Newsletter February 2, 2023

IN THIS ISSUE

POLICY

• Legislative Update
• WR weighs in on police pursuit bills
• Senate panel advances multiple-accomplices ORC bill
• Combating Organized Retail Crime Act reintroduced in Congress
• Paid family and medical leave premium rate could decrease to 0.76% next year
• AG’s office recovers $9.3M in stolen unemployment money

ECONOMY

• Why the Fed’s next interest rate decision is hard
• Consumers plan to increase Valentine’s Day spending to nearly $26 billion
• 2022 ends with strong economic growth 

ON THE LOCAL FRONT

• New challenges confront efforts to revitalize Downtown Seattle

RETAIL THEFT & PUBLIC SAFETY

• WR teams with AG Ferguson on retail theft in the Wenatchee Valley
• License plate reader technology proactively protects employees, customers, and property

TRENDS

• Secondhand goods present lucrative sales opportunities for retailers

SAFETY

• A proactive safety approach eliminates the “after trap”

Legislative Update

Today marks the 24th day of the 105-day session, and WR's policy and government affairs team (pictured right) are continuing to review bills closely. As of today, legislators have filed 1,822 bills, an increase of 175 over the previous week.

HB 1155 is purported to protect health data privacy relating to collecting, sharing, and selling consumer health data. WR has significant concerns about the bill as currently written because of the overly broad scope. The bill would impact the delivery of low-cost access to healthcare which has become a primary directive over the past years. Onerous and overbroad restrictions and requirements such as those related to geofencing, consent and deletion obligations, set the stage for unfair advantage. This bill is scheduled for executive session in the House Committee on Civil Rights & Judiciary tomorrow morning, February 3 at 10:30am.

SB 5160 would increase the punishments for retail crimes that involve multiple accomplices, with increased penalties for cumulative values of involving multiple thefts over a 180-day period from one or more businesses. If the same criminal stole goods in several counties, each county could prosecute based on the cumulated rate. WR strongly supports this bill and thanks Sen. Nikki Torres (R-15-Pasco) for introducing this legislation. Executive action was taken in the Senate Committee on Law & Justice last Thursday and passed for a second reading in the Rules Committee the following day.

HB 1131 and SB 5154 would enact the Packaging Extended Producer Responsibility—also known as the WRAP Act—and create a beverage container reimbursement (BCR) program. WR is working with stakeholders on the definition of “producer” and sharing comments on improving the BCR program. WR supports the voluntary nature of the takeback sites. HB 1131 is scheduled for executive session in the House Committee on Environment & Energy this morning at 8:00am and SB 5154 is scheduled for executive session in the Senate Committee on Environment, Energy & Technology tomorrow, February 3 at 8:00am.

SB 5217, referred to as the Ergonomics bill, would give the state authority to adopt ergonomics regulations to purportedly prevent musculoskeletal injuries. WR strongly opposes this bill’s one-size fits all approach which will be difficult and costly for businesses to comply with while yielding minimal results. No additional hearings have been scheduled since the January 24 hearing in the Senate Committee on Labor & Commerce.

SB 5482 would replace the state’s Business & Operations (B&O) tax with a margins tax—modeled on legislation passed in Texas. Sen. Noel Frame (D-36-Seattle) is the prime sponsor of the bill. A margins tax would allow deductions, which the current B&O tax system does not. WR has significant concerns on the increased tax burden this change could have on many of our members. No additional hearings have been scheduled since the public hearing in the Senate Committee on Business, Financial Services, Gaming & Trade on January 26.

WR weighs in on police pursuit bills 

This week Washington Retail testified in support of several bills designed to allow law enforcement to once again pursue suspected criminals.

Three years ago, when the legislature passed several police reform bills, it severely restricted the ability of law enforcement to pursue suspects. Today many law enforcement agencies feel powerless once a suspect leaves a crime scene in a car. Under current law, for example, if a suspected retail thief leaves a store with stolen product on their person, once they get into their getaway vehicle, the police are not allowed to pursue them.

Considering that Washington State does not have a “concealment” of product law, which is when someone hides goods on their person or in a bag, backpack, or other with the intent to steal, it creates somewhat of a predicament for law enforcement and retail loss prevention staff. Since the suspect cannot be apprehended in a store while concealing product, the only opportunity to catch the suspect is in the distance between the store’s exit door and their car. This narrow window of time creates a dangerous scenario and could lead to an employee, customer, law enforcement, or even the crook getting hurt or killed. This puts public safety at risk. 

Allowing police to safely pursue suspects, with specific guidelines and regulations to ensure safety, will protect innocent bystanders, employees, and criminals themselves from potential harm. 

WR wants to reemphasize that enacting meaningful pursuit legislation is not the only solution to solving public safety problems, retail theft, and organized retail crime. It is, however, one crucial part of a multi-pronged approach to address these serious and pressing community issues.

Read more

Senate panel advances multiple-accomplices ORC bill

The state Senate Law and Justice Committee today voted last week to advance Sen. Nikki Torres’ legislation to further define the crime of organized retail to theft. 

Under SB 5160, a person would be guilty of second-degree organized retail theft for stealing property with a cumulative value of at least $750 with two or more accomplices who enter the store within five minutes of one another.

“Thank you, Senator Torres, for bringing this legislation forward,” Mark Johnson, WR Senior VP of Policy & Government Affairs told the committee during a hearing last week. “This is an important tool in the fight against organized retail crime.”  

According to Johnson, Washington ranks second in the nation in theft per capita, with more than $2.7 billion in goods stolen from retailers every year. This leads to increased costs to consumers and approximately $250 million in lost tax revenue to state and local governments.

Larry Shannon with the Washington State Association for Justice, which had opposed a similar measure (SB 5781) last session, testified that the current bill is “clean” and no longer contains problematic language that prevented his organization from supporting previous versions of the bill.  

“This bill addresses a very significant problem, and we commend it to you,” he told the committee. 

SB 5160 has been passed to the Rules Committee for a second hearing.

Combating Organized Retail Crime Act reintroduced in Congress

On Monday, Senators Chuck Grassley (R-IA) and Catherine Cortez Mastro (D-NV) have introduced the Combating Organized Retail Crime Act of 2023. A summary of the bill can be viewed here. WR strongly supports the bill, as does the NRF, which has worked closely with the Senators on the reintroduction of a similar bill last session.

The bill does the following:

• Seeks to make amendments to Title 18 of the U.S. Code, including adding a dollar value threshold of $5,000 or more in a 12-month period.
• Establishes a Center to Combat Organized Retail Crime to be led by Homeland Security Investigations (HSI). The Center is tasked with coordinating federal-level ORC investigations and intelligence sharing, and supporting the retail industry and state and local law enforcement in their ORC-related investigative activities.
• Requires the Department of Homeland Security and Department of Justice to review their existing training and technical assistance programs and find ways to increase their prioritization of ORC within these programs.

Paid family and medical leave premium rate could decrease to 0.76% next year

By: Emily Makings

Washington Research Council

Two weeks ago, the Senate Committee on Labor & Commerce approved SSB 5286, which would make changes to the paid family and medical leave (PFML) program premium rate structure. As I noted at the time, in the near term, premium rates under the bill would be higher than expected under current law in order to build up a reserve for the program.

But the legislative task force on paid family and medical leave premiums had recommended that money from the general fund–state (GFS) be used to seed the reserve, which would lessen the impact on premium rates. The current budget appropriates $350 million to the family and medical leave insurance (FMLI) account, but the budget specifies that it may only be used to the extent necessary to keep the account out of deficit at the end of the current biennium. (Gov. Inslee’s proposed 2023 supplemental would reduce the $350 million appropriation to $80 million.) The legislative task force had recommended that, after covering any deficit, the remainder of the $350 million should seed the proposed PFML reserve.

Last week, an updated fiscal note for SSB 5286 was posted. It includes an estimate of what the premium rates would be if SSB 5286 is enacted and the Legislature allows the program to use the $350 million for a reserve. The chart compares the estimates. With the seed money, the premium rate under SSB 5286 is estimated to decrease to 0.76% in 2024 and then increase to 0.91% in 2025. Without the seed money, the rate under SSB 5286 would increase to 0.90% in 2024 and 0.97% in 2025.

Read the entire article

AG’s office recovers $9.3M in stolen unemployment money

Attorney General Bob Ferguson announced last week that his office recovered another $9.3 million stolen as part of a massive fraud carried out against states across the country. Fraudsters had deposited the money into Bank of America accounts. Last week, a King County Superior Court judge ordered Bank of America to return the stolen funds to Washington state.

Ferguson’s Complex Litigation Division has now used forfeiture laws to recover $33.7 million stolen from the Employment Security Department. The Attorney General’s team is recovering stolen money sitting in bank accounts and other institutions such as PayPal. AG Ferguson is the only state attorney general to exercise state asset forfeiture powers to recover these taxpayer funds.

During the pandemic, sophisticated fraud rings used identity data harvested from data breaches to steal tens of billions of dollars from at least 11 states, including Washington.

The Attorney General’s Office anticipates additional recoveries from other financial institutions in the months ahead. The recovered resources go back to the state and federal unemployment systems.

“Our initiative is delivering results for taxpayers,” Ferguson said. “Fraudsters parked this money in accounts with banks and financial institutions all over the country. We’re going directly to those institutions to get it back. We are not slowing down.”

A federal watchdog estimates that the nationwide unemployment fraud totals $45.6 billion. According to media reports, Washington’s Employment Security Department experienced approximately $645 million in fraud—roughly 1.4%. Washington’s recovery from pandemic-related unemployment fraud totals more than $400 million.

Why the Fed’s next interest rate decision is hard

Bill Conerly, Sr. contributor

Forbes

The Federal Reserve’s policy making committee will meet January 31-February 1, 2023, and their decision will be tough, more difficult than any of their 2022 choices. Inflation seems to be dropping, but at possibly unrealistic rates, while labor markets continue to show plenty of strength in the economy. With mixed signals coming to the committee, none of their possible choices is obvious.

Inflation is issue number one for the Fed, and the news is pretty dang good. The Fed watches the Personal Consumption Expenditures Price Index excluding food and energy. The most commonly watched calculation, the 12-month percent change, dropped to 4.7% in the last reading from its peak of 5.4% in February 2021. That’s not a huge drop, but the 12-month change misses short-term swings. The last three-month changed, annualized, was just 3.6%, down from 5.1% three months prior. Now that’s a significant deceleration.

Economists are usually skeptical about month-to-month blips in any time series. Our underlying data reflect sampling errors and idiosyncratic variation. We take a couple of months of change with a grain of salt. Still, the recent figures bring hope that the worst inflation lies behind us.

Read the rest of the article

Consumers plan to increase Valentine’s Day spending to nearly $26 billion

Consumers are projected to spend $25.9 billion on Valentine’s Day this year, up from $23.9 billion in 2022, an 8.4% increase.

More than half (52%) of consumers plan to celebrate and will spend an average of $192.80, up from $175.41 in 2022, nearly a 10% increase year over year.

Of the expected $17 increase in per-person spending, $14 will come from gifts for pets, friends and co-workers, as well as classmates and teachers.

Those aged 35 to 44 will spend more than other age groups, with an expected $335.71 on average for gifts and other Valentine’s Day items, about $142.91 more than the average Valentine’s Day shopper.

Read more

2022 ends with strong economic growth 

As predicted, the economy grew at the end of 2022 with GDP expanding 2.9% in the fourth quarter. Consumer spending rose 2.1%, which was higher than business investment (up 0.7%), and plummeting residential investments, which fell 27% due to higher interest rates.

Read more from the U.S. Chamber

New challenges confront efforts to revitalize Downtown Seattle

“I’ve never lived in a city that’s collapsing around me,” wrote Jon Talton, business columnist for The Seattle Times, in an ominous opening sentence of his latest column on the continuing problems facing downtown Seattle.

Spurred by the sudden closure of the Nike store in early January, Amazon’s decision to pull its workers out of the Port 99 office tower, and the announcement later in the month that the Regal Meridian 16 Theater is closing, Talton takes a hard look at the current situation in downtown. Among the startling statistics he shared, the retail vacancy rate downtown is 13.5%, up from less than 2% in 2019 (in the same time period, Bellevue’s retail vacancy rate dropped from 5% in 2019 to 1.5%).

While the entire Talton column is well worth reading, here’s a brutally honest section:

Excuses aside, today’s urban dystopia was unimaginable when I arrived here 15 years ago.

Whether from a consumer or business standpoint, we may be witnessing the demise of tolerance for bad urban experiences on the other side of this pandemic.

The conceit that places like Seattle could get away with street crime and urban disorder, chalking it up to a big city with big-city problems — and people would still come and invest — is being put to the test.

No doubt, Seattle is being severely tested as we emerge from the pandemic.

WR teams with AG Ferguson on retail theft in the Wenatchee Valley

Attorney General Bob Ferguson and WR President and CEO, Renée Sunde, were featured speakers last Friday at a Public Safety and Retail Theft Forum in Wenatchee.

Sunde and AG Ferguson both spoke about how increasing retail crimes affect public safety in our country, Washington state, and local communities. In response to the increase in these sophisticated crimes, he formed the Washington Organized Retail Crime (ORC) Task Force last year. The Governor has allocated the task force $2.265 million of the $3 million the AG had initially proposed. WR actively supports the task force efforts and commends the support from the AG and Governor’s offices.

The event provided an opportunity for many key local public figures and officials to meet before the doors opened for the attendees, including Wenatchee Mayor Frank Kuntz, East Wenatchee Mayor Jerrilea Crawford, Chelan County Sheriff Mike Morrison, Chelan County Commissioner Shon Smith, and numerous chiefs of police in the area.

Over 90 attendees participated in the forum luncheon, sponsored by the Wenatchee Valley, Lake Chelan, and Leavenworth Chambers of Commerce and hosted in the Wenatchee Convention Center. The community was well-represented by a diverse group of local public figures, law enforcement, loss prevention officers, business owners, and employers.

AG Ferguson and Sunde will join in a similar presentation in Spokane on Friday, February 10. Registration is now open for the breakfast event.

License plate reader technology proactively protects employees, customers, and property

As organized retail crime (ORC) has continued to rise, so have violent acts, often accompanying theft and robbery incidents. Public safety has become an increasingly relevant subject for retailers, both in consideration of their employees and their customers.

According to FBI data, of more than two million assaults reported by law enforcement agencies across the country in 2020, more than 82,000 (about 4 percent) took place in retail stores. A recent survey of asset protection managers revealed that 76% reported physical assault against retail employees relating to ORC, and 40% reported attacks involving weapons.

While increases in aggression and violence have forced some retailers to close, employers are looking for ways to protect their employees and customers. They need tools to address potential threats.

Most in-store security measures are helpful during crime events, such as cameras and secure locking merchandise cabinets. Still, these tools don’t help prevent crimes and violent acts before they happen. Installing perimeter security equipment, such as automatic license plate readers (ALPR), can help broaden security awareness throughout a retail business’s property. These systems are becoming increasingly affordable and can immediately notify and alert retailers when vehicles with known license plate numbers first enter their parking lots.

Read more from Loss Prevention Magazine

Secondhand goods present lucrative sales opportunities for retailers

Although December retail sales numbers were not as high as some had hoped, a bright spot in the sector is emerging: The resale of previously-owned goods, which is building momentum.

Retailers see the opportunity. J. Crew has launched a resale program specializing in vintage styles.

In 2021, the global resale market was approximately $120 billion in 2021, according to Morningstar data, and estimates that the market could hit $300 billion by 2031—three times the rate of the primary market.

The trend is also of crucial importance as the issues of waste, sustainable consumption, and recycling are of gaining consumer support—especially from younger consumers. What's good for the planet can be good for business. Green practices are increasingly tracked by those with a greener mentality and are appealing to consumers who prioritize environmental responsibility.

Adding secondhand items isn't just a new revenue opportunity for retailers. It can help drive traffic to brick-and-mortar stores and e-commerce sites, leading to sales of new items. Resale can also be a doorway to luxury goods that may have been financially out of reach when

Growth of the resale market will have a significant impact on the retail businesses in several ways, including:



• Changing consumer behavior: As consumers become increasingly conscious of their purchases' environmental impact, they may look for resale options instead of buying new products.
• New revenue streams: Retailers can offer buy-back or trade-in programs, sell refurbished products, or partner with resale marketplaces to reach new customers.
• Building a brand image of sustainability: By embracing resale and circular economy programs, retailers can boost their brand image and appeal to consumers who prioritize sustainability.
• Buffer supply chain disruptions: While the resale market can lessen disruption of supply chain deliveries, it will also affect demand for their current products. Retailers will need to adjust both sourcing and inventory strategies.

The resale market trend's growth will bring challenges and opportunities for businesses. Retailers that prepare, adapt, and innovate will have the advantage.

A proactive safety approach eliminates the "after trap"

Unfortunately, news headlines of worker fatalities often include the news that the employer made changes after it was too late, such as, “Safety made top priority after worker death.” The unfortunate part of the story is that it took an accident to make the workplace safe—sometimes referred to as the “after trap.”

Management often tends to focus on the basics of operating the business and sets safety issues aside as something to be addressed at a later date. It is usually after a bad accident, a terrifying near-miss, or a fatality that safety finally becomes a priority—when it is too late.

Safety must be a core value embedded into the operating principles and strategies of all businesses. Proactive approaches to safety can lower operational costs and tragic outcomes simultaneously.

However, some businesses fall into the “after trap” and only begin to focus on safety after tragedy has struck – resulting in higher workers’ compensation costs—and most importantly—human costs.

Making a proactive effort to maintain a safe workplace and building a strong safety system are core foundational principles for companies to protect workers and the bottom line. Our Safety Ambassador Program can help members cultivate a workplace where safety becomes instinctive. Additionally, the RS Safety Library has a wealth of resources to help our members avoid falling into the “after trap.”

Our safety team is available to help members with safety plans and topics for safety meetings. Contact us 360-943-9198 x122, or safety@waretailservices.com.

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We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.

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