing products and promoting them widely, in pursuit of a profitable future in Australia.

3 likes
Competition

Lottery betting businesses form a new association

As reported last week at CalvinAyre.com, lottery being sites have formed a new trade association to educate (lobby) regulators. This is an interesting move. Here is the report in full. It is important lottery retailers read this to understand that the fight will continue.

Online lottery betting operators have formed a new umbrella group to defend their business model from overzealous gaming regulators and protectionist lottery monopolies.

The European Lotto Betting Association (ELBA) is a new trade body comprised of Lottoland, Multilotto, myLotto24, Lottogo and Legacy8. ELBA spokesperson Lena Patel, myLotto24’s head of corporate affairs, told iGaming Business that the new body’s stated goal is to “dispel myths” about the lottery betting business.

Lottery betting operators are under fire in multiple markets, having been banned outright in Australialast month, while the UK has imposed new restrictions on operators’ ability to offer betting markets on non-UK EuroMillions lottery draws.

Patel noted that the “general tone and language about lottery betting in the media is negative,” despite the ELBA’s view that a lot of this talk “has not been backed up by evidence.” Patel said the “collective voice of the industry hasn’t been strong enough” and the ELBA aimed to inform the public that lottery betting operators are “legitimate” and “we do give back to good causes.”

The ELBA is currently drafting a code of conduct for existing and future members that will “provide definite levels of standards to make sure we’re in line with each other.” This code is expected to be released any day now.

Patel told eGaming Review that the ELBA wanted to “foster a closer working relationship with regulators” to ensure “coherent, strong, sustainable and fair” oversight of the lottery betting sector that doesn’t “unfairly penalize millions of customers who want to take part in lottery betting.”

For the time being, Patel says the ELBA is focusing its efforts on improving lottery betting’s image with European regulators, specifically those markets where “regulation is changing” and “parties with vested interests” are baying for lottery betting operators to be dragged to the woodshed.

The ELBA isn’t the first lottery betting group to attempt to fend off disaster. The Lotto Betting Group, whose ranks include Lottoland and Multilotto, has battled the UK government over its lottery betting restrictions.

Lottery retailers will have to choose who they support. If it is the regulator pure lottery games, then they will need to support ALNA to continue to lobby and work on their behalf as ALNA, like any association, can only be as strong as its members support it to be.

7 likes
Ethics

Advice on signing agreements with suppliers

A newsagent told me recently that a supplier deceptively changed the terms of their agreement by modifying text on one page relating to the term of the agreement. They found out when they asked for a copy of the signed agreement to be sent to them.

While they are certain of the term, the agreement sent to them had a different term, a longer term with penalty for earlier termination.

Situations like this can be avoided if simple processes are followed.

For every agreement you sign in business:

  1. Only sign an agreement with which you are completely happy.
  2. Initial every page of the agreement.
  3. Take a copy of every page and store this in a safe place.
  4. Return the agreement to the supplier for countersigning and ask, in writing, for a copy of the countersigned agreement to be sent to you.
  5. Check the copy of the agreement the supplier returns to you with your own copy. If there is a discrepancy, point it out in writing immediately.

Because of the lack of evidence it could be hard for the newsagent to make a case against the supplier. It would come down to recollection.

I am aware of this happening previously, of a supplier changing an agreement. In one instance, the newsagent did have a copy of what they signed. In that matter, the supplier quickly retreated.

10 likes
Ethics

Lottoland not letting up

While what they sell has been outlawed from early 2019, that has not slowed Lottoland’s advertising. Their relentless pitch of online lottery related purchases is not good for over the counter lottery retailers.

5 likes
Ethics

Why I think newsagents should not stock Inside Out magazine

In my opinion, newsagents should request News Life Media and Gordon and Gotch not supply them Inside Out magazine.

For years, News Corp’s News Life Media has supplied Inside Out to Coles with a price of $6.00 while small business newsagents have a price of $8.20.

The Coles retail price is less than our cost price.

I think we need to match this disrespect by refusing to stock the title. It makes us looks expensive. That is what News and Coles want. Shame on them.

Beyond making other retailers look expensive for this magazine compared to Coles, there are other issues here that concern me, issues that I think the authorities like the ACCC need to consider.

At $6.00, Inside Out is sold at Coles supermarkets at below the established cost price for the magazine title.

The ACCC website has something to say about selling items at below cost including this:

While selling goods at a below-cost price is usually okay, it may be illegal if it is done for the purpose of eliminating or substantially damaging a competitor. This is known as predatory pricing.

Coles has been offering Inside Out magazine at $6.00, discounted from $8.20, at least since June 2014 when I first wrote about it on this blog.

The ACCC has something to say about two-price comparison advertising including this:

Statements such as ‘Was $150/Now $100’ or ‘$150 Now $100’ are likely to be misleading if products have not been sold at the specified ‘before’ or ‘strike through’ prices in a reasonable period immediately before the sale commences.

Such statements are also likely to be misleading if only a limited proportion of a product’s sales were at the higher price in the period immediately before the sale commences. The volume or proportion of sales that may result in such statements being misleading will depend on the circumstances of each case.

The length of the period will depend on factors such as:

  • the type of product or market involved
  • the usual frequency of price changes.

If a business has a policy or practice of discounting goods when not on sale and uses two-price advertising in relation to sale periods, there is a significant risk that the use of two-price advertising will involve conduct that is misleading. The business would be representing to consumers that they will make a particular saving if they purchase the item during the sale period, when this is not necessarily the case.

While I am no lawyer, I think it is possible that the Coles Inside Out magazine pitch is what the ACCC would consider to be misleading conduct based on its position on two-price advertising.

I wrote to the ACCC seeking their consideration of evidence Coles has been running this campaign for two an half years. They expressed no interest.

The only option I see is to get attention of News by refusing to stock this title and maybe other titles. A commercial strike if you will.

UPDATE: 13:49 28/06/2018: This good news from the National Sales Manager at Bauer Media:

Hi Mark,

I saw an article today in Media Week regarding the disparity in price positioning of Inside Out magazine between Coles and Newsagents and calling for a boycott of the title.  I am pleased to inform you that Bauer Media are now the publisher of Inside Out magazine, along with Country Style, having purchased these mastheads from News Life Media this month.   As part of the title transition process we have informed Coles that we will be reverting the masthead to a national price parity point of $8.20.  This will be effective from the August issue.

It continues to be important to  Bauer to support the newsagent channel by maintaining competitive balance in the market place.

I trust this email finds you well.  Please let me know if you have any questions.

Regards,

 

Julie

26 likes
Ethics

Beware lender of last resort loans

There are some expensive financiers pitching easy to obtain finance to newsagents and other small business retailers at the moment. Two of these pitching for business in recent weeks are charging interest at close to 20% with escalating penalties for late payment.

Their pitch is similar to discredited payday lenders – fast access to easy to arrange finance. They sometimes say there is no interest, because they call it something else and charge the full amount up front regardless of whether you pay out the loan early.

Some of these lenders are outside of banks and second and third tier lenders. They are in a field of their own, at the fringe, and for good reason. I say this based on what I have heard of their tactics at collection based on a missed payment or two. A pressured situation quickly escalates.

I understand that small business owners short on cash may feel they have no choice, usually because of pressure from creditors. However, if you take out such a loan without a cashflow model showing you can meet the payments as and when they fall due you could be making your situation considerably worse – because of cascading costs and and often heavy-handed approach to collection.

You could be better off letting your current situation play out rather than making matters worse by taking out a loan you can’t pay. It all depends on your cashflow projections based on a realistic view of the business. A loan from a lender of last resort may only delay the inevitable.

Insolvent trading is a serious matter. Seeking a loan from outside the usual lending circles at a higher than fair cost could be an indicator of insolvent trading. This is something else to contemplate prior to entering into such a funding arrangement.

I appreciate these are complex matters to consider as you can be caught between being prepared to do anything to save your business and not having the clarity to understand whether the business is actually saveable. Talking to someone not reliant on the business could be a useful step to help guide your thinking.

11 likes
Ethics
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