The Retail Perspective

The Illinois Retail Merchants Association
INSIDE:
Facts on
the retail
industry in
Illinois
IRMA: the
Voice of
Retailing
for 56 years
Meet
IRMA’s
Gov’t.
Relations
Team
IRMA
19 S. LaSalle
Suite 300
Chicago, IL
60603
312/726-4600
216 Broadway
Springfield, IL
62701
217/544-1003
www.irma.org
The Retail
Perspective
A retail-focused policy manual
for Illinois legislators
FACTS: RETAILING IN ILLINOIS
Source: PricewaterhouseCoopers LLP, National Retail Federation
Retail Establishments............................................. 36,767
Direct Retail Employment....................................1.1 million
Total Retail Employment Impact.........................1.7 million
Direct Retail Labor Income................................. $31 billion
Illinois Population................................................12.8 million
The Illinois Retail Merchants Association
453,885 476,047 511,433 595,016 810,876 1,129,952 NUMBER OF JOBS BY INDUSTRY IN ILLINOIS
www.irma.org
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Table of
Contents
3
About IRMA
4
Consumer Fraud
-scanner accuracy
-privacy
5
6
IRMA stands at the ready
Few people realize the enormous impact the retail industry has on so many aspects
of the State.
The 1.7 million jobs supported by retail represent one in every
four jobs in Illinois. More than 1.1 million people work directly
in the state’s 140,000 retail stores. Retailers spend more than $31
billion in payroll alone.
Credit and Finance
-check cashing
-interchange fees
Environment
-packaging elimination
-product recycling
7
Food
-food safety
-SNAP
7
Health Care
-coverage mandates
-convenient care clinics
8
Labor
-unemployment insurance
-worker’s compensation
-minimum/living wage
9
A message from the president...
Loss Prevention
-Organized retail theft
-RFID tags
11
Pharmacy
-pharmacy practice act
-medicaid reimbursement
11
Regulation & Licensing
-return policies
-product access
12
Taxes
-vendor collection
-internet tax collection
13
IRMA Board Members
13
IRMA Staff
14
IRMA’s Gov’t Affairs Team
IRMA President &
CEO David F. Vite
The industry accounts for 17 percent of Illinois’ gross domestic
product and generates nearly one-third of the state’s general
revenue funds through sales taxes. It is even more impactful on
the local government level where retail sales taxes generate 50
percent of government revenue.
Retailing is ubiquitous. It resides in every neighborhood across the state and
provides goods and services to each and every resident. Illinois is headquarters to
pre-eminent merchants with stores in communities throughout the country.
The leadership retailers take in Illinois cities, towns and villages, supporting
community organizations and activities are without peer. Many “back-to-school”
events and environmental programs would not be possible without the help of the
retail community.
In this publication you will notice a number of subjects in various policy-making
areas that affect merchants’ ability to efficiently and profitably serve Illinois
consumers. Whether labor regulation, environmental protection, utility costs,
consumer protection, food safety, alcoholic beverage regulations or pharmacy,
state policies affect someone in the retail industry.
Like members of the General Assembly, retailers face elections. But retail
elections happen daily as consumers vote with their feet by choosing to go to
the retailer who serves them with the best quality, best price, best service and
best convenience. If those metrics are not met, the consumer will choose to shop
elsewhere. Competition is the best form of consumer protection.
As you begin the deliberations of the 98th Illinois General Assembly, we hope you
will review the policy statements and justifications included in this publication.
While the impact of retail cannot be over-stated, decisions made by policymakers
throughout the state have a profound impact on the industry.
IRMA is a group that looks to solve problems. If you believe there are problems
needing resolution, please talk with us. We will try to address your concerns. All
on the IRMA staff stand ready to work with you on any issues that affect the retail
industry, its employees and its consumers.
Please contact us with your questions, concerns and ideas. We look forward to
working with you.
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After 56 years, IRMA remains the
“Voice of Retailing” in Illinois
When the leaders of three
retail trade groups in Illinois
decided to consolidate in
1957, they wanted to form a
single organization to not only
maintain a balance between
independent
stores
and
national chains, but between
upstate
and
downstate
companies.
Since that day 56 years ago,
the Illinois Retail Merchants
Association has been the
single “Voice of Retailing”
throughout the state.
IRMA has always served its
membership of more than IRMA members gather in the Illinois Statehouse on May 2 for Retail Day 2012. From left to right:
20,000 stores through a full Emil Mahler, Southtown Health Foods, Doug Cullett, Kroger, Bob Lando, Community Home Supply,
range of services, educational Lauri Sanders, Dominick’s, Barbara Lando, Community Home Supply, John Elliott, Kroger, Greg
programs and publications. Fox, Kroger, Richard Cohen, Macy’s, Bob Jones, American Sale, Joel Baise, Walgreens, Debbie
But it has also served the Garza, Walgreens, Bob Irons, Outback, Brian Huff, Jewel-Osco, Miguel Alba, Jewel-Osco, IRMA
President & CEO David F. Vite, and Richard Kadansky, Marathon Petroleum Company.
entire retail industry with its
dedicated government affairs
to seek input from consumer groups, environmental groups
efforts, keeping retailers
involved in legislation that often directly impacts the and business groups, IRMA President David F. Vite was
asked to facilitate the meetings. The work led to one of the
success of their businesses.
most comprehensive bills the General Assembly dealt with
By staying involved in legislative issues while keeping in during the past 50 years.
its finger on the pulse of retail issues, IRMA has always
played an integral role in state government. Over the years, IRMA has long been involved in both Worker’s Compensation
this involvement has been crucial in creating legislation and Unemployment Insurance for the state. When Illinois
dealing with issues from retail theft and advertising passed its first major reform of Worker’s Compensation
regulations to revisions in the state’s sale tax system and in May 2011, IRMA was at the table. IRMA has led the
successful UI Agreed Bill negotiations since 1994.
worker’s compensation reform.
In the early 1970s, it was IRMA’s Store Theft Prevention
Campaigns that led to public awareness and passage of a
retail theft bill in 1975 which became the model for retail
theft laws in many other states. More recently, in 2011,
IRMA worked with legislators on an Organized Retail
Crime Bill that once again became a model for the nation.
IRMA was heavily involved in legislation deregulating the
electric industry in 1997. When a bi-partisan panel formed
Later that year, IRMA led negotiations in an agreed-bill
process for the Unemployment Insurance Reform Act of
2011. The result was not only a cost savings to the state, but
a long-term savings for Illinois employers.
As one of the largest state retail organizations in the U.S.
and one of the most respected business organizations in
Springfield, IRMA will continue help shape the business
climate by serving as the voice of retailing in Illinois.
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IRMA policies and the issues
Whether you are just starting your legislative career or
you are a seasoned veteran, you will be confronted with a
wide-array of issues once the 98th Assembly convenes on
January 9. At times, it may very well seem overwhelming.
efficiently and oppose those that hinder it. Only through a
healthy and vital retail sector can Illinois consumers enjoy
a wide variety of goods and services at reasonable prices.
Given the uniquely diverse scope of retailing, the issue
areas impacted by state and local laws and regulations are
astounding. The enclosed is intended to give you an idea
of the width and breadth of issues confronting IRMA and
the retailers we represent. We hope you find it helpful.
To give you a head-start, at least on issues impacting
Illinois retailers, this policy book contains examples of
some of the issues that have confronted Illinois retailers
in the past. You may see the proposals contained herein or
completely new ones.
Should you wish to discuss these or any other proposals
that come across your desk, please do not hesitate to
contact us. We look forward to talking and working with
you in the 98th Assembly. Please accept our best wishes for
every success.
The Illinois Retail Merchants Association’s general policy
is to support legislation allowing and encouraging retailers
to grow their operations in Illinois. IRMA will support
policies enabling the free market system to operate
Consumer Fraud
POLICY: Retailers actively serve and protect their customers on a daily basis. It is in retailing’s best interest to have
safe and satisfied customers. It is a process of continual improvement as consumer needs change and thieves become
more creative. Protections must be effective and addressed to narrow, specific, and true harms. IRMA will work to
ensure the enactment of legislation in this area meets these stringent tests and does not inhibit the use of information and
technological advancements.
Scanner Accuracy
Should retailers be required to be perfect when it comes to their advertisements, shelf prices, and checkout scanners?
Some would like to require retailers to make zero mistakes and face exposure to lawsuits in addition to civil penalties if an
advertisement, shelf price, or scanner price is inaccurate regardless of whether or not the error is in favor of the consumer.
Average retailer stores have over 35,000 individual SKU (Stock Keeping Unit). No one can be without error when
handling 1,000 SKU’s let alone 35,000 particularly when there are daily, weekly, and monthly changes to prices. Out of
30,599 items checked, the Federal Trade Commission and the National Institute of Standards and Technology found an
average error rate of 1.87 percent. Approximately half are in favor of the consumer. Retailers should not have an additional
and substantial regulatory scheme imposed upon them for a problem that doesn’t really exist.
Privacy
There is always a tension between privacy and the gathering of information whether it is for security purposes or to better
serve consumers. Retail is the most competitive business sector. Meeting the needs of shoppers is rarely enough. Retailers
are now expected to anticipate those needs.
There are several examples of this in the retail world. Many retailers give customers the opportunity to enroll in some sort
of reward card program. Typically, a rewards card is swiped each time a consumer shops. The consumer’s preferences are
recorded. He/She is then sent coupons specific to their past purchases, given new product offering promotions that may
be of interest, etc. This targeted marketing is more cost effective, therefore enabling the retailer to hold down prices while
better serving those customers who have chosen to participate. Shopping reward cards also help in the dissemination of
product recalls – an important but often overlooked advantage of enrolling.
Another example of the importance of information gathering is return policies. Some retailers track a customer’s return
practices. This enables the retailer to crack down on someone who is gaming the system (e.g. wear and return). Fraudulent
returns add to consumer prices and, if a retailer did not gather such information, would negatively impact the ability of the
vast majority of consumers to conveniently return or exchange merchandise.
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Credit and Finance
POLICY: Credit and finance issues directly impact the bottom-line of both retailers and their customers and can
negatively impact the ability of consumers of all income levels to participate in the free market economy. The financial
system is heavily dependent upon the free flow of information. That system has ensured access to credit that is the envy of
the world. IRMA will oppose efforts to inhibit the flow of information necessary to render appropriate decisions for every
customer and meet their preferences. Likewise, IRMA opposes artificial pricing schemes and interest rates or efforts to
hinder the use of coupons.
Check Cashing
The Illinois Check Cashers Act limits the amount of fees a retailer may charge a customer seeking to cash a check to the
greater of $.50 or 1 percent of the face value of the check cashed. Allegedly, small store fronts are cashing checks for
higher fees than those allowed under existing law, loaning money, etc. A lack of sufficient authority to enforce the existing
Act has been cited as justification for attempting a wholesale rewrite of the Act.
While we agree adequate enforcement authority must be present, and have offered language to specifically address
that problem, IRMA does not support the rewrite proposed last spring in the form of SB 3752/HB 5747. The proposal
impacts every retailer with significant additional paperwork, signage, limits on the ability to pursue bad check writers,
and exposure of business secrets. Most of the provisions have little or nothing to do with enforcement and can only
be considered punitive. The Illinois Department of Financial and Professional Regulation would be granted sweeping
powers to impose additional regulations, reporting requirements, etc. whether by administrative rule or ‘directions, orders,
decisions, and findings’. This has no limit and goes well beyond what is necessary or proper for adequate enforcement of
the existing Check Cashing Act.
Under existing law, if a customer writes a check that is returned for insufficient funds (i.e. a bad check), the business can
attempt to recover the amount of the check, attorney fees, a fee not to exceed $25 for each bad check, etc. This proposal
limits recovery to $25 making it more inviting for people to pass bad checks. This has nothing to do with enforcement of
the existing Check Cashing Act. The legislation only allows the customer to receive cash or a ‘cash equivalent’.
Consumers should not be limited in the manner in which they choose to receive and carry their funds (e.g. wire transfers,
debit card, etc.). This has nothing to do with enforcement of the existing Check Cashing Act. Given the broad discretion
given to IDFPR to determine what information he/she can require from a business and with whom that information may be
shared, this proposal is an invitation for abuse. For example, how many members of local government (e.g. mayor, village
president, city council, village board, etc.) are also business owners who would love to have access to a competitor’s
books, accounts, etc.? Again, this has nothing to do with enforcement of the existing Check Cashing Act.
Interchange Fees
Financial institutions charge any business accepting a credit or debit card
a fee on every transaction. This fee is known as an interchange fee or
swipe fee. The financial institutions collect this fee every time a consumer
uses a credit or debit card to make a purchase. These fees go to the bank
that issued the individual customer the credit or debit card.
Swipe fees average approximately 2 percent per transaction. That fee
is applied to the total purchase ticket including tax. Given the fact that
many retailers operate on margins of less than 2 percent, swipe fees
alone can wipe out profit.
These fees have tripled since 2001 and currently cost retailers around
$50 billion annually. It is not just retailers who pay the cost. In 2009,
these fees cost the Federal government, as an acceptor of cards for
payments, over $116 million. For many retailers, swipe fees are their
second largest operating expense. Only labor costs more than swipe fees.
Swipe fees have increased faster over the past decade than health care
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Credit and Finance
Interchange fees... continued from previous page
costs. To make matters worse, the retailers have absolutely no ability to negotiate or refuse these fees.
VISA and MasterCard set the interchange swipe fees for their member banks. While banks compete with each other
over other services, on swipe fees there is no competition and, therefore, nothing to help hold down costs. In the modern
economy, retailers cannot afford to refuse to accept credit or debit cards. To further cloud the issue, banks prohibit the
retailers from revealing the fees to the consumer.
The U.S. Congress passed, and President Obama signed into law, regulations attempting to reign in swipe fees on debit cards
(credit cards have yet to be addressed). Under the Federal Reserve regulations implementing the law, the nation’s largest
banks (those with assets of at least $10 million) will have their swipe fees on debit cards capped at 21 cents per transaction
plus 0.05 percent of the purchase price plus an additional one-cent for fraud prevention. This will equate to approximately
27 cents on a $100 transaction or about one-sixth of the fees previously applied to a $100 transaction. While banks have the
ability to charge smaller fees on smaller purchases, it appears they are going to apply the maximum cap to all purchases.
While debit cards have been addressed, credit cards have not. There may be efforts by large banks in various states to
undermine current reform on debit cards and future reform on credit cards. It is imperative that any effort to undermine
this pro-consumer, pro-business reform not be supported.
Environment
POLICY: IRMA supports the expansion of recycling options
for consumers. IRMA opposes efforts to ban or tax packaging
products such as plastic or paper bags or Styrofoam or require
consumers to pay additional fees at the point of purchase such as
mandatory bottle deposits. Illinois-only solutions hinder product
distribution and harm Illinois’ competitiveness. Likewise, onesize fits all approaches and mandatory take-back requirements
threaten the operation of retail stores and the safety and welfare
of consumers.
Packaging Elimination
There have long been efforts to try and ban certain items (e.g.
plastic bags, Styrofoam, polystyrene, etc.). These bans are shortsighted as they deprive the consumer of convenient choices
and often impose significantly higher costs on employers.
Additionally, the suggested ‘alternatives’ often turn out to be less
than workable on a number of fronts, including the environment
(e.g. paper instead of plastic).
Product Recycling
IRMA supports the general concept of encouraging recycling. IRMA opposes efforts to require retail stores become centralized
take-back stations. Modern retail stores do not have the capacity to serve as waste depots for all the various items (e.g. a widearray of electronics, appliances, paint, light bulbs, plastic, bottles, cardboard, batteries, pharmaceuticals, etc.).
Furthermore, stores with food items for sale would be put at significant risk for health violations due to the fact this trash
is being returned to the stores. Stores should be free to decide for themselves, in negotiations with their manufacturers
and distributors, what items, if any, they are positioned to handle. Additionally, Illinois is largely a curb-side recycling
state. Certain items in the waste stream are profitable while others are not. Over time, the items that are profitable may
become unprofitable and vice-versa. If profitable items are removed from the waste stream, it eliminates the ability of
waste handlers to provide curbside recycling.
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Food
POLICY: Food retailing is one of the most vital retailing
sectors. IRMA continually works with the Illinois
Department of Public Health and local health departments
to ensure Illinois’ food supply is safe and that the regulatory
system is efficient and practical. IRMA opposes efforts to
require Illinois-specific labels or impose Illinois-specific
requirements on national programs such as SNAP and WIC.
IRMA opposes proposals that interfere with a retailer’s
right to display and sell his/her merchandise.
Food Safety
IRMA is continually engaged with State and local
health departments on ways to improve food safety for
both employees and consumers even though the United
States has the world’s safest food delivery system. The
US Model Food Code should be followed closely to
provide the highest protection with the most standardized
approaches possible.
Most recently, IRMA and State and local health experts
proposed substantial reform of the Food Service
Sanitation Manager’s Certification (FSSMC) process.
Every establishment preparing or serving food to the
public must have someone who is FSSMC certified on premise at all times food is being handled. The reforms included
making Illinois more uniform with the rest of the nation and enhancing food handler training.
The Supplemental Nutrition Assistance Program
SNAP is a federally run program designed to provide the neediest with the foodstuffs they need. The Federal
Government determines what foods can be purchased and the rules for purchasing. Recently, some have proposed
allowing individual states to determine what can or cannot be purchased on the SNAP program.
As SNAP is a national program and a recipient may use their benefits in any state, uniformity is essential. From the
perspective of retailers operating in more than one state, allowing individual states to determine which foodstuffs are
or are not eligible would be a regulatory and compliance nightmare and impose additional and significant cost burdens.
IRMA opposes legislation authorizing the State of Illinois to seek waivers to allow it to determine which foodstuffs
SNAP recipients may receive.
Healthcare
POLICY: IRMA believes the private sector is the best provider of health care services both from a quality and cost
perspective. Coverage mandates artificially increase the cost of health care coverage. Efforts to instill transparency and
competitiveness should be encouraged. Employers are consumers of healthcare and should be treated as such.
Coverage Mandates
Every year brings numerous legislative proposals seeking to require health insurance companies to cover a certain
disease state or condition. While they all seem meritorious on their face, they all contribute to making health insurance
less affordable for employers and individuals.
Currently, Illinois ranks 14th among the states with 49 coverage mandates. Each mandate increases the cost of health
insurance between 1 to 3 percent. Coverage mandates artificially increase healthcare costs making it less possible for
employers and employees to afford coverage.
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Healthcare
Convenient Care Clinics
Convenient care clinics provide consumers with accessible, affordable, quality healthcare in retail settings. The first
clinics began operating in 2000. Today, there are over 1,350 clinics operating in 35 states and Washington, D.C. In short,
convenient care clinics offer consumers in need of non-emergency care a cost-effective option for avoiding crowded and
expensive emergency rooms or having to wait days to see their doctor.
CCC’s are typically staffed by nurse practitioners or physicians assistants, found inside of retail pharmacies, are open
later and longer than most doctor’s offices, do not require appointments, have average waiting times of five minutes
or less, take most insurance, and post
their prices. Forty percent of CCC
patients report that were it not for these
clinics, their only other option would
Convenient Care Clinics
have been to go to an ER. Nearly 30
percent of CCC patients report having
offer consumers in need of CCC’s afford the poor and uninsured
no source of regular medical care.
cost-effective means of securing quality non-emergency care a cost- healthcare for basic needs (e.g. cold,
flu, ear infection, strep throat, etc.). For
example, a strep test at a CCC costs
effective option.
less than one-third of the cost for the
same test at an ER.
Convenient care clinics are regulated to the same degree as doctor’s offices, they utilize quality standards exceeding those
recommended by national medical organizations. As noted above they meet consumers basic healthcare needs, and every
patient who does not already have a primary care physician is directly encouraged by CCC staff to find one. Every patient
is provided a list of primary care physicians in the immediate area who have indicated a willingness to accept new patients.
There are occasionally efforts impose excessive regulatory burdens on CCC’s thereby seeking to limit access to convenient,
quality, and affordable basic healthcare for the citizens of Illinois. For the reasons noted above, IRMA opposes such
efforts to limit access to safe and affordable healthcare.
Labor
POLICY: Much of the cost of doing
business in Illinois, and the less than
stellar economic reputation Illinois
suffers nationally, is from the workers’
compensation system and unfunded wage
and leave proposals and mandates.
These costs place Illinois employers at a
substantial competitive disadvantage with
their competitors in other states. Workers’
compensation in particular must be
comprehensively and effectively addressed.
Unemployment
Insurance
Illinois Gov. Pat Quinn shows the newly signed Unemployment Insurance agreement on Nov. 29, 2011. He is surrounded by representatives of the business community, including (second from left) IRMA Executive Vice-President Rob Karr
and (immediately left of the Gov.) IRMA President & CEO David F. Vite.
Illinois is currently under an ‘agreed
bill’. In 2011, the Assembly passed
legislation negotiated and agreed to by
representatives of Illinois’ employer and labor communities. This legislation will restore Illinois’ UI Trust Fund balance
over the course of five years.
While under an agreed bill, both sides historically oppose any legislation seeking to amend the UI statutes unless both
sides agree to the bill. Typically, any legislation that will add cost to the Trust Fund is opposed.
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Labor
Workers Compensation
In 2011, the most significant reform of Illinois’ workers’ compensation system in decades was undertaken. Even though it
is not yet fully implemented, it has produced cost savings over 8percent. The most significant reforms included: requiring
the employee to make their first choice of physician within a network of physicians created by the employer. However, the
employee is allowed a second choice outside of the network. If the employee forgoes the in-network options, he/she is limited
to one choice outside of network. It required the use of American Medical Association standards to determine impairment
ratings but did allow for some variance based on the age, occupation, and projected future earnings of the injured employee.
Utilization Review was strengthened to ensure medical care delivered is proper and necessary. The Medical Fee Schedule
was reduced by 30 percent. Even at that rate, the State of Illinois still has the third highest Medical Fee Schedule in the
nation. The Wage Differential was changed so that workers’ compensation payments continue until the age of 67 or five
years after the injury – whichever is later. Prior to the reforms, the payments continued for the lifetime of the individual.
If an employee is under the influence of intoxicants, the intoxicants are now presumed to have caused the injury. Workers’
Compensation Commission arbitrators must now be attorneys, follow ethics standards, and base their decisions and
awards exclusively on the evidence in the record of the proceedings.
There are still improvements that could be made (e.g. making clear the workplace must be found to be the primary cause of
the injury or aggravation to a pre-existing condition). Nevertheless, with the reforms not yet fully implemented, workers’
compensation insurance rates have fallen since the reforms were enacted. A good start but still room for improvement
before Illinois can be truly competitive in this area with surrounding states.
Minimum/Living Wage
Currently, Illinois has the fourth-highest minimum wage in the
nation. Illinois is also lagging other states in economic recovery.
Teen unemployment remains above 20 percent and closer to 50
percent in minority neighborhoods.
Artificially increasing the minimum wage only serves to deprive
younger workers of development opportunities and older workers
of working hours, wage increases, benefits, or all of the above.
Service to Illinois consumers is further degraded as retailers
can afford fewer employees. This pushes additional sales to the
Internet meaning the loss of sales tax dollars to the State and local
units of government increases.
Loss Prevention
POLICY: Retail theft costs retailers and their customers hundreds of millions of dollars each year. Higher prices are
the result of this theft. This theft can take many forms. Illinois’ retail theft laws are recognized as among the best in the
country. IRMA will oppose efforts to undermine existing retail theft laws and ensure that retail theft is treated as the
serious crime that it is.
Organized Retail Theft
For decades, retail theft (e.g. an individual stealing an item or two) dominated the concerns of loss prevention professionals.
It was often hard to get law enforcement to take these crimes seriously even though in the aggregate they cost retailers,
and therefore consumers, hundreds of millions of dollars annually.
The 1990’s witnessed the advent of a new kind of retail theft – organized retail theft (ORT). In short, gangs of thieves
literally caravan across the country stealing vast amounts of merchandise in a short period of time. The relatively new
twist is so-called ‘flash mobs’. This merchandise is then fenced.
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Loss Prevention
Organized Retail Theft... continued from previous page
Collectively, retailers lose about $30 billion annually
to organized retail theft. The impact on prices is
substantial and forces retailers to divert billions
of dollars to try and stop ORT – monies that could
be spent building new stores, expanding customer
service, etc. All sectors of the retail community have
been impacted and many consumers unknowingly
purchase these stolen goods.
The criminal enterprises behind ORT make huge
profits which in turn fund other illegal activity such as
drug smuggling, prostitution, money laundering, gang
activity, and, in extreme cases, even fund terrorism.
In 2010, Illinois updated its retail theft statutes to
address ORT. Some examples include: charges may Illinois Gov. Pat Quinn signss a new Organized Retail Crime law on
be brought in any jurisdiction in which any part of Feb. 23, 2011 in Chicago as IRMA Vice President, General Counsel
Tanya Triche (second from right) and Cook County State’s Attorney
the ORT crime was committed; multiple thefts can
Anita Alvarez (far right) watch.
be aggregated to meet the $300 felony threshold; an
individual will be considered an organizer of a continuing financial crimes enterprise if he/she agrees with another
person to commit three or more crimes or if that person commits theft with the purpose of re-selling at least 3 times
in an 18-month period; and, forfeiture laws apply if a person violates the continuing financial crimes enterprise.
IRMA will oppose efforts to increase the felony threshold for retail theft from $300. To do so would only incent
additional crimes. IRMA will take a serious look at efforts to minimize the seriousness of retail theft or to confuse
‘non-violent’ with ‘non-serious’ crimes. Most theft and fraud are non-violent but are as likely to be repeat offenders and
inflict substantial economic damages to businesses, their employees, and their customers.
Radio Frequency Identification (RFID Tags)
RFID is widely used in distribution and retail operations. They are tiny transmitters embedded in individual products or
boxes. Contained within the transmission can be a variety of information including the name and type of the product, how
many are in a particular box, when the product was made, delivered, expires, etc., and the price.
These tags have a transmitting range of a few inches to several feet. They have been extraordinarily successful tools
in the areas of reducing retail theft and increasing efficiencies throughout the chain of commerce. These efficiencies
make it easier for manufacturers, distributors, and retailers to hold the line on costs and keep prices lower than they
otherwise would be.
Special ‘readers’ are required in order to read the signals the RFID tags emit. On Jan. 1, 2012, Illinois legislation took
effect making it illegal to possess such readers with the intent of using it to commit a violation of State law (Public Act
97-0388). In various states, there have been occasional efforts to limit the use of RFID. This was primarily during the early
development of RFID when they were less well understood.
Some proposals would have required retailers to remove RFID tags from a product. The problem with this approach
is the manufacturer may have placed the tag on a box or product. Retailers would have to know the location of every
tag on every product.
Any concerns were addressed with the enactment of Public Act 97-0388. The illegal activity was addressed but the legal
activity was not impacted.
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Pharmacy
POLICY: IRMA is the only statewide association representing pharmacies. Pharmacies play an increasingly crucial
role in the provision of primary healthcare and are therefore vital to the well-being of Illinois’ citizens. There is ample
evidence that a more fully engaged pharmacist can save healthcare systems millions of dollars. IRMA will work to
ensure that pharmacy reimbursement rates reflect the true cost of provision of services and will protect the professional
rights and integrity of pharmacists. This includes ensuring that pharmacists are treated as equals with other medical
providers in terms of reimbursement and payment.
Pharmacy Practice Act
Illinois is currently recognized as having one of the most advanced, forward-looking practice acts in the nation. Pharmacists
must be allowed to use their professional skills and expertise to meet the growing demand for basic healthcare needs
(e.g. vaccinations, medication therapy management, etc.). Pharmacies must be allowed to continue to employ the latest
technology to meet the ever-changing challenges of the healthcare field.
Medicaid Reimbursement
Illinois is in the midst of enacting the first substantial reform of Medicaid in decades. The reforms included provider
cuts. Unfortunately, those cuts were not shared. Pharmacy bore an unfair burden. Illinois must look beyond the decadesold approach of simply paying pharmacists to fill a pill bottle.
Instead, a modernized Medicaid system must use the educational and professional skills of pharmacists to expand
basic healthcare access and lower the cost of healthcare through such programs as medication therapy management.
For example, it would be far more efficient and far less expensive for Medicaid to utilize pharmacists to test and adjust
dosages for patients with high cholesterol, high blood pressure, and diabetics, as a few examples.
Regulation & Licensing
POLICY: Government adds significantly to the cost of doing business
through the regulatory process. In many instances, the bureaucracy
attempts to extend its reach or justify its existence through this process.
IRMA works to simplify the existing regulatory maze while attempting
to halt efforts to further extend the bureaucracy and impose unfunded
mandates on Illinois employers. Finally, IRMA works to ensure that
retailers can continue to meet the needs of each individual customer
as opposed to seeing customers frustrated by one-size-fits-all
approaches that squash innovation and customer service.
Mandatory Return Policies
Retailing is the most competitive economic sector. Customers have
nearly unlimited choices of where to obtain product and spend their
hard-earned money. If they are not served well at one location, another Illinois Speaker of the House Michael J. Madigan sits
down with IRMA members at his office in the Statehouse.
business is dying to fill the void and gain loyal customers. If Illinois
From left to right: Madigan; IRMA Chairman Bob Jones
had mandated a one-size fits all return policy years ago, the market
of American Sale in Tinley Park, and IRMA Director
would not have evolved to meet the changing needs and demands of
Amanda Conochalla of McDonald’s Corporation.
customers. The State should avoid one-size-fits-all approaches and
recognize that while some businesses may not serve their customers as we believe they should, they do so at their own peril.
Product Access Restrictions
Retail stores are filled with items that can be used by someone with evil motives to do harm to themselves or others.
Occasionally, in response to some evil deed, there will be proposals to move whatever product was misused behind the
retail counter, require identification, and keep a sales log. This is neither appropriate nor realistic. If every item that could
be misused were moved behind the counter, nearly everything in a hardware store, and significant portions of other stores,
would be behind a counter. Sales logs take tremendous manpower and law enforcement will tell you that they are virtually
useless as a law enforcement tool. Checking ID’s on every purchase slows the checkout aisle to a crawl punishing the
99.99 percent of law abiding customers and hurting that retailer’s customer service.
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Taxes
POLICY: The tax climate of a state is one of the biggest variables when a business decides whether to locate or open in
a certain location. If that employer can operate more efficiently and realize a better rate-of-return in a nearby state with
a better tax climate, they will do so. With 2/3rds of Illinois’ population within a 40-minute drive of a bordering state, it is
imperative that Illinois tax climate be as low and broad-based as possible. IRMA will oppose efforts to alter or decrease
the vendor collection allowance which is the portion of the sales tax Illinois retailers are allowed to retain as a partial
reimbursement for their costs of administering the State’s sales tax. The tax laws must apply uniformly, be broad-based,
and apply to one base. Likewise, the Illinois Department of Revenue should be the sole interpreter and enforcer of Illinois
tax laws and regulations.
Vendor Collection Allowance
Unknown to most people, retailers are responsible for interpreting, administering, collecting, and remitting the occupation
and use taxes also known as the sales tax. In return for the expenses incurred fulfilling this important mission, retailers
are allowed to retain 1.75 percent of the sales tax they collect. This is known as the vendor collection allowance. This
allowance serves as a partial reimbursement. If retailers were to be fully reimbursed for their costs, independent studies
conclusively demonstrate the allowance would have to be nearly four percent. The Illinois Department of Revenue (IDOR)
retains 2 percent of the monies they collect on behalf of local governments. While IRMA is not asking that this allowance
be increased, we adamantly oppose any effort to reduce or eliminate the existing allowance.
Internet Sales/Use Tax Collection
Under Illinois law, anyone purchasing an item from a remote seller (e.g. Internet, catalogue, etc.) must pay the appropriate
sales tax. Normally, the seller collects and remits the sales tax on behalf of the purchaser. However, many remote sellers
do not collect and remit the sales tax. In those cases, the purchaser is required to remit the sales tax to the Illinois
Department of Revenue (IDOR). This puts an unfair burden on Illinois consumers many of whom are not aware of this
requirement. Furthermore, Illinois’ brick-and-mortar retailers are placed at a competitive disadvantage with their remote
selling competitors because those competitors are not charging, collecting, and remitting sales tax. These remote sellers
use two US Supreme Court decisions, rendered before the invention of computers and the Internet, stating sellers must
have physical nexus in a jurisdiction before they can be required to collect and remit sales taxes.
In January, 2011, Illinois passed legislation re-defining nexus. Under this new law, if a remote seller had a link on an
Illinois entity’s website allowing visitors to that website to click through and make purchases from the remote seller,
the remote seller would be considered to have nexus and, therefore, would be required to collect and remit Illinois sales
tax. Many remote sellers removed their links from Illinois websites so as to continue to avoid having to charge and remit
Illinois sales tax. This action allowed the remote sellers to continue to use the Illinois sales tax as a competitive advantage
over brick-and-mortar retailers and continued to place the burden of remitting the sales tax on Illinois consumers.
Illinois is losing over $500 million in revenue because remote retailers are unwilling to collect sales tax. They do it in
other states and they should do it here. To allow them to do anything else puts Illinois retailers at a substantial competitive
disadvantage and Illinois consumers who make purchases from a remote seller in an unfair position. IRMA will work to
ensure that sales tax that is due and owing is paid and the State looks at a sale as a sale regardless of the channel through
which the sale was made.
CONTACT IRMA:
Email: [email protected]
Website: www.irma.org
19 S. LaSalle
Suite 300 Chicago, IL 60603
312/726-4600
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216 Broadway
Springfield, IL 62701
217/544-1003
IRMA Board of Directors
OFFICERS
DIRECTORS
Katie Andrios
G.W.K. Enterprises, Inc.
Brian Huff
Jewel/Osco
Brian Baer
Dominick’s Finer Foods
Bob Irons
Outback Steakhouse
Billie Colley
J. C. Penney Company, Inc.
Keith Jones
7-Eleven, Inc.
Amanda Conochalla
McDonald’s Corporation
Richard Kadansky
Marathon Petroleum Co.
Richard Cox, RPH
Brown Drug Company
Tim Lehan
Lehan Drugs
Jim Baum, SECRETARY
BGH Here’s Hallmark Shop
John Curley
Best Buy Company
Kevin Lundy
YUM! Brands, Inc.
Brian Ziegler, TREASURER
Ziegler’s Ace Hardware
John Elliott
The Kroger Company
Emil Mahler
Southtown Health Food, Inc.
Debbie Garza
Walgreen Company
Matthew A. Noonan, III
Noonan True Value
Shelly Goodman
ATT Consumer Markets
Lauren Rowley
CVS Caremark Corporation
Jim Havey
Young’s Inc.
Robert Wiegert
Schnuck Markets
Thad Hellman
Target Corporation
Jason Wetzel
WalMart Stores, Inc.
Bob Jones, III, CHAIRMAN
American Sale Corporation
Richard Goodrich, VICE-CHAIR
The Home Depot
EXECUTIVE COMMITTEE
Richard Cohen
Macy’s
Linda Johnson
Western Springs True Value
Misty Redman
Sears Holdings Corporation
Carl Schnakenberg
Chicago Brass
IRMA Staff
David F. Vite
President & CEO
312/726-4600
[email protected]
Tanya Triche
Vice President, General Counsel
312/726-4600
[email protected]
Dale Basowski
Executive Assistant to the President
312/726-4600
[email protected]
Rob Karr
Executive Vice President
217/544-1003
[email protected]
Peter Gill
Communications Manager
312/726-4600
[email protected]
Debbie Cole
Executive Assistant/Gov’t Affairs
217/544-1003
[email protected]
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Meet IRMA’s Government Affairs team
David F. Vite, President & CEO
David F. Vite joined IRMA in 1978 as a Field Representative. By 1981 he became Vice President of
Government Affairs, directing all legislative and governmental affairs activities for IRMA and serving as
a liaison for members with elected officials, and state department representatives.
He was named Executive Vice President in 1983 and in May 1985 he became just the third president
in IRMA’s history. Vite has served for more than 20 years as a representative to the Illinois Department
of Employment Security Advisory Board and the Workers Compensation Advisory Board. Vite also
served as the lead spokesman for the business community during the state’s unemployment insurance
negotiations in 2002. Also in 2002, Vite served as the Speaker of the Illinois Third House.
Besides his work with IRMA members and state officials, Vite served two years on the Board of Directors and Executive
Committee of the National Retail Federation and chaired the National Association of State Retail Association Executives
for one term.
A native of Wisconsin, Vite graduated from the University of Wisconsin – LaCrosse before starting his career as
Executive Director of the Woodstock Chamber of Commerce and Industry.
Rob Karr, Executive Vice-President
Rob Karr, who joined the IRMA staff in 1994, is responsible for coordinating state government relations
and lobbying activities in Springfield, and editing This Week in Springfield, IRMA’s journal of legislative
activity in the State House.
In conjunction with his responsibilities at IRMA, Karr serves as the legislative coordinator for the
Illinois Food Retailers Association and the Midwest Hardware Association. Additionally, he has the
responsibility for IRMA’s membership development efforts.
Karr serves on the Illinois Attorney General’s Franchise Advisory Board and the Illinois Department of
Public Health’s Food Safety Advisory Committee. In 2009, he was appointed by Governor Pat Quinn to
serve on the temporary Pension Systems Modernization Task Force. Karr also coordinates the WIC Vendor Training Program.
Prior to joining IRMA, Karr was Associate Director of Government Affairs for the Illinois Manufacturers Association
for two years and a campaign aide in several statewide and congressional races. He is a is a graduate of Illinois State
University, from which he received a bachelor’s degree in Political Science with a minor in history.
A native of Chicago, Karr is a long-time resident of Jacksonville where he resides with his family.
Tanya Triche, Vice-President, General Counsel
Tanya Triche, who joined the IRMA staff in 2008, is based in IRMA’s downtown Chicago office.
She directs the activities of the Chicago Retail Merchants Association where she advocates on behalf of
the retail industry in Chicago’s City Hall and in front of the Cook County Board of Commissioners. She
also assists with retail advocacy efforts in the Illinois State Capitol.
Prior to joining IRMA, Triche worked as a staff attorney and legislative assistant for the Chicago City
Council’s Committee on Finance, analyzing issues of revenue and public policy and working with
community leaders and corporations to draft resolutions and municipal ordinances.
Triche is a member of the Chicago Bar Association and the Chicago Women in Government Relations. She earned a Doctor
of Jurisprudence from Vanderbilt University Law School and a Bachelor of Arts Degree from the University of Michigan.
Admitted to practice in Illinois and the 7th Circuit Court of Appeals, she resides in Chicago.
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A publication of the Illinois Retail Merchants Association - January 2013
The Illinois Retail Merchants Association
19 S. LaSalle Street, Suite 300, Chicago IL 60603
216 Broadway, Springfield, IL 62701
www.irma.org