Business

Toys R Us Files For Bankruptcy

November 2, 2017 By Twila Van Leer

Amazon has claimed yet another victim in the retail world as Toys R Us declares bankruptcy, joining a long list of retail chains that have succumbed to the pressure of competition. In its filing, the toy store claimed $5 billion in debt and asked for protection from debtors as it goes into the holiday season, its busiest time.

The toy store will keep its 1,600 Toys R Us and Babies R Us stores open during the bankruptcy proceedings. What ultimately will happen to its 65,000 workers is still unclear. The store has suffered from the disadvantage of having to price too high to outdo competitors such as Amazon.

Analysts have suggested the toy giant needs to find ways to compete with the online retailers, such as in-store birthday parties and doing game demonstrations. Too many shoppers are using Toys R Us to see what the trends are among the country’s younger set while doing phone checks on competitive prices at Amazon, Walmart and other stores.

Toys R Us has lots of company among the corporations that have failed to compete effectively with the online competition. A list of almost 20 includes Radio Shack, True Religion Apparel, Gordmans, Payless ShoeSource, Eastern Outfitters, Rue21, Gymboree and a host of others.

Exploiting its current advantage, Amazon is using a $99 annual Prime Membership to attract shopper loyalty, at the same time offering perks such as same-day delivery in a growing number of markets.

Equifax Fallout Begins

October 26, 2017 By Twila Van Leer

People who froze their credit to minimize financial damage in the wake of the hack of credit reporter Equifax are now realizing what that means.

The problem is massive. Equifax reported that 143 million Americans had their information, including Social Security numbers and other personal data, exposed in the hack. The company’s CEO resigned in the wake of the credit disaster and Congress is discussing how another such disaster might be avoided.

The aftermath is becoming apparent as people who reacted by freezing their credit try to buy things such as the new iPhone that is in high demand or other big-ticket items.

It is possible to unfreeze your credit if you are anticipating a large purchase and then freezing it again afterward. But that may take time and your credit is vulnerable during the interim.

Experts advise that you let the major credit bureau know several hours or at most several days before you apply for financing. The three bureaus are TransUnion, Experian and Equifax. You will likely be charged $3 to $10 for each action at each of the three bureaus.

Sellers, such as Apple and other wireless carriers, often asked for a credit report before they approve the sale of a new phone. The costs and the hassle of unfreezing and refreezing your credit information may make the acquisition of a new super-phone – or any other costly item – more trouble than it is worth to the consumer.

Citizens Financial Group of Providence, R.I., which runs the Apple financing program, has already announced that it will not new or existing customers who have frozen their credit, at least temporarily. Sprint, Verizon, 4:58 PM-Mobile and AT&T also run credit checks with the three credit agencies. Their policies vary, but it is one of the indications that the Equifax hack will affect the buying practices of many Americans.

Microchips Replacing ID Badges?

September 26, 2017 By Twila Van Leer

At some companies, the standard ID badge that identifies employees is moving over for a microchip injected into the individual’s hand. At the Swedish Epicenter plant, it’s still optional, but the trend is growing.

The microchips are the size of a grain of rice. They function as swipe cards to open doors, operate printers – or purchase fast food items.

Convenience is the argument the company uses for the identification method. Workers at the plant hold parties for those willing to have a chip implanted. It is not a requirement. Officials say it replaces a lot of other communications devices, such as credit cards and keys.

It’s the same technology that has been used for some time to identify pets. Some companies use embedded microchips to track shipments. But widespread use for employee identification is just beginning.

Security and privacy issues are part of the development. The chips are biologically safe, but some think they are too intrusive, recording data about what time an employee arrives at work and what he or she buys. Some employees who had qualms at the outset went ahead and now feel at home with the chips. The many sorts of implants that people have had in recent times helps alleviate some of the doubts. For instance, just about everyone knows someone with a pacemaker or a port for medications.

Epicenter has 100 companies and some 2,000 employees. It began implanting ID microchips in 2015 and now has some 150 workers implanted.

The microchips use Near Field Communication technology, the same that is used in contactless credit cards or mobile payments. When activated by a reader a few centimeters away, a small amount of data flows between the two devices via electromagnetic waves. The implants are passive, unable to read information themselves.

There are concerns that hackers could conceivably get a huge amount of information from the embedded microchips. As the sophistication level of the implants rises, the concerns could multiply. Questions about who, when and where should be subjected to implantation will get more sticky.

The devices are injected using pre-loaded syringes into the fleshy area of the hand next to the thumb. The process takes just a few seconds and there is little if any blood. At Epicenter, they make a party of it. Monthly, they meet and those who want to get “chipped” get it done.

The gradual move toward implants may be the wave of the future, and there is a growing number of employees who want to be part of the movement, but the potential problems re: confidentiality and the prospect of hackers ending up with an individual’s information should be addressed.

Helping Small Businesses Go Cashless

September 18, 2017 By Twila Van Leer

Small Business Cashless — “We’re declaring a war on cash”

There are advantages to small businesses, particularly restaurants and food sellers in going cashless. Visa has undertaken a project to help them in the process, providing $10,000 each of 50 American businesses that are willing to commit to converting to digital payment technology.

“We’re declaring war on cash,” said Visa spokesman Andy Gerit.

After assessing the results of the first year of the program, Visa representatives said the company expects to expand the program into other industries and countries.

Cash is still king in many industries around the world, despite the proliferation of credit and debit cards. To make the transition to cashless, it is necessary to upgrade their current point-of-sale systems, which hampers some small businesses that want to make the change.

That’s where Visa’s offer of assistance steps in. The businesses that are considering the shift to a cashless environment have to assess how they currently use cash, what effect a change would have on customers and how workers would be trained to make the transition.

Visa’ contribution could be used to upgrade point-of-sale equipment or toward marketing and other efforts to promote their small businesses.

Obviously, Visa stands to benefit over the long haul. The company already is the world’s largest processor of credit and debit cards. It charges a small fee from every payment it processes. The more companies that convert to cashless business practices, the more Visa stands to profit.

Visa’s promotion is based on information from a study conducted recently that calculated the effects if the businesses in100 American cities converted to cashless. The prediction was that the net benefit to those cities would total some $312 billion per year. The benefits would come through savings in labor costs. New York City alone could save more than 186 million hours in labor, the study suggested.

Later this year Visa says it will release a report titled “Cashless Cities: Realizing the Benefits of Digital Payments” to summarize the effects of the project.

Living Wage Laws Difficult To Enforce

May 28, 2016 By Twila Van Leer

For the cities that endorse the Living Wage Law, ensuring compliance is difficult.

A number of cities have bowed to pressure from labor advocates and enacted “living wage” laws, some of them phasing in plans that will top out at $15 per hour.

A living wage is the minimum income necessary for a worker to meet their basic needs. It was designed to fight poverty, but the ripple effects that come after cities actually adopt the Living Wage Laws are numerous.

Ensuring that employers actually follow the new guidelines is difficult. State and federal laws don’t require employers to provide data proving that they are in compliance, oversight agencies say. The data is most often contained in payment check stubs, but employers are not required to share the information.

Cities That Use Living Wage Laws

Among cities that have adopted the wage increases are Santa Fe and Albuquerque, New Mexico, San Francisco, California, and Washington D.C. The issue is on the agendas of many state legislatures and city governments as the press for better wages heats up.

Complaints

Enforcers generally rely on worker complaints to initiate actions against employers who do not conform, but the employees are reluctant to complain for fear of reprisals, so many instances of non-compliance go unnoticed. Labor groups estimate that a quarter of the country’s workers who fall under the guidelines are not receiving the legislated wages. But if one employee complains, enforcers use it as leverage to investigate pay records for all of the business’ employees on the supposition that the problem affects more than the single complainant.

Recommendations For Enforcement

Haeyoung Yoon of the National Employment Law Project calls the problem “pervasive and rampant” in an Associated Press news article. The project recommends higher fines against non-compliant employers and more stringent enforcement. The costs of enforcement are high, but could be recouped through fines, she said.

Some employers don’t understand the new laws, but others sidestep the provisions by requiring workers to work unpaid or off the clock to make up the difference. Others raise the wage, but cut the benefits.

Law Suits

Hospitality and transportation workers serving in SeaTac, Washington are granted the Living Wage Law. This community however needed courts to enforce compliance and have filed more than a dozen class-action suits this year in behalf of workers. The total amount of contested wages, related benefits and possible penalties could add up to $62.5 million.