The National Retail Federation announced it will formally oppose a proposed settlement of a federal antitrust lawsuit over credit card swipe fees charged by Visa and MasterCard, and urged retailers to carefully consider their own decisions before next week’s deadline set by the court.

“The proposed settlement does nothing to bring swipe fees under control and would give Visa and MasterCard a legal blessing to continue their abuse of merchants and consumers indefinitely,” NRF Senior Vice President and General Counsel Mallory Duncan said. “No settlement at all would be better than this one-sided ‘agreement’ written by the card companies for the card companies that would tie retailers’ hands for decades to come.”

While many retailers have already filed paperwork with the U.S. District Court in Brooklyn, N.Y., opposing the settlement, many small retailers have yet to act because they lack the legal expertise and resources to fully assess the complicated proposal.

Retailers who oppose the plan have until May 28 to say whether they will opt out of the money offered and accompanying restrictions on future legal action, object to proposed injunctive relief that comes with additional restrictions, or—as NRF plans —do both. Under the class action terms of the proposed agreement, retailers who do not opt out by the deadline will automatically be considered to have accepted the settlement and will give up the right to file future lawsuits over the fees and other restrictive rules.

NRF opposes the settlement because it fails to reform the price-fixing system under which Visa and MasterCard set the schedule of swipe fees followed by the thousands of banks that issue their credit cards, or to introduce transparency that would lead to competition to lower the fees. Rather than lowering the fees, the card companies have proposed that the fees be passed along to consumers in the form of a surcharge, even though most major retailers have rejected surcharges as the opposite of what they have sought during the years-long fight over swipe fees.

Retailers who do not opt out—and thereby become fully bound by the restrictions of the agreement—will be eligible for a share of $7.25 billion. But the figure amounts to less than three months’ worth of swipe fee charges, and the small retailers hit hardest by the fees would give up their rights for as little as a few hundred dollars.

The suit was brought in 2005 by 19 trade associations and individual retail companies, but a majority—including all six trade associations—rejected the settlement when it was proposed last summer. NRF, like most retailers, is not a party to the lawsuit, but has led the retail industry’s opposition to the settlement because NRF member companies would be dragged into its terms as part of the class action.

Averaging about 2%, swipe fees are a percentage of the transaction taken by banks each time a consumer swipes a credit card to pay for a purchase, and total about $30 billion a year nationwide. The fees have tripled over the past decade, and drive prices up for the average household by more than $250 per year.

As the world’s largest retail trade association and the voice of retail worldwide, NRF represents retailers of all types and sizes, including chain restaurants and industry partners, from the United States and more than 45 countries abroad.

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Family Express announced that it has chosen 3xLOGIC, Inc., a developer of intelligent video solutions, as its provider of video surveillance solutions beginning May of 2013.

This is another innovative way that Family Express uses technology to enhance overall operational efficiency and deliver outstanding customer service.

The 3xLOGIC’s VIGIL Video Management System (VMS) provides the ability to monitor the store from the home, backroom office, or mobile device of authorized Family Express Associates. The ability to access live video through a mobile device on the go is an advantage Family Express had not been able to capture before.

“Our people are our competitive advantage; we want to use 3xLOGIC to catch them in the act of doing the right thing,” said Alex Olympidis, director of operations for Family Express. Enhanced line-item audit trails and custom search options provide the ability to find areas of strength and weakness more quickly than ever before.

By using 3xLOGIC’s Cloud Application, 3xCLOUD, Family Express was able to eliminate nearly sixty personal computers in the homes of store managers, allowing them to access video feed on the device of their choice.

“3xCLOUD gives Family Express the ability to easily access video from any of their stores on a laptop, smart phone, tablet, or desktop PC,” said Dave Nieweg, vice president and general manager of 3xLOGIC Inc. “With 3xCLOUD, Family Express is able to further extend their operational leadership and effectiveness by allowing key personnel to view live and saved video anywhere that they have internet access. As a result they are able to make smarter and more timely decisions about their business, their assets and their employees.”

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OpenStore by GasBuddy, a multi-channel digital marketing solution for convenience store chains, has partnered with Phillips 66, owner of gas station brands Phillips 66, Conoco and 76.

OpenStore will be launching new Websites and mobile apps for each of the brands in May of this year.

The new Websites will each be fully integrated with a branded mobile app to create a complete experience for 76, Conoco, and Phillips 66 consumers at more than 7,000 branded stations. The apps and Websites will allow consumers to access updated gas prices, in-store promotions, send feedback, and more.  Customers will be able to send feedback from their mobile phone, search for locations, and receive time-sensitive electronic mobile coupons.

With this partnership, individual Phillips 66 Marketers, Resellers and dealers can also sign up with OpenStore, allowing them to create their own unique Phillips 66, 76, or Conoco-branded Website. These locations will also be able to create store deals to post on their website and provide coupons to send to app users.

“Customers love the convenience of using apps and being rewarded for their loyalty as a customer,” said Jason Toews, Co-founder and CEO of OpenStore by GasBuddy. “OpenStore helps our clients optimize the customer experience. We’re thrilled to have Phillips 66 Company on board, and we are proud to be part of their continued success.”

“We are excited to align with the well-recognized GasBuddy brand,” said Andy Viens, president of global marketing for Phillips 66. “Consumers today are depending on their mobile devices for special deals and promotions and the OpenStore product allows our customers to uniquely promote their businesses to these mobile savvy consumers.”

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Super Pantry, operated by Tri Star Marketing Inc., has launched a new branded Super Pantry Website and free mobile app.

The Website officially rolled out in April as did the free Super Pantry mobile app. The app showcases updated gas prices, locations, in-store promotions and more.  Customers can send feedback from their mobile phone, view store information and receive time-sensitive electronic mobile coupons.

“Super Pantry has a mission to provide outstanding customer service, and providing tools directly to the customer build that relationship. Connecting to our customers via social media and mobile technology gives us the opportunity to provide the best value while building customer loyalty,” said Ryan Moran, marketing manager at Tri Star Marketing Inc. “The opportunities are endless with OpenStore and we are proud to partner with them to grow our business.”

“Connecting with customers is key to gaining loyal and satisfied customers. Super Pantry realizes the significance of tapping into the technology that their customers like to use,” said Jason Toews, co-founder and CEO of OpenStore by GasBuddy. “OpenStore is a complete turnkey social technology solution that will support Super Pantry’s strategies to reach their customers with targeted marketing and powerful messaging.”

Super Pantry operates convenience stores in Illinois and Indiana.

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Cumberland Farms has announced that its customers have saved $1 million on gas since the launch of its free SmartPay Check-Link payment program in January.

The program lets customers pay for gas and in-store purchases using their mobile phones or with a payment card. Free to enroll, SmartPay Check-Link users automatically save 10 cents on every gallon of gas, every day.

“The response to the SmartPay Check-Link program has been incredible thus far, and we’re so proud of the fact that our customers have saved such a significant amount in the short period of time since its launch,” said Ari Haseotes, president of Cumberland Farms. “With Memorial Day right around the corner and the summer travel season ahead, we hope even more customers will take advantage of this convenient new way to pay—and save—every time they fill up at our pumps.”

Smart-Pay Check-Link is available in both a mobile app and a payment card format, and ensures secure, PIN-based transactions to a user’s checking account. Anyone can enroll for free at cumberlandfarms.com/smartpay. To use, customers can swipe their SmartPay Check-Link card or pay with their mobile phone right at the pump and instantly save 10 cents per gallon on gas, every day. Following the transaction, mobile app users are automatically e-mailed a receipt and notified of how much money they saved on that transaction by using SmartPay—and their lifetime savings with the program.

SmartPay Check-Link also works inside any Cumberland Farms store, so users can pay with their phone or swipe their SmartPay payment card to purchase Farmhouse Blend coffee or snacks as well. 

To download the SmartPay Check-Link mobile payment app, visit iTunes, Google Play or cfsmartpay.com in your mobile browser. Free SmartPay payment cards and account applications may also be obtained in-person at participating Cumberland Farms locations.

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New this year, the Tech Event combined NACStech and the PCATS (Petroleum Convenience Alliance for Technology Standards) Winter Meeting into one event intended to deliver new ideas and opportunities to connect with industry peers.

Breakout sessions included topics such as the future of EMV, project management, the state of the convenience store industry, building a company alliance through IT, and more.

Wednesday’s Keynote Speaker David Wolman, author of  The End of Money: Counterfeiters, Preachers, Techies, Dreamers, and the Coming Cashless Society, outlined the costs of a cash-based society and introduced the idea that a monetary revolution is at play that could eventually remove physical cash as a form of payment. 

Gray Taylor, executive director, PCATS, spoke to a general session audience about the need for the convenience store industry to strive to be leaders in technology. “If we’re not first we shall be last,” he warned. Because of the fragmentation of the c-store industry, and as channels blur, the industry’s competitors are easier prospects to new technology. “We must be leaders in technology. Try it in our industry first,” he said. To that end, NACS is investing strategically in groups outside the c-store industry, as well as keeping its pulse on what is happening in c-stores globally, especially Europe, to be prepared before it’s implemented here, and to lead the conversation before someone else does. “Through technology we have the power to tear down monopolies,” he said, referencing the major card companies.

New PCATS Board Members

During the session, PCATS welcomed those elected to four key roles on the Board of Advisors:

Vice Chair: Margaret Akins of Pilot Flying J

 Membership and Marketing: Drew Mize of  The Pinnacle Corp.

Technology Research and Strategy: Doug New of Tedeschi Food Shops

 Retail Business Requirements: David Welsh of Sheetz Inc.

Hall of Fame

Retailers gathered at the PCATS Hall of Fame reception on May 8 to celebrate the induction of Scott Hartman, president and CEO of Rutter’s Farm Stores, and Gene Gerke, president of Columbia, Mo.-based Gerke & Associates Inc., into the PCATS Technology Hall of Fame.

Hartman has been active in the technology industry since 1995 when he became involved with the NACS Technology Standards Project, which ultimately led to the creation of PCATS in 2004. (PCATS was integrated into NACS in 2010.) In addition, Hartman served as the 2005-06 NACS chairman and also served two terms as PCATS chairman. He also acted as NACS vice chairman of research and development, chairman of the Technology Committee and chairman of the Technology Standards Steering Committee.

Gerke also was an original member of the NACS Technology Standards Project team, as well as a co-founder of CSX LLC, the largest purpose-built, online database of financial and operating data in the industry. NACS acquired CSX in 2007. Gerke’s management consulting firm advises clients in areas including technology implementation and technology standards.

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Acumera has announced the release of Fuel Connections Service, a remote connections and monitoring service to improve fuel inventory and compliance management for fuel marketers and wholesale distributors.

Acumera’s Fuel Connections Service is now being offered as a freestanding solution for fuel marketers to remotely monitor and receive alerts about fuel inventory at company-owned and at customer sites via the AcuVigil Dashboard.  Marketers can also securely pull fuel inventory and alert data into proprietary in-house and third-party fuel management systems.  

“In today’s volatile fuel market, it’s important to get accurate, up-to-the-minute data and provide secure visibility to appropriate parties across the supply chain,” said Acumera Vice President of Sales and Marketing Tom Yemington. “Acumera provides the means of reliably connecting fuel monitoring devices to business intelligence systems so decision makers can use the data to drive profitability and efficiency.”

The Fuel Connections Service is also being offered to Acumera’s current convenience store customers who are using Acumera’s PCI-compliant C-Store Connections package and want to connect their fuel monitoring system to the AcuVigil Dashboard. As a part of this service, marketers and retailers can receive text and email alerts to enhance store operations and monitor issues, such as outages, water in the fuel or low fuel inventory levels.

The Fuel Connections Service connects serial or Ethernet automatic tank gauges (ATGs) directly to an Acumera Merchant Gateway.  For marketers not already connected to Acumera’s network, three low-cost WAN options are available:

• Managed Broadband: Acumera researches, provisions, and manages the installation of the optimal broadband for a given location and passes through carrier charges at cost for billing transparency.

• Bring Your Own Broadband:  Marketers can supply their own broadband connectivity at the site.

• Managed Cellular Broadband: Marketers can leverage Acumera’s managed cellular services and data pooling capability to connect fuel monitoring equipment to the cellular network, independent of the site owner/operator network.

Designed with convenience store operators and fuel marketers in mind, Acumera’s Fuel Connections Service provides reliable access to ATG fuel levels, environmental data, and water alarms via the AcuVigil Dashboard and via third-party fuel management systems and services, such as TelaPoint.

The Fuel Connections Service is being introduced at The Tech Event, a NACS conference bringing top retail and supplier IT leaders together to exchange ideas and introduce new products and services. Acumera will be exhibiting at Booth 305 at the Hilton Anatole in Dallas, May 6-10, 2013.

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From the site of its 21st annual Idea Exchange, PDI announced a joint venture with iControl Systems to introduce a new supply chain solution.

The PDI Supplier Portal, which is powered through Harmony by iControl, will enable convenience retailers and their suppliers to exchange pricebook item, cost, promotion, and invoice information in real time.

PDI president Greg Gilkerson said his company is excited about the new business relationship and its potential impact on the industry. “Automating the exchange of information between retailers and Direct Store Delivery (DSD) suppliers is one of the last great hurdles to Doing Business Electronically. We are proud to work with iControl to deliver this powerful solution to our customers and eventually, the entire convenience store industry,” Gilkerson noted.

In addition to performing pricebook synchronization functions, the PDI Supplier Portal will handle regulated payments for alcohol purchases, allowing retailers and suppliers to transact business while maintaining full compliance with state and federal regulations. The cutting-edge SaaS technology also facilitates scan based trading (SBT) which minimizes vendor check-in labor and uses data to collaboratively reduce shrink and increase sales by improving inventory stock positions.

“PDI is a highly respected leader in the convenience sector that has been providing world-class solutions and services to their customers for 30 years,” said iControl Co-CEO Tal Zlotnitsky. “We are addressing a problem that is widely recognized as a huge challenge to convenience store operators and their supply chain. In collaboration with PDI, we have the solution to solve this problem swiftly, profoundly, and elegantly. We look forward to a highly successful relationship.”

During the two-day conference, PDI also unveiled a much-anticipated addition to its core software offering. As the newest suite in PDI/Enterprise, PDI/Workforce will help supervisors improve productivity and efficiency through effective time and labor management. PDI/Time Clock, the first completed module in the suite, is already fully operational in several companies.

“PDI/Workforce offers a sleek, web-based architecture that’s unlike anything we’ve ever designed before,” said Jim Wade, PDI vice president of development. “Its simple yet powerful design not only streamlines the software deployment process but also provides intuitive controls that require minimal training for our customers. We spent the last several years developing this product, and we couldn’t be more pleased with the final result.”

This year’s Idea Exchange was held at the Grand Hyatt DFW hotel and attracted nearly 100 retailers and petroleum marketers from around the country. The conference concluded on May 6.

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Convenience store operator MAPCO Express Inc. has experienced a security breach by third-party hackers that may have compromised the credit/debit card information of certain MAPCO customers.

MAPCO operates convenience stores in Tennessee, northern and central Alabama, northern Georgia, Arkansas, Virginia, southern Kentucky and northern Mississippi under the MAPCO Express, MAPCO Mart, East Coast, Discount Food Mart, Fast Food and Fuel, Delta Express, and Favorite Markets brand names.

“Our first concern is our customers,” said Tony Miller, vice president of operations for MAPCO. “We regret any inconvenience this criminal act by hackers may have caused and are enhancing our information security efforts to combat future information security threats. Through our internal investigation and collaboration with forensics security firms, we have disabled the malware that was used in this incident while establishing additional safeguards designed to prevent this from happening in the future.”

The incident involves credit/debit card payments for transactions at MAPCO locations between March 19-25, April 14-15 and April 20-21. MAPCO is notifying potentially affected customers because information may have been stolen that can be used to initiate fraudulent credit and debit card transactions. Upon discovering the issue, MAPCO took immediate steps to investigate the incident and further strengthened the security of its payment card processing systems to block future information security attacks.

MAPCO is working with nationally recognized computer forensics investigation firms and the payment card associations to determine what happened and the extent of the information that may have been compromised. MAPCO is also working with law enforcement, including the FBI’s Joint Cyber Crime Task Force, to identify the perpetrator.

MAPCO customers who suspect that their card information may have been compromised are advised to immediately contact their bank, credit union, or credit/debit card company and diligently monitor account activity and credit reports. Customers may also visit www.mapcoexpress.com/security-alert-notification for more information on important steps to take if they believe they were impacted.

Customers with questions may call a special help line that has been set up by MAPCO for additional customer support at 877-297-2081 Monday through Friday 7 a.m. to 10 p.m. Central Time and on Saturday and Sunday from 8 a.m. to 4 p.m. Central Time.

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By Howard Riell, Associate Editor.

Prepaid cards can be tied to financial services such as remittance and bill payments, but that may mean competing with stores offering the same services. Does carrying such cards make sense for every convenience store operator?

No one questions their soaring popularity. Maynard, Mass.-based Mercator Advisory Group Inc., for instance, has estimated that by 2016 the amount of money added to prepaid cards will soar to nearly $685 billion, a 50% increase over 2011. Still, the decision of whether or not to get into financial services must go deeper than that.

“It’s one of those things, if you don’t do it you get left behind,” said Tom Pirko, president of BEVMARK LLC, a retail consultancy based in Buellton, Calif. “The premise that underlies the convenience store business is the ability to get people in and out of the stores quickly and to offer them the things that make their lives easier. Prepaid cards are in essence convenience items. So, as a convenience store operator, would you rather handle these items and enhance your convenience factor or have the sales go to Walmart?”
Ben Jackson, senior analyst for Mercator, suggested that retailers must decide whether or not financial services are part of their mission and, if so, to bolster it with prepaid cards.

“If a c-store operator has a lot of financial services business coming in by acting as a bill payment center and they are just selling prepaid cards off of a J-hook, then they’re not going to want to promote cards too much because it’s a strategic conflict,” Jackson noted. “But if their longer-term strategy is to build card-based services then they really need to make an effort create an environment where employees are well trained and customers are educated about the many uses of the cards and how to load money on them quickly to maintain the convenience element.”

Finding What Works
Cards aside, their are many benefits, especially in urban markets, to offer a host of financial services that include walk-in bill pay, check cashing, money orders and reloadable debit cards.

Those operators might find it profitable to join a reload network, such as Western Union, Green Dot or MoneyGram, Jackson said. “When they become the anchor point for that card relationship they can drive more foot traffic and potentially increase sales of those cards.”

For those c-stores that develop a strategy around financial service, it can be a strong profit driver. “But for those who say, ‘You know what, it’s another product like anything else that I sell,’ it’s going to be very ordinary and never realize its full potential.”

The market being served by a given location will dictate how operators should proceed. “If I’m operating a c-store at a travel center on a main highway, then I probably have less of a need to sell financial services,” Jackson said. “But if I’m operating in a neighborhood where there are lots of customers from diverse economic backgrounds, then it becomes more important for me to become a financial services provider because I really am providing convenience of a different kind at that point.”

Knowing the customer is key. “This category is often thought of as a service for the underbanked, or code for lower-income consumers. But that isn’t always the case,” Jackson said “Sometimes it’s people who think, ‘I need to pay a bill right now because for whatever reason I didn’t get a notification.’ Or, ‘I was traveling and the electricity is going to be shut off if I don’t pay it right away.’ Or, ‘I need to send money to somebody right away.’ It becomes very much a convenience model that extends beyond just goods and into services.”

Weighing Factors
Amer Hawatmeh, president of St. George Oil in St. Louis, which operates four Coast to Coast convenience stores, said his success with prepaid cards and financial services overall depends on the community and its demographics.

“I find that those work really well in stores near colleges and universities in addition to urban areas,” he said.
Allowing customers the chance to reload card balances quickly and easily gives them the opportunity to carry a debit card. “These days you really can’t do anything without a number,” said Hawatmeh. “The old saying was, cash is king. Well, cash is no longer even existent in this country with younger customers anymore. Everything is mobile. Even plastic is an antiquated concept to some college kids these days. They’re looking to pay with their phones.”

Nor are the cards especially profitable anymore, Hawatmeh pointed out. “In the old days, when it was a newer idea, we could charge for the service and get a premium for it. Now everybody is doing it, so it’s not as much of a destination,” he said. “But again, my old philosophy is to try to be all things to all people. We’ve got to keep people walking in the door. Any time you say ‘no’ to a customer you risk losing his loyalty for all your other destinations.”

The profit margin generated by prepaid financial services is also shrinking as the technology continues to develop. “Nowadays you can get a phone app and pay your bills right on the phone,” Hawatmeh said. “You have to adjust your pricing accordingly to avoid losing these customers altogether.”

Bottom Line
The takeaway, Jackson stressed, is that if a company approaches a c-store operator about selling one of these reloadable prepaid cards, that operator should be asking questions about how it is going to drive repeat visits, and how it fits into his overall operational strategy to increase foot traffic and store visits by customers.

The good answer is that the company bringing that prepaid card to him should also be bringing a reload option with that card.

“They should also be bringing ideas about how to market that card and encourage people to come back and do the reloads in his stores,” Jackson said.
Marketing will play a role in how successful this category is as well.

“The first thing chains need to do is train their clerks, so that when somebody brings that card up to the register the clerk knows exactly what that is,” Jackson said. “I know there is a lot of turnover at c-stores, and I know that is a challenging aspect to these types of programs, but they need to let people know, ‘This is what this card does. It’s not a gift card, it’s a reloadable card.’”

The second thing retailers should do is devote space and signage to the products. “Tell customers, ‘Here is what this card is and here’s how you can reload it,’” Jackson said. Depending on the size and scope of the store, they should be working with the provider to do media buys or otherwise trumpet their addition.

“When you market a new movie or a beverage there is a standup display and various other ways of doing that,” Jackson said. “That same kind of activity should happen around a new card that comes onto their racks.”

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