Hurricane Harvey: HOW DISASTERS AFFECT FUEL PRICES

August 31, 2017

Five most devastating storms in recent US History.

5.  Ivan – 2004

4.  Ike – 2008

3.  Andrew – 1992

2.  Sandy – 2012

1.  Katrina – 2005

As Harvey continues its path of destruction it’s certain to make the list above.  We continue to think of our many customers, friends and vendors that are affected by this horrible storm as it now heads to Louisiana, Arkansas and Tennessee.

Attention IRSI customers:  Insight Retail Software will securely store a copy of your backOffice™ database please let us know.

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This article from NACS online

Higher prices at the pump often lead the public to assume a retailer is price gouging.

 

August 31, 2017

 

​ALEXANDRIA, Va. – The retail fuel marketplace is the most competitive commodity market in the nation. There are an estimated 150,000 retail fueling facilities in the United States. Of these operations, less than 1% are owned and operated by the major oil companies, and about another 4% are owned by a refining company. The majority—about 95% of stores—are owned by independent companies, whether one-store operators or regional chains. Each of these companies has different strategies and strengths in operations, which can dictate the type of fuel that they buy and how they sell it.

Most of the nation’s fuel retailers purchase their gasoline and diesel supplies from a refiner. As such, these businesses have no influence over the wholesale price established by the refiner and, during a catastrophic event such as a hurricane, these retailers can incur extremely volatile wholesale prices and restricted wholesale availability. Wholesale prices are largely influenced by activity in the commodities trading market, in which traders bid prices up or down based upon actual and anticipated changes in supply availability. During disruptive events, these contracts can vary widely in a very short period of time.

Refiners seek to ensure they have sufficient product to satisfy their contractual obligations when supplies are disrupted. Refiners often will place their branded retailers on allocation, restricting their volume to a certain percentage based upon the previous year’s activity and ensuring the refiner’s product is available throughout their service area. While these branded retailers are likely to have at least some supply guaranteed, they have one supplier for product. The unbranded retailer, meanwhile, who relies on the uncontracted gallon of gasoline, often pays an elevated wholesale price or is completely denied access to supplies. This limitation on supplies for the retail segment as demand remains constant results in increased wholesale prices.

It’s common for retailers to operate daily in a volatile wholesale gasoline marketplace, where costs often change several times a day. Under normal market conditions, retailers may seek to adjust their prices upward in response to increasing wholesale prices to pay for their next delivery. This practice is known as factoring in replacement costs and is a critical element in the pricing decision for many retailers, especially during periods of extreme volatility.

But including replacement costs in retail prices may not always be feasible. But because price-sensitive consumers will switch locations to save a few cents per gallon, retailers will often remain competitive in their fuel pricing strategy, which affects their ability to recover the full cost of wholesale price increases, resulting in reduced margins and, in some cases, net losses at the pump for transactions.

Higher prices at the pump often lead the public to assume a retailer is price gouging. Price gouging is defined by some government entities as the increase in prices or value for goods and services that are higher than the prices ordinarily charged for comparable goods and services at or immediately before the time of a state of emergency. In the wake of natural disasters that affect the U.S. transportation infrastructure, governors may declare a state of emergency and institute a price gouging prohibition.

Following Hurricane Katrina in 2005, some members of Congress sought to enact legislation on price gouging that would have punished honest retailers for violating an ambiguous definition of price gouging. The legislation that passed both the House and Senate defined “unconscionably excessive prices” as:

  • Significantly higher than the average price charged by that supplier during the 30-days prior to the emergency;
  • Significantly higher than the competition; and
  • Not attributable to increased costs, including replacement costs.

NACS argued at the time and continues to advise policy makers that the concept of price gouging is very complicated and must be carefully considered. Laws that do not adequately protect the normal operating practices of fuel retailers can have a very damaging effect on the market. Retailers must be given the opportunity to respond to changing market conditions and to recover their costs. For example, laws that prohibit a retailer from increasing fuel prices following the declaration of an emergency yet provide no allowance to adjust prices in response to escalating wholesale prices serve only to penalize retailers who stay open for business to serve their communities and accelerate the exhaustion of already limited supplies.

While Congress did not ultimately enact price-gouging legislation, several states that experience hurricanes and flooding have price-gouging statutes:

Texas
The Office of the Attorney General has authority to prosecute any business that engages in price gouging after a disaster has been declared by the governor. §17.46(b) of the Texas Deceptive Trade Practices-Consumer Protection Act provides that it is a false, misleading or deceptive act or practice to take advantage of a disaster declared by the Governor under Chapter 418, Government Code, by:

  • Selling or leasing fuel, food, medicine or another necessity at an exorbitant or excessive price; or
  • Demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine or another necessity.

Louisiana
Once a state of emergency is declared, the price gouging ban is effective during the period specified in the declaration and for an additional period not to exceed 30 days after the declared state of emergency ends, unless expressly extended by the governor (La. R.S. 29:732(B)). Louisiana’s price gouging statute is not to freeze prices. Wholesalers and retailers may increase prices as long as the increase in price charged by the seller is attributable to regional or national market trends and fluctuations, or to reasonable expenses and charges for a business’ risk incurred in obtaining or selling the goods or services during the state of emergency (La. R.S. 29:732(A)).

The state’s price gouging ban covers goods and services necessary for use as a direct result of the state of emergency, such as gasoline or diesel fuel of any grade, hotels, motels and generators.

Florida
According to the Office of the Attorney General, Florida Statute 501.160 states that during a state of emergency, it is unlawful to sell, lease, offer to sell, or offer for lease essential commodities for an amount that grossly exceeds the average price for that commodity during the 30 days before the declaration of the state of emergency, unless the seller can justify the price by showing increases in its prices or market trends. Examples of necessary commodities are food, ice, gas and lumber.

The law compares the reported price of the commodity or service during the state of emergency to the average price charged over the 30-day period prior to the declared state of emergency. If there is a “gross disparity” between the prior price and the current charge, it is considered price gouging.

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August 3, 2016

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Water Water Everywhere!

August 3, 2016

Bottled Water is the trend and big seller.  Depend on backOffice™ Software for proper pricing and inventory.  How about a mix and match promotion?  Keep your shelves hydrated!

More information on backOffice™ Software here

Great information from NACS Online.


BOTTLED WATER’S POPULARITY SOARING

Concerns about health and lead contamination in drinking water are likely fueling the trend.
August 3, 2016

WASHINGTON, D.C. – Bottled water will outshine soda for the first time in U.S. history in 2016, spurred by its convenience and fears over tap water, Bloomberg reports. A previous report found that bottled water consumption grew 120% between 2000 and 2015.

The nation’s largest bottled-water producers (Coca-Cola Co., Dr Pepper Snapple Group, Nestle Waters and PepsiCo Inc.) point to Americans desiring portable, calorie-free beverages, but predict the trend will continue because of concerns over contaminated drinking water.

Communities in Flint, Mich., Newark, N.J., and Washington, D.C. are struggling to replace corroded pipes that have leached lead into tap water. “Concerns in places like Flint do bring bottled water to people’s attention as a safe and sealed source of drinking water,” said Jane Lazgin, a spokeswoman for Nestle Waters North America. The U.S. Environmental Protection Agency forecasts a whopping $384 billion is needed to maintain or replace essential components of the nation’s water infrastructure over the next decade or so.

Euromonitor expects Americans to down 27.4 gallons of bottled water in 2016, 1.2 gallons more than carbonated soft drinks. That switch hasn’t impacted the bottom line of soft drink manufacturers because many of them have expanded into bottled water.

For more on packaged beverages (including bottled water), read “The Workhorse” in the August 2016 issue of NACS Magazine.


Visa Security Alert Threat Landscape: Pin Pad/POS Skimming

June 3, 2016

Incident Details

Visa Global Payment System Risk is aware of increasing incidents involving suspects placing skimming devices on point-of–sale (POS) terminals for the purpose of collecting payment card information, including PIN numbers. Perpetrators use this information to create counterfeit cards re-encoded with the stolen card information and make unauthorized ATM withdrawals. The primary targets for these recent skimming events are self-checkout terminals in supermarkets. However, any POS terminal may be at risk, including those that are often unattended, such as terminals near deli counters, coffee stands, etc. The perpetrators are mobile and will target multiple stores within a geographic area for a period of time before moving on to a new location. Most entities targeted are using payment devices that have not yet been upgraded to accept EMV cards.

Placement of Skimming Devices

Skimming devices can be placed at any time of the day but placement usually occurs during slower times of business when the perpetrators can go undetected by employees or other customers. The perpetrators will usually work in teams of two or more with one person being a lookout, one person placing the skimming device on the POS terminal and another creating a barrier so that no one can observe the skimming device being placed. Perpetrators have been known to use large items such as packs of paper towels to block the view of POS terminals. In some instances, it was reported that the suspects created a distraction in the store by faking a medical incident or causing commotion that distracted the attention of store personnel away from the POS terminals. The skimming devices will mimic the look of the front of the POS terminal.

Recommended Inspection & Response Actions

1. Prevention Through Device Inventory Management

  • In accordance with PCI DSS Requirement 9.9, ensure implementation of security controls to protect POS devices from tampering and substitution. Examples include:

Maintain a list of devices including the device serial number or other method of unique identification. 

Keep a list of device location either by store or physical location within the store itself (i.e., self-checkout, deli counter, manned checkout). 

Train personnel to be aware of suspicious behavior and to report tampering or substitution of devices.

 Verify the identity of any third-party persons claiming to be repair or maintenance personnel, prior to granting them access to modify or troubleshoot devices.  

2. Physical Inspection of POS Devices

  • Implement security procedures to inspect POS devices at least twice each day and at random times.
  • Physically examine the device. Skimming devices are typically attached with minimal adhesive allowing them to be place and removed with ease, so devices may be detected by giving the front of the POS/PED a good grab-and-pull. Weighing the devices may also identify tampering.
  • Please note some skimming devices are Bluetooth enabled and data can be captured without the device needing to be recovered.
  • When inspecting devices, use backup security personnel to monitor from a distance as suspects may watch compromised terminals and suspects are trained in counter surveillance to avoid detection/arrest.

3. Device Recovery Response

  • If a skimming device is discovered on a POS terminal, do not handle it, as evidence may be damaged.
  • Notify local law enforcement and the FBI or USSS office so they can recover the skimming device.
  • Protect any video surveillance that may be used to identify any perpetrators and confirm timing of when the device was placed on the POS terminal.
  • Initiate incident response procedures and notify your Acquirer so that Visa can assist with the investigation.

 

Information from VISA April 2016

For other questions, please contact Cyber Intelligence & Investigations via email at USFraudControl@visa.com

Additional Resources:

What To Do If Compromised

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Support for older versions of Internet Explorer Ended

May 31, 2016

What is end of support?

Beginning January 12, 2016, only the most current version of Internet Explorer available for a supported operating system will receive technical support and security updates. Internet Explorer 11 is the last version of Internet Explorer, and will continue to receive security updates, compatibility fixes, and technical support on Windows 7, Windows 8.1, and Windows 10.

Internet Explorer 11 offers improved security, increased performance, better backward compatibility, and support for the web standards that power today’s websites and services. Microsoft encourages customers to upgrade and stay up-to-date on the latest browser for a faster, more secure browsing experience.

What does this mean?

It means you should take action. After January 12, 2016, Microsoft will no longer provide security updates or technical support for older versions of Internet Explorer. Security updates patch vulnerabilities that may be exploited by malware, helping to keep users and their data safer. Regular security updates help protect computers from malicious attacks, so upgrading and staying current is important.


Potential risk of using older versions of Internet Explorer:

Security

Without critical browser security updates, your PC may become vulnerable to harmful viruses, spyware, and other malicious software which can steal or damage your business data and information.

Compliance

Businesses that are governed by regulatory obligations such as HIPAA should conduct due diligence to assess whether they are still able to satisfy compliance requirements using unsupported software.

Lack of ISV Support

Many Independent Software Vendors(ISVs) no longer support older versions of Internet Explorer. For example, Office 365 takes advantage of modern web standards and runs best with the latest browser.

Click here to read more

 


EMV is real, like it or not.

March 31, 2016

CAN WE GET A ‘MEH’?

Survey finds that consumers don’t seem to care whether payment terminals are EMV capable.

March 31, 2016

​NEW YORK – Forbes writes “there was a lot of hoopla” surrounding the October 1, 2015, EMV liability shift date, where retailers that did not upgrade to EMV-capable payment technology would become liable for any fraudulent purchases that resulted from chip-card transactions.

According to a recent CardHub survey, 42% of retailers have not updated terminals in their stores to make them EMV-compliant—and consumers don’t seem to care, writes Forbes. The publication added that CardHub found “some 56% of people surveyed don’t care if a retailer’s payment terminal is chip-enabled, and 41% of consumers say they don’t have—or don’t know if they have—a chip-enabled credit card.”

Of the retailers CardHub included in its survey, only 60% that said they would complete equipment upgrades by the October 1, 2015, liability shift deadline have finished updating all of their terminals.“We were a little bit surprised by just how slow the uptake is here,” Jill Gonzalez, an analyst at CardHub, told Forbes, adding, “The banks did their part, the financial institutions got their chip-enabled cards out, and the retailers really are taking their time.” She also says that retailers “aren’t feeling the pressure of being responsible for fraudulent activity” because it hasn’t become a financial reality.

However, as Conexxus Executive Director Gray Taylor points out, many retailers haven’t flipped the switch to accept EMV payments “because they can’t, reasonably or unreasonably.” There’s also strong indication from retailers that the October 1, 2017, liability shift for outdoor payment equipment (i.e., dispensers) will be difficult to reach for those same reasons. “What has resulted is retailer abuse—starving innovation, paying premiums for development, putting equipment into the market with the understanding that multiple site-down visits will be required—has never been seen before in any mandate,” he told NACS Daily.

Furthermore, the card companies aren’t calling EMV a mandate, but for retailers who don’t do it, chargebacks will go from a light sprinkle to a massive downpour.”

Forbes writes that installing EMV-compliant terminals is a dual-cost process for retailers. The first cost is upgrading (or in some instances replacing) all of their terminals, and the second cost is terminal activation. For consumers, their “meh” attitude is likely because education about EMV chip cards hasn’t emphasized the security aspect.


Retailers may have a “Meh” attitude but EMV is real and MUST be addressed.  It’s a difficult process for everyone but our QIR Certified Staff can help to answer your questions. Don’t wait until the chargebacks start to happen, as was the case with one of our customers.

Give us a call – 518-633-4111 x 103
EMV Chip
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PROPOSED SNAP RULE COULD MAKE C-STORES INELIGIBLE

March 10, 2016

NACS reaches out to Capitol Hill to protest changes around definition of staple foods.

March 10, 2016

​ALEXANDRIA, Va. – This week NACS told policymakers about industry concerns with a proposed rule published by the U.S. Department of Agriculture that includes problematic new eligibility standards for retailers participating in the Supplemental Nutrition Assistance Program (SNAP).

“The proposed [SNAP] rule would make tens of thousands of small businesses ineligible to participate in the Program. Small businesses will be harmed and SNAP beneficiaries, who rely on these small stores in both urban and rural environments, will lose options they need to feed their families,” wrote NACS in a letter to the chairman and ranking member of the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies, and the chairman and ranking member of the House Agriculture Committee.

As previously reported by NACS, on February 17, the U.S. Department of Agriculture’s Food & Nutrition Service (FNS) published a proposed rule altering eligibility requirements for retailers participating in SNAP. While the proposal codifies the 2014 Farm Bill provisions, which NACS supported, it also makes other changes to retailer eligibility requirements that Congress never intended to address in the 2014 Farm Bill. The proposal would impede neighborhood retailers’ ability to participate in the program, which in turn would hinder food accessibility for SNAP recipients that use their benefits at these small format retail locations.

“It appears that FNS is trying to push small retailers out of the SNAP program altogether, for no sound public policy reason,” NACS wrote to Congress, adding that Food, Nutrition and Consumer Services Undersecretary Kevin Concannon recently testified before the House Appropriations Committee that there are more small stores participating in SNAP “than we really need.”

The USDA’s SNAP proposal codifies the 2014 Farm Bill “depth of stock” provisions, which require retailers to stock 7 varieties of products in each of the four “staple food” categories. Problematically, the proposal also includes several changes that were neither required nor envisioned by the 2014 Farm Bill.

The proposal redefines the term “staple foods” and limits the items that may count as staple foods for depth of stock determinations. Under the proposal, multiple ingredient items (e.g. soups or frozen dinners) would not count towards depth of stock requirements. The proposal also expands the definition of “accessory foods” to include foods consumed between meals, like snacks (e.g. hummus and pretzel packs).

Because accessory and multiple ingredient foods may not be counted as staple foods for depth of stock determinations—the proposal essentially narrows the universe of acceptable foods that a retailer can stock to participate in SNAP, ultimately raising the stocking numbers beyond the numbers established by Congress.

Next week in Washington during the NACS Government Relations Conference, industry stakeholders will be communicating to members of Congress and their staffs that convenience stores play a fundamental role in SNAP, particularly for low-income Americans who live in rural or urban environments. By making it increasingly difficult for small format retailers to participate in SNAP, the proposal would essentially punish SNAP beneficiaries by requiring them to travel outside of their local neighborhoods where larger format retailers may not exist.

A memorandum analyzing the proposal is available online exclusively for NACS members.


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