Current Events in November 2016

The two largest daily fantasy sports (DFS) enterprises, DraftKings and FanDuel, have agreed to merge. The transaction is expected to close next year, the companies said in a release.

The merger was not unexpected. Both companies have spent the last 18 months in the crosshairs of various state attorneys general, most notably Eric Schneiderman of New York, who sued the companies for violating the state's gambling laws.

The companies said the merger will enable them to better serve customers, who pay money to enter a team of actual sports players, winning points based on how those players perform in actual games. Winners can receive large cash prizes.

But the merger undoubtedly will help both enterprises control costs, which rose when they were forced to mount legal defenses in a number of states and later on to lobby various state legislatures for legal exemptions from gambling laws.

The companies from the beginning maintained they were exempt from gambling laws because their games were classified as games of skill, not chance. Many states took issue with that interpretation.

“We have always been passionate about providing the best possible experience for our customers and this merger will help advance our goal of building a transformational global sports entertainment platform,” said DraftKings CEO Jason Robins. “Joining forces will allow us to truly realize the potential of our vision, and as a combined company we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately.”

It goes without saying that a home is safer when it’s occupied. Homes that are humming with activity are much less likely to be broken into. Having bodies in the house can also be beneficial in the event that a plumbing problem or other home maintenance issue should arise.

"When homeowners are away, the home is susceptible to damage from water leaks, attempted burglaries and even fire," Williams said. "Fortunately, there are a few easy things that a homeowner can do to protect their homes while they're away."

Preparation tips

The experts at 128 Plumbing, Heating, Cooling, and Electric recommend taking care of these tasks before embarking on holiday travel:

• Turn off the main water valve. No one wants to return home to a severely water damaged house. Reduce the odds of a water pipe bursting and causing damage by turning off the main valve that leads into your house.
• Put your water heater on vacation mode. Williams and his colleagues note that the pilot light will remain on, but you’ll save money on unnecessary heating. If you have an electric water heater, turn the temperature dial down or turn it off at the circuit breaker panel.
• Adjust the thermostat. Setting your thermostat to 55 degrees can save you money and help eliminate the risk of your pipes freezing while you’re out of town.
• Don’t leave lights on around the clock. When lights are left on day and night, it’s a dead giveaway that nobody is home. To ward off intruders, use a timer for lights instead.
• Notify your security company. Let your home security system monitoring company know that you’ll be gone. For added security, consider installing an outside motion sensor.
• Don’t overshare on social media. Don't share your date of departure on social media. By doing so, you could be sending an open invitation to intruders.

At the end of October, Tesla CEO Elon Musk announced that the automaker would begin manufacturing solar roof tiles that it would be tying into its household and commercial battery systems. The entrepreneur stated that he hoped to do for solar power what he did for electric vehicles – essentially turning a little-wanted product into something that’s appealing for consumers.

The plan was for those solar roof tiles to be produced by SolarCity, a company that Musk is the chairman of, and sold by a subsidiary called Tesla Energy. However, things may have gotten a little easier on Thursday when shareholders gave the thumbs up for Tesla to acquire SolarCity outright for $2.1 billion.

According to Business Insider, the deal was “overwhelmingly” approved by 85% of unaffiliated shareholders. This comes as a little bit of a shock, since initial reactions to the acquisition were not positive; SolarCity had been struggling, and when Musk announced plans for deal in June, Tesla’s share price dropped by 13%. However, after the deal was approved, the gratified CEO said that investors wouldn’t regret their decision.

“Your faith will be rewarded,” he said to shareholders in a Fremont, California meeting.

Over $1 billion in revenue

Although Musk recused himself from voting on the issue due to his connection with SolarCity, he campaigned hard for its approval during the deliberation period. He repeatedly told shareholders that the acquisition would quickly make a profit, estimating that Tesla would add $1 billion to its revenue by 2017 and generate another $500 million over the next three years after it starts selling more solar panels for cash rather than leasing them to homeowners.

The terms of the buyout will give SolarCity shareholders 0.110 Tesla shares for each share they have in the former company. It’s a bit of a saving grace, since the company’s model relied heavily on borrowing money to finance expansion; the company had nearly $260 million in cash and cash equivalents but almost $6.7 billion in total liabilities, including debt.

However, the company has expanded in recent years and expects a moderate year-over-year increase. Its new solar shingles, made from glass tiles, are meant to have 50-year lifespan and several other advantages over standard roof tiles.

“The goal is to have solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation and actually have an install cost that is less than a normal roof plus the cost of electricity,” said Musk of the products.

Tough times ahead?

Although Musk is optimistic about the deal’s future, experts say that Tesla may be in for a bit of a rough patch going forward. A federal investigation over the death of Tesla driver in connection to the Autopilot feature still looms over the company’s head, and shares at the company are down by around 20% for 2016.

To make matters worse, Donald Trump’s presidential election victory could have serious implications. Myron Ebell, a Trump adviser on environmental matters, has said that electric vehicles may no longer get the generous tax subsidies they’ve enjoyed in recent years. For one of the premier companies producing electric vehicles, this is sure to be a hard blow.

Health officials have always been worried about teen smoking. Getting hooked on nicotine early in life makes it harder to quit later on and can lead to health problems down the road.

When e-cigarettes were introduced to the marketplace, they drew the same kind of concern, as statistics showed teens were among the early adopters. While there is no tobacco in an e-cigarette, there is nicotine, and health activists worried that teens who used the devices would gravitate to cigarettes later on.

The National Institute on Drug Abuse recently reported that teens are more likely to use e-cigarettes than smoke tobacco. By eighth grade, it says only 3.6% had started smoking but 9.5% were using e-cigarettes. By 12th grade, it found more than 16% were using e-cigarettes.

But being a gateway to tobacco is not the only concern about these nicotine delivery systems. New research suggests even those who don't later start lighting up can be damaging their health by inhaling the nicotine-laden vapor.

Persistent cough and bronchitis

Researchers at the University of Southern California (USC) say they have found an association between e-cigarettes and development of a persistent cough, bronchitis, and congestion or phlegm in the young people who use them.

“E-cigarettes are known to deliver chemicals toxic to the lungs, including oxidant metals, glycerol vapor, diketone flavoring compounds and nicotine,” said lead author Dr. Rob McConnell. “However, there has been little study of the chronic health effects of e-cigarettes.”

The study compared kids who had used e-cigarettes to those who had never tried “vaping.” It found that young people who had used e-cigarettes in the past were 85% more likely to exhibit respiratory symptoms. Current users were twice as likely.

“The Food and Drug Administration recently banned the sale of e-cigarettes to children under 18 years of age, and California just prohibited sale to young adults under 21,” McConnell said. “Our results suggest that these regulations and an environment that discourages the initiation of any tobacco product may reduce the burden of chronic respiratory symptoms in youth.

But because e-cigarettes are relatively new, McConnell said he believes they need additional study so doctors can better understand their long-term effects.

McDonald's executives have outlined sweeping changes planned for the fast food franchise, designed to reduce staffing needs while streamlining and modernizing the operation.

At press briefings in New York and Los Angeles, McDonald's said it is adding ordering kiosks to restaurants, installing “smart” menu boards, implementing mobile payments capabilities to its app, and will begin offering custom sandwiches and table service.

The moves are designed to update McDonald's business model, along the lines of Panera Bread and Chick-Fil-A, both of which now bring food to customers' tables after they order.

Reuters reports that about 500 of McDonald's 14,000 restaurants in the U.S. have already made some of the changes – notably stores in New York, Florida, and California. The company stopped short of giving a time frame for the changes to be implemented, but said outlets in Chicago, Boston, Seattle, and San Francisco are next on the list.

Mobile roll-out in 2017

Mobile ordering will be a pilot project in the first half of next year in select markets, with a full national roll-out anticipated in the second half of 2017.

The ordering kiosks, which are estimated to cost franchisees as much as $60,000, will likely reduce the number of employees a McDonald's restaurant will need to operate. The company has borne the brunt of labor pressure to increase the hourly wage of fast-food workers.

As we reported earlier this year, McDonald's franchises have been experimenting with changes that the company may or may not have been considering for incorporation into its system. A Missouri franchise owner built a 6,500 square foot store and outfitted it with upholstered furniture. Interestingly, he also experimented with all-you-can-eat French fries. At the time, it suggested the 61-year old company is open to new ideas.

Not a new idea

As for ordering kiosks, this is hardly a new idea for the golden arches. In early 2015, McDonald's told financial analysts that ordering kiosks were on the way. Other quick serve restaurants have successfully used these kiosks, and McDonald's may be looking at them as a way to deal with the pressure to increase employee wages.

Part of the pressure to raise wages likely stems from recent structural changes in the economy. Many fast food restaurants created jobs designed to be filled by teenagers living at home.

But because so many jobs have recently disappeared from the economy, that's not always who's standing behind the counter these days.

With Black Friday just a week away, retailers are beginning to add to the build-up. After rolling out a number of pre-Black Friday deals, Amazon is introducing bargains that are only available if you order on it's voice interactive technology, Alexa.

Today through Monday, consumers who ask “Alexa, what are your deals?” will get access to an exclusive set of discounts on popular gift items. Consumers may order with voice commands on Amazon Echo, Echo Dot, Amazon Tap, Amazon Fire HD tablet, or Amazon Fire TV.

“This is the first holiday that Prime members will be able to use their voice to shop and we’re excited to offer exclusive deals they won’t find anywhere else,” said Assaf Ronen, Amazon's vice-president for Voice Shopping. “Voice shopping with Alexa takes the hassle out of the holidays, giving customers the ability to order from millions of items simply by saying the word.”

New deals each day

Ronen says the voice-only deals will be updated each day during the promotion.

Amazon says the Alexa-only deals will include $80 off a 32-inch Samsung 1080p LED TV; $30 off on a Sphero Star Wars BB-8 App controlled robot; $80 off on Beyerdynamic Limited Edition headphones; and $130 off on a 10-piece All-Clad stainless steel cookware set.

Similar to Apple's Siri, Alexa is the voice service that powers Echo, providing capabilities that allow users to interact with devices in a more intuitive way using voice commands.

While consumers no doubt will take part in Black Friday sales in great numbers this year, the numbers may continue to diminish as more sales move online and retailers spread their bargains over a wider timeframe.

Black Friday shopping tips

Whenever consumers do their shopping, Ash Exantus, Financial Empowerment Coach at BankMobile, suggests shoppers make a list and holiday budget to avoid overspending. He also suggests leaving your plastic at home and using cash instead. He says that will ensure you stick to your budget and avoid getting caught up in Black Friday's emotional appeal.

“Shopping, especially on Black Friday, is psychological warfare,” Exantus said in an email to ConsumerAffairs. “You are literally in a battle between you and your pockets vs. retailers and marketers.”

It's called Black Friday for a reason, Exantus says. It's the day when retailers get into the black for the year, often at consumers' expense.

With Black Friday just a week away, you might think it's too late to look for a seasonal job. However, Challenger, Gray & Christmas (CG&C;) says you'd be wrong.

While it's true that most retailers have completed their hiring of temporary workers, you shouldn't throw in the towel, just yet.

“It is never too late to find holiday jobs,” said CG&G; chief executive officer John A. Challenger. “There is a lot of churn in the sectors that typically hire seasonal workers and because employers are often hiring a lot workers in a short amount of time, there is a strong chance that many of those new workers will not pan out.”

The hiring continues

In its September forecast, the global outplacement firm predicted holiday hiring will remain flat from a year ago. Should that be on the money, about 740,000 seasonal workers will be added to retail payrolls in the final three months of the year.

The bulk of this hiring typically occurs in late October and early November, and is usually reflected in the government's December employment report.

“That being said, we continue to see hiring in late November and into early December,” said Challenger. “On average, retail employment has grown by an average of 145,000 over the last five years. It is important to remember that these figures don’t include seasonal job gains outside of the retail sector. Job seekers can also be looking for holiday jobs in hotels, restaurants, catering companies, and warehouse and shipping facilities.”

The primary reason to not give up on the holiday job search is that the sectors that have the strongest need for seasonal workers are also those that typically see the highest turnover.

A 2014 report from the Hay Group, a management consulting firm, indicated that the turnover rate in the retail industry averaged 66% for part-time hourly sales associates.

Last year in the hospitality industry -- another major employer of seasonal workers -- the turnover rate averaged 72%, according to the Bureau of Labor Statistics.

“These high turnover rates, which are likely to be even higher among seasonal workers, mean that job seekers pursuing holiday employment should not hesitate to return to employers where they previously failed to get a job offer. The situation can change overnight,” said Challenger.

What to do

Challenger offers the following tips for holiday job-seekers:

• Visit employers in person. It is tempting to conduct a job search from behind the computer screen. However, many retailers will not post their seasonal jobs online -- particularly smaller mom and pop stores.
• Return to previous attempts. Don’t hesitate to go back to employers where you might have failed to get a job. Staffing needs may have changed or they may have lost one or more seasonal workers.
• Think outside the (big) box. Retailers undoubtedly have the strongest need for seasonal workers, but don’t overlook entertainment venues, restaurants, caterers, and other businesses that are busy during the holidays. And, since more shoppers buy online, shipping companies like UPS and FedEx have enormous demand for seasonal workers.
• Be flexible. The most challenging jobs to fill are those with overnight or early morning positions dedicated to receiving new shipments and restocking floors. If you're willing to work any hours thrown your way you'll have a leg up on the competition.
• Start with places you shop/visit. If you're a frequent customer at a particular store or restaurant, start your job search there. Even if you don't have a “relationship” with the manager or staff, they are likely to recognize you as a regular, which may give you an advantage.

Skidders Footwear of New York is recalling about 5,500 pairs of children’s shoes.

The rivets on the shoes have sharp edges, posing a laceration hazard.

The firm has received three reports of the rivets scratching the feet of the wearer. No injuries have been reported.

This recall involves Skidders Footwear children’s canvas tennis shoes sold in three sizes: 12M, 18M and 24M.

The shoes have white rubber bottoms and come in three different colors: navy blue fabric with orange rivets and laces, gray fabric with green rivets and laces, and denim colored fabric with pink rivets and laces.

The shoes, manufactured in China, were sold exclusively at Meijer stores located in Michigan, Indiana, Illinois, Ohio, Kentucky and Wisconsin from August 2016, through October 2016, for about $10.

What to do

Consumers should immediately take the recalled shoes away from children and contact Skidders Footwear to receive a full refund.

Consumers may contact Skidders at 866-636-1221, Monday-Friday 9:00 AM – 5:00 PM (EST), by email at sales@skidders.com or online at http://skidders.com/ and click on “recall notice at the bottom of the page.

Earlier this month, nearly 100 people gathered in Texas’ state capital to demand that a billionaire oil pipeline operator resign from his post on the Texas Parks & Wildlife Commission.

Kelcy Warren is the chairman and CEO of Energy Transfer Partners, the company behind the controversial Dakota Access Pipeline as well as other major oil and gas pipeline projects. Governor Greg Abbott appointed Warren to the parks and wildlife commission last year, leading some to argue that he presented a major conflict of interest.

At the wildlife board’s November 3 meeting, for instance, the commission was scheduled to vote on—what else?—an easement for a pipeline in a state park. “I do not believe you can honestly make objective decisions on behalf of the parks you’re appointed to protect,” one protester reportedly told Warren at the meeting.

Warren later recused himself from the vote and the issue was tabled. But his influence and the influence of his Energy Transfer Partners can be plainly seen across Texas.

University system invests

Much like the state government, the state’s public university system has formed a predictably close relationship with oil and gas interests. A program called University Lands manages the surface and mineral rights of over 2.1 million acres of land in Texas and then sends the money from oil and gas leases back into the University of Texas campuses.

In 1996, the university formed a unique partnership with what it describes as "the first investment corporation formed by a public university system.” The arrangement “is the largest public one of its kind in the nation,” holding over $20 billion in assets, according to NASDAQ’s 2014 report.

Called the University of Texas Investment Management Company, or UTIMCO, the university’s investment arm has purchased shares in numerous Texas-born corporations like Texas Instruments and Whole Foods, as well as the fossil fuel industry, according to SEC records. 

Listed in UTIMCO’s 2014 filings are 180,099 shares in Energy Transfer Partners. The same form also shows that UTIMCO purchased shares in several of Energy Transfer Partners' subsidiary companies: there are 147,928 shares in Sunoco Logistics and 257,643 shares in Regency Energy Partners, both companies owned by Energy Transfer Partners.

“Unfortunately we have no information to provide as UTIMCO does not comment on the underlying holdings of our investment partners,” University of Texas spokesman Melanie Thompson tells ConsumerAffairs.

Philanthropy

CEO Warren’s net worth is estimated at $3.8 billion, and public institutions enjoy the fruits of his philanthropy. Warren’s donations include an endowment at his alma matter, the University of Texas campus in Arlington. He also sunk a reported $10 million into a new, popular urban park in Dallas that is built on top of a freeway, part of a private-public partnership with the city.

A self-described folk music fan, Warren is the founder of the Cherokee Crossroads music festival, which raises money for children’s charities. For his donations, the Horatio Algier Association presented him a philanthropy award late last year.

Not mentioned in the accompanying press release for his award: Warren has also donated $700,000 to the campaign of Texas Governor Abbott, who then appointed Warren to the Texas Parks and Wildlife Commission after his election.

Concerns at Standing Rock

Warren’s philanthropic image is at odds with reports currently coming from North Dakota. The Dakota Access Pipeline, slated to carry crude oil from the Dakotas to Illinois, has mostly enjoyed federal support but has been meet with intense resistance from locals along the route.

The pipeline was originally slated to go through Bismarck, the North Dakota state capital, but after the city rejected that plan, the pipeline was instead rerouted to pass through the Standing Rock Sioux Tribe reservation, leading some environmentalists to describe the move as “environmental racism.”

Since then, the Standing Rock Sioux and others protesting at the site have been arrested, and according to some accounts, abused and attacked by the local police department while peacefully protesting. One widely-shared video shows a journalist being shot in the back by a rubber bullet, though the police department denied that the encounter took place. 

Early reports from the scene claimed that the company’s own private security workers even let violent dogs loose on the protesters. "We reiterate our commitment to protect cultural resources, the environment and public safety," Energy Transfer Partners' spokeswoman told reporters last month. 

In the longer-term, of particular concern to the Standing Rock Sioux is that the pipeline is being bored underneath Lake Oahe, a source of drinking water. According to a recent report in Reuters, Energy Transfer Partners’ subsidiary Sunoco Logistics has experienced over 200 oil leaks in its pipelines over the last six years, giving the company a worse record of transferring crude than any of its competitors.

An Energy Transfer Partners spokeswoman has not yet returned an interview request, but Warren went on PBS Newshour yesterday to defend his project. “I disagree with that statistic about Sunoco Logistics,” he said on the station. “But everybody should be concerned about that. But keep in mind there’s a difference here. This is a body of water. This is a pipe that’s been designed specifically to fit into a bore underneath the riverbed. This is very thick wall pipe. It’s brand-new steel... And I just think the likelihood of a spill into Lake Oahe is just extremely remote.”

On Monday, the tribe won a minor victory, when the Army Corps of Engineers agreed to seek further public input before letting Energy Transfer Partners continue installing the pipeline. Warren told the Wall Street Journal that he is confident that any delays will go away once President-elect Donald Trump takes office. Trump has reportedly invested at least $500,000 in Energy Transfer Partners.

Homeopathy is sort of like religion. Lots of people believe in it even though there is no scientific evidence to support it. That's not necessarily bad in the case of religion, which provides spiritual comfort and moral guidance to millions, but when it comes to treating illness, choosing the wrong treatment can be harmful.

That's why the Federal Trade Commission has decided to start treating marketing claims about homepathic products the same way it treats other products making similar claims -- like drugs, in other words.

This is not good news for the homeopathic business, which dates back to the 1700s and is more similar to astrology or witchcraft than to modern medicine. Or as an Australian medical organization put it in a massive study last year: " The review found no good quality, well-designed studies with enough participants to support the idea that homeopathy works better than a placebo, or causes health improvements equal to those of another treatment."

Watered down

Homeopathy basically believes that using a tiny bit of a substance that in larger quantities produces illness can cure or prevent that illness. This is an idea that is, at best, odd, as the National Institutes of Health (NIH) explained in a background paper on homeopathy which diplomatically said that “it is not possible to explain in scientific terms how a remedy containing little or no active ingredient can have any effect."

Homeopaths believe that diluting substances in water actually makes those substances more potent, and that water can “remember” and maintain the qualities of substances once diluted in it.

Of course, anyone can believe anything they wish, but when they begin advertising and hawking supposed cures that could entice consumers to ignore scientifically proven treatments, it becomes a matter for agencies like the FTC, which has spent years taking public testimony and pondering what to do about homeopathic claims.

Same standard

In a new policy statement issued this week, the agency explains that it will hold efficacy and safety claims for over-the-counter homeopathic drugs to the same standard as other products making similar claims.

This means simply that companies must have competent and reliable scientific evidence for health-related claims, including claims that a product can treat specific conditions. 

The statement leaves little doubt that traditional beliefs in the potency of homeopathic medicines won't carry much weight. In most cases, the statement says, “the case for efficacy is based solely on traditional homeopathic theories and there are no valid studies using current scientific methods showing the product’s efficacy.” As such, the marketing claims for these products are likely misleading, in violation of the FTC Act.

Clear disclosures

The statement provides a little slack for homeopathic marketers, saying that "additional explanatory information" may balance claims that can't be supported by science. 

Thus, a company may get under the wire if it includes clear statements that  1) there is no scientific evidence that the product works; and 2) the product’s claims are based only on theories of homeopathy from the 1700s that are not accepted by most modern medical experts.

The policy statement notes that any such disclosures should stand out and be in close proximity to the product’s efficacy message and might need to be incorporated into that message. It also warns marketers not to undercut a disclosure with additional positive statements or consumer endorsements reinforcing a product’s efficacy.

The statement warns that the FTC will carefully scrutinize the net impression of OTC homeopathic marketing claims and that if an ad conveys more substantiation than a marketer has, it will violate the FTC Act.  

Pets aren’t finding themselves at the veterinarian’s office as much these days. There’s been a drop in vet visits over the past few years, which the American Veterinary Medical Association chalks up to high pet care costs, inconvenience, and a lack of knowledge around when to bring pets in for a checkup.

Now, a new app called Fuzzy could provide those tools and make it easier for pet parents to stay on top of their pet’s health care needs. The goal of the subscription-based pet-health app, says its CEO and co-founder Zubin Bhettay, is to “make pet-health accessible to all pet parents.” How does it plan to do so? By making house calls.

In-home wellness visits

The mobile app also helps users keep track of their pet’s medical history. Consumers can view their pet’s health records and receive electronic reminders to help ensure that they never miss a teeth cleaning or month of heartworm medication.

Fuzzy’s services are currently available to pet parents in the San Francisco Bay Area, but the company says other markets will be added in 2017. The app is available for download on iTunes and Google Play.

In your father's or grandfather's generation, consumers prided themselves on being able to perform simple – and not so simple – maintenance on their cars.

But in the last couple of decades, cars have become more complex machines, with mechanical parts replaced with printed circuit boards. As a result, consumers have become much more reliant on trained auto service technicians.

CheapCarInsurance.net recently set out to measure just how much consumers know about their cars and what they can and can't do to keep their vehicles running. In a survey of 2,000 consumers, the researchers asked basic questions, such as “do you know how to check the oil” and “can you change a tire?”

Geographic disparity

The survey found a significant geographic disparity in automotive IQ. Two regions of the country – the East South Central and West South Central – basically the south – scored above 80% on the automotive quiz.

States in the Mid Atlantic region – New Jersey, New York, and Pennsylvania – came in last, barely scoring over 75%.

In terms of age breakdown, the older you are, the more you are likely to know about basic car maintenance.

“While hopping online to find a 'how to change my oil' video that might make sense, maybe a parent or grandparent should be your first resource instead,” the authors write. “Male baby boomers, born between 1946 and 1964, scored the highest in our assessment of auto know-how at just more than 9%. They displayed the ability to discern between a spark plug and an alternator without much issue.”

Not that confident

When it comes to basic maintenance, only 42% of consumers said they were “very confident” in their ability to change a flat tire. An even smaller percentage, 26%, said they are very confident they could change the oil.

That may be why Roadside Assistance has become a big part of auto insurance coverage, and why there seems to be a quick-service oil change store on nearly every corner. That said, it's still probably a good idea to get familiar with basic maintenance steps for your car.

Cars.com suggests closely monitoring the air pressure in the tires, making sure they are properly inflated. Under-inflated tires can cause excessive tread wear and reduce fuel economy.

The fluids in your car's engine may need to be changed on a regular basis, then again they might not. Since different cars have different requirements, find out when the brake fluid and coolant in your particular car should be replaced.

You'll find more maintenance tips here.

The nation's retailers appear to be renewing their feud with credit card companies over the fees they charge for processing credit and debit purchases.

Earlier this week, the National Retail Federation (NRF) filed a friend-of-the-court brief in support of the Justice Department motion that the full Second Circuit Court of Appeals hear its case against American Express. The government maintains American Express is still blocking retailers from suggesting customers use a different card, in violation of the law.

Now, the NRF has sent a letter to Visa, asking that it stop using new EMV terminals to steer debit card transactions to its own processing network, which NRF says is more expensive for retailers to use.

In a letter to Visa CEO Charles W. Scharf, NRF points out the Federal Reserve has said Visa's action run counter to the law.

More expensive choice

NRF complains that many credit/debit card readers installed since the card industry began implementing new EMV chip card technology present debit card users with a screen that asks them to choose between “Visa Debit” and “U.S. Debit.”

Though they don't know it, when consumers choose Visa Debit, their transaction is routed over Visa's more expensive network. Instead of a PIN, the consumer is usually required to use only a signature to approve the transaction.

On the other hand, when a consumer chooses the U.S. Debit option, NRF says the transaction goes over the retailer’s choice from about a dozen competing networks that charge merchants less but provide more protection by allowing the use of a secret, secure PIN.

“Visa charges more and offers less security while the competition charges less and does a better job of keeping consumers’ debit cards safe,” NRF Senior Vice President and General Counsel Mallory Duncan wrote.

Retailers say they should choose

Duncan says retailers should be allowed to choose the processor that provides the best value and offers their customers the best protection. He says that's what the law requires.

Why should consumers care? NRF says when costs rise for retailers, those costs get passed along to consumers in the form of higher prices.

NRF claims Visa is steering transactions toward the Visa network, and that the higher fees charged by Visa must be built into the cost of merchandise, ultimately contributing to higher prices paid by consumers.

The organization says the Fed ruled in early November that Visa's actions violate a 2010 debit card reform law that says retailers must be allowed to choose between at least two unaffiliated networks to process debit transactions.

The  Department of Labor (DOL) reports prices were up a seasonally adjusted 0.4% in October and have jumped 1.6% over the last 12 months.

As was the case in September, rising gasoline and housing costs were behind the increase in the CPI. The 7.0% surge in the cost of gas accounted for more than half of the increase. Housing prices rose 0.4% for a second straight month.

Energy prices post significant gain

The cost of energy, due largely to the aforementioned increase in gas prices, was up 3.5% last month -- the sharpest advance since February 2013. Fuel oil costs rose 5.9%, while electricity and natural gas prices rose 0.4% and 0.9%, respectively.

Over the last 12 months, energy prices are up just 0.1%, the first 12-month increase since August 2014.

Food prices hold steady

The cost of food was unchanged in October for the fourth straight month. The food away from home category (restaurant costs ) inched up 0.1%, while food at home (groceries) fell 0.2%, the sixth decline in as many months

The prices of nonalcoholic beverages fell 0.4%, meats, poultry, fish, and eggs were down 0.7% -- the 14th consecutive monthly decline, and miscellaneous grocery prices were off 0.1%. Costs for cereals and bakery products were unchanged, while fruit and vegetable prices inched up 0.2%, and dairy and related products increased 0.3 %.

Grocery prices over the last 12 months are down 2.3%, the largest 12-month decline since December 2009. The cost of eating out, on the other hand, is up 2.4% over the last 12 months.

Core inflation

The cost of all items, excluding the volatile food and energy categories -- the “core rate” of inflation -- rose 0.1% for the second straight month.

Along with housing, prices for apparel, new vehicles, and motor vehicle insurance rose in October, along with education, household furnishings and operations, alcoholic beverages, and tobacco. Personal care, communication, used cars and trucks, recreation, and airfare costs all declined. Medical care prices were unchanged.

The core rate of inflation rose 2.1% for the 12 months ending in October and has remained in the narrow range of 2.1% to 2.3% since December 2015.

The complete report may be found on the DOL website.

Jobless claims

Also from DOL, word that filings of first-time applications for state unemployment benefits plunged by 19,000 in the week ending November 12 to a seasonally adjusted total of 235,000.

That's the lowest level in 46 years. It also marks 89 consecutive weeks of initial claims below 300,000 -- the longest streak since 1970.

The four-week moving average, a more reliable gauge of the labor market because of its lack of volatility, came in at 253,500 -- a decline of 6,500 from the previous week.

The complete report is available on the DOL website.

Builder confidence in the market for newly-built, single-family homes remained at its second highest level of the year in November.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) held steady with a reading of 63, exactly where it was last month after a decline of two points from September.

“Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector,” said NAHB Chief Economist Robert Dietz. “This will help keep housing on a steady, upward glide path in the months ahead.”

Builder perceptions

The NAHB gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair," or "poor." The survey, which has been conducted for 30 years, also asks builders to rate traffic of prospective buyers as "high to very high," "average," or "low to very low."

Scores for each component are then used to calculate a seasonally adjusted index, where any number over 50 indicates that more builders view conditions as good than poor.

The HMI components measuring buyer traffic rose one point to 47, while the index gauging current sales conditions held steady at 69. However, the component charting sales expectations in the next six months fell two points to 69.

“With most of our members responding before the November elections, confidence levels remained unchanged as they awaited the results,” said NAHB Chairman Ed Brady. “Still, builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth.”

A look at at the three-month moving averages for regional HMI scores shows that the Northeast, Midwest, and West each posted two-point gains to 45, 58, and 77, respectively. The South was unchanged at 66. 

Child seat manufacturers have finally gotten the hang of it.

Out of 53 new models evaluated by the Insurance Institute for Highway Safety, (IIHS) 48 earn the top rating of BEST BET. That means they're likely to provide good belt fit for a 4 to 8 year-old in almost any car, minivan, or SUV.

By comparison, when the IIHS first started rating boosters in 2008, only a quarter of those evaluated earned the BEST BET designation.

Problems persist

However, several seats that don’t do their job and are rated Not Recommended can still be found on store shelves. Among them are two brand new models from Dorel Juvenile.

“Parents looking for a safe option for kids who have outgrown seats with built-in harnesses have more choices than ever,” said IIHS Senior Research Engineer Jessica Jermakian. “Unfortunately, we can’t declare total victory because manufacturers continue to sell subpar boosters.”

Of the 53 new seats, the Cosco Easy Elite and the Cosco Highback 2-in-1 DX -- both made by Dorel -- are rated Not Recommended. Three others, the Britax Parkway SGL in backless mode, the Lil Fan Club Seat 2-in-1 in highback mode, and the Peg Perego Viaggio Flex 120 are rated Check Fit, meaning they may work for some children in some vehicles. The remaining new seats are BEST BETs.

All told, there are 118 BEST BETs among currently available boosters, including old models. Additionally, there are nine GOOD BETs (seats that provide acceptable belt fit in most vehicles), 27 Check Fit, and five Not Recommended.

A range of prices

Top-rated boosters are available in all different price ranges. Of the boosters introduced this year, the most affordable is the Harmony Big Boost Deluxe, available at Walmart for less than $25.

The most expensive is the $330 Graco 4Ever All-in-1 with Safety Surround, a rear-facing infant seat that converts first to a forward-facing child restraint and then to a booster as the child grows.

Complete ratings may be found at www.iihs.org/.

4C Foods Corp. is recalling 4C Grated Cheese, Homestyle Grated Cheese and Cento Grated Cheese brands due to possible Salmonella contamination.

No illnesses have been reported.

The following products, packed in 6-oz. vacuum-sealed glass jars of either 6 or 12 jars per case with BEST BY dates between November 12, 2016, and November 12, 2018, are being recalled:

• 4C All Natural Parmesan Grated Cheese (UPC 41387-33126)
• 4C All Natural Parmesan/Romano Grated Cheese (UPC 41387-37126)
• 4C All Natural 100% Imported Italian Pecorino Romano Cheese (UPC 41387-77126)
• 4C HomeStyle All Natural Parmesan Grated Cheese (UPC 41387-32790)
• 4C HomeStyle All Natural Parmesan/Romano Grated Cheese (UPC 41387-11627)
• 4C HomeStyle All Natural 100% Imported Italian Pecorino Romano Cheese (UPC 41387-12302)
• Cento Parmesan Grated Cheese (UPC 70796-90502)
• Cento Romano Grated Cheese (UPC 70796-90501)

What to do

Customers who purchased the recalled products should return them to the place of purchase for a full refund.

Consumers with questions may contact 4C Foods at 866-969-1920 Monday- Friday, 9:30 AM – 4:30 PM (ET).