Regulatory Rundown: February/March 2024 Michigan Retailer

Regulatory News & Trends

NRF and Appriss Retail Report: $743 Billion in Merchandise Returned in 2023

The National Retail Federation (NRF) partnered with Appriss Retail to pair its customers’ returns data with NRF survey responses to get a snapshot of consumer returns trends.

• $743 billion in merchandise was returned in 2023.
• For every $1 billion in sales, the average retailer incurs $145 million in returns.
• The total return rate as a percentage of sales is 14.5%.
• Online sales see a higher return rate of 17.6% compared to 10.02% for pure brick-and-mortar returns.
• The percentage of abuse and fraud impacting total returns is 13.7%.
• Abuse and fraud accounted for $101 billion in losses.

Among the types of return fraud retailers say they have experienced in the past year, nearly half (49%) cited returns of used, non-defective merchandise, also known as wardrobing, and 44% cited the return of shoplifted or stolen merchandise. Over one-third (37%) said they experienced returns of merchandise purchased on fraudulent or stolen tender and one-fifth (20%) said they have experienced return fraud from organized retail crime groups.

Retail foodservice innovations and opportunities

FMI’s consumer research The Power of Foodservice at Retail 2023 found that deli foodservice dollar sales grew to $49.9 billion in the 52 weeks ending Oct. 7, 2023, up 4.2% from the year-ago period. Shoppers reported wanting many features traditional restaurants or takeout services offer, including a variety of cuisines, online ordering capabilities (62%) and easy pick-up (59%) or delivery (48%). For the in-store bakery, nearly half (49%) of shoppers prefer ordering specialty bakery items using technology and 47% would use technology to design and order specialty bakery items. The report noted openings to build on foodservice success such as:

• Value Equation: Play up the comparative value on how much farther consumers’ dollars go at retail versus at restaurants.
• Restaurant Playbook: Have a deli-prepared foods menu available online, enable advance ordering through apps, and offer drive-through or curbside pickup.
• Meal Planning Support: Offer meal bundles, use in-store displays highlighting ingredients for specific meals, provide meal ideas through apps, and offer more heat-and-eat choices for the 40% of customers looking for meal planning assistance.
• Signature Items: Focus on signature foodservice items to distinguish from the crowd.

NRF 2024: Retail’s Big Show (held in New York City Jan. 14-16) featured a Foodservice Innovation Zone highlighting advanced cooking equipment like ventless ovens and automated cooking robots; IoT and AI solutions for real-time monitoring and management of customer flow, temperature and food case monitoring, inventory, equipment maintenance, energy usage and waste; micro markets and fresh food vending machines; and drivethru technology, equipped with advanced ordering boards, POS systems and language translation services, to handle on-the-go orders, traffic flow, and order pickup at the drive-thru as well as curbside.

MRA members potentially selling firearms and/or firearm safety devices:

The Michigan Department of Treasury issued a notice related to Public Acts 14-15 of 2023 (SB 81–82) that took effect on Feb. 13 exempting firearm safety devices (including gun locks, gun cases, gun safes, lockboxes, etc) from the state’s sales and use taxes. The notice notes the sales and use tax exemption does not begin until May 13, 2024 and runs through Dec. 31, 2024.

Treasury Notice: Sales and Use Tax Exemption for Firearm Safety Devices to Take Effect May 13, 2024

This runs counter to the law’s effective date of Feb. 13, which is obviously what the legislature intended but screwed up with the inclusion of language “beginning 90 days after the effective date of the amendatory act.” When the bills did not get immediate effect and instead, by law, were slated to take effect 90 days after sine die that pushed out the actual effective date to May 13.

Please note the law also requires retailers selling or transferring firearms to provide a written notice to the purchaser and post in a conspicuous manner at all points of sale on the premises where firearms are sold a notice that says the following: “The state of Michigan has exempted the sale of firearm safety devices from the sales and use tax imposed by this state through December 31, 2024.”

Deadlines and Reminders

Mar. – April 2024:

• Mar. 2 – Electronic Reporting of MIOSHA Form 300A – Summary of Work-Related Injuries and Illnesses (Establishments with 250 or more employees).
• March 30 – Renew food establishment licenses online at MDARD (Current licenses expire April 30).
• March 30 – Renew bottled water dispensing machine license at MDARD (Current licenses expire April 30).
• April 15 – Renew and print liquor licenses online at MLCC (Current licenses expire April 30).

Monthly reminders:

• Sales & Use Tax – Monthly & EFT – On or before the 20th day of the following month.
• Withholding Tax – Monthly & EFT – On or before the 20th day of the following month.
• Retailer’s Prepaid Wireless 911 Surcharge – Within 30 days of the close of each month. Receipt of a complete Form 5012 is required regardless of payment method.

Quarterly reminders:

• Corporate Income Tax (CIT) Estimated Returns and Payments (Jan. 15, April 15, July 15, Oct. 15).
• Sales & Use Tax – Quarterly & EFT – On or before the 20th day of the month following the quarter (Jan. 20, April 20, July 20, Oct. 20).
• Withholding Tax – Quarterly – On or before the 20th day of the month following the quarter (Jan. 20, April 20, July 20, Oct. 20).