C-Store Legislation Outlook for 2017
2016 was a successful year for the convenience retail and gas station industry. Now 2017 is here, and soon, a new President will be inaugurated. Most citizens are expecting change, but many are not sure what kind and to what extent. For many business owners, whether small or large, new legislation on the horizon is particularly concerning. When surveyed, 55% of convenience store executives expressed unease about regulations and legislation in 2017.1 While legislation should always be a priority for convenience and grocery store owners, this year, store owners should be watching closely.
Here are some of the issues expected to be of importance for the next 12 months:
The Overtime Rule
The proposed overtime rule that would allow almost 5 million more American employees to be eligible for overtime pay by doubling the salary threshold has recently been halted by the House of Representatives. In an effort to prevent the originally passed legislation from taking effect, the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act was passed which pushed the date back from December 1st to June 1st. While the delay gives retailers more time before major changes are required, retailers are advised to continue planning for the possibilities.2
Minimum Wage Changes
2017 is expected to bring about even more challenges in the form of labor expenses with planned increases to the minimum wage rates in many states. According to CNNMoney.com, 21 states, 22 cities, four counties, and one region will see employee pay raises this year. With wage increases that range from 5 cents to $1-2, employers across the country are preparing to rearrange their labor budgets3. While the push for a significant increase in the federal minimum wage rate continues, store owners should stay up-to-date on the wage requirements for their business.
Credit Card Surcharges
All businesses face challenges when it comes to the prices to process credit and debit cards, fees that total more than $50 billion a year4. When it comes to small business owners with high transaction counts and low basket size, these fees can become a major issue. To mitigate costs, some c-store and gas station owners charge higher prices for items purchased with credit cards. Now, some lawmakers are working to pass legislation that would make it illegal for retailers to name these extra charges “surcharges” when talking to customers. To combat such laws that have passed, some convenience store owners have resorted to offering “cash discounts” instead. Now retailers are fighting to protect their rights to free speech and to tell customers just what they’re paying for. With the NRF on the side of the retailers, the court cases are sure to continue around the country.
Tobacco regulation is continuing to evolve all around the country, always changing the way that tobacco is bought, sold, and distributed. More recently, the legal purchasing age in several cities and states has risen from 18 to 215. With the new changes to the age limit, consequences for breaking the selling law have changed as well. Retailers who sell tobacco products to underage people can be stuck with fines up to $1,0005.
The EPA’s regulations for mandated volumes of biofuels under the Renewable Fuel Standard (RFS) and the sale of RINs between retailers has made it harder for the smaller gas retailers to compete. Because awarded RINs for blending renewable fuels can be sold and profited from, the larger fuel chains are currently able to make a larger profit while also more easily meeting their RFS requirements. Now, retailers are reaching out to EPA to request a change. Smaller gas retailers are requesting that the EPA change RIN transfer points from the refinery to the rack, to prevent the imbalance in the market6.
After advocates for c-store and small grocery store owners presented their concerns to the House of Representatives about the USDA’s proposed changes to the eligibility requirements for SNAP retailers, a final decision was made to revise the rule7. In the final rule, the USDA removed several of the changes that would have made being a SNAP retailer very difficult for c-store owners. Now multiple ingredient items and healthy grab-and-go snacks all qualify as eligible SNAP items. The provisions also changed the stocking requirement from six of every SNAP item, to three.