The Expert Podcast

…For business planning over the next few years any privately held company. Especially a small to medium company should start allocating two or 3% of their revenue towards additional and new. Unfunded mandates from the government. And this is not necessarily a criticism of the government or an indictment of policy. It's just a reality of a business If you have your own opinion and whether this is fair or not fair it doesn't matter. This is just a logical rational. Suggestion to companies to start setting aside some money from your revenue. To pay for things that the government is going to require businesses to do. And we're going to take a look at three examples One has to do with payment processing. One has to do with, retirement accounts for employees. And one has to do with, the social, problems that certain cities are having that affect businesses. So the first one is payment processing…Something. that's happening behind the scenes is the federal trade commission and the CFPB consumer finance protection bureau. Is starting to put out some directives and regulations for payment processors basically banks that take credit card payments for merchants So if you have a merchant account and you take payments from customers, this is what affects you. And presumably under the guise of pres preventing fraud and people falling…victim to scams, they're requiring banks to keep an eye out for what's called dark patterns. And these dark patterns. Are. Things that companies use. To scam customers out of money However, The dark patterns have been expanded. Two things that are just normal everyday marketing, every day sales techniques, and more importantly, the government is requiring businesses. To steer clear. Of marketing in a way where if somebody is less sophisticated, They might not. act in the same way that a more intelligent person would what do we mean by that? Well one of the things they talk about is the dark patterns are tactics that induce customers to complete an action. They would not have otherwise completed if they had understood what they're acting on. Okay. Now…in the description they say manipulative tactics but what is a tactic that induced customers to complete an action like buy something that they would not have otherwise completed if they understood what they are acting on. So basically if somebody doesn't understand and they're too stupid. And they buy something because they were stupid. It's on you as a company…And if they later say I didn't get it I didn't understand I made a mistake It's on you as a company. And if you get too many of those. You could lose your merchant account. Or you could be prosecuted…So you might have to change. business model. To account for less sophisticated customers. Are we exaggerating Well…Here's the thing. These actions may drive unwitting customers to purchase unwitting What is unwitting me? Basically mean stupid. Right. So if stupid people buy your products, You could get in trouble. And I'd say stupid I'm not trying to be condescending or talk down I'm just saying less sophisticated people who don't take the time to read through everything or to understand everything it's on you to make sure as a business that you're doing that. And here's where it gets tricky. Dark pattern allegations included. A system design on websites. That prey on the human cognitive processing frailties. Now the keyword there is pray…But what is the difference between preying on somebody and just letting them voluntarily do something you not holding a gun to their head, but if somebody has a cognitive processing frail, meaning that they don't have the ability to understand something that's sophisticated or they don't have the ability to, to research your product and they buy it. If the government says that your system is designed. To get that sale…It's on you. If they didn't take the time to compare products maybe there's a better product out there. Maybe there's another product at a better price. But if you had your website, Designed in a way to make the sale and they couldn't do research. Maybe they're going to say you tricked or trap them. Look, if you're a scam company and you're doing. Fraudulent business practices You deserve any regulation you get, but we're not talking about that We're talking about companies that try to do things that are legitimate and they're salesy, they're marketing. They're trying to promote your product You're boosting up your product. If you. Your product has pros and cons If you talk about the pros but not the cons is that. A design that prays on cognitive. processing frailties. What does cognitive processing frailty mean? That basically means somebody less sophisticated less intelligent…They're putting the burden on you as a business to account for that reality in the consumer. Marketplace. So that's an expense you're going to have either You're going to have to over describe your product and sell less or do more to deal with the customers Okay Let's look at another expense in Oregon. There's a new retirement law. That says…that…You have to provide. A retirement account for your. Employees now you don't have to pay for it. You don't have to put money into it. But you have to create a system where automatically. 5% of each employee's paycheck goes into a fund. And that's when it costs money to process you're gonna have to set up an account There's many companies that do this. It could be 50 $60 a month per employee. To set up this account. And you're gonna have to monitor it And you're also on the hook for whether or not it's done properly. There's fines involved…In addition. If something goes wrong with that account you could be on the hook for it, but who does make money off it Well, The plan holder is charged 1% by the plant Oregon saves So the government's going to hit it up for 1%. Allegedly. Is the Oregon saves legality mandatory. Yes. Legally mandatory for employers based on the registration deadlines No matter whether they employ one or hundreds all Oregon businesses will need to do something. enroll employees or file an exemption. Again if you do it the wrong way, you're liable to a fine of 100 perfect And employee up to $5,000 per year…And there's certain deadlines. employers with five or fewer employees have to have this done by March of next year…So it's going to be an expense. Right. Is a huge no you don't have to actually put the money in but you have to set up this…Planned for employees. Not saying this is reasonable or not. I'm just saying that. You have to plan for this. What about the last one? Shopping cart jail stores face fines to reclaim abandoned carts Even if they were stolen This was in Washington state shopping cart jail. it's a fence dirt lot near Seattle…The many many carts there target raw Safeway Marshall's TJ max every major retailer has shopping carts They're there waiting to be bailed out by the stores, the city charges $25 each If the stores pick them up for from the jail. Or you can pay them $62 and they'll deliver them to you. If the stores don't reclaim them after 14 days they will be destroyed. And. the city will bill the store another $25 for destroying them. The intent was to reduce the amount of carts. So if somebody steals a shopping cart from your store…You have to pay to get it back to the state. Or they're going to destroy them and still charge you. And this has a bunch of effects obviously the financial effect of having to pay those fines If a lot of cars don't even make it there they just end up in a. You know in a, in a river somewhere and that costs four or 500 for replacement car stores can't afford to ignore the issue of it being the carts Cause some customers having…Difficulty finding cars So you're going to lose sales If a customer walks into your store. And…where the Kartra supposed to be It's empty They might turn around and leave because they can't carry all their groceries in their hands, around the store. These are three examples of where businesses have to shoulder the burden. Of government mandates And again whether this is right or wrong that's not our opinion. The point is if you're a business to start factoring in this as an additional expense on your P and L. That the social costs are now going to be part of your, business expense structure. And more will probably be coming down the pipeline. You're not…sure what they're going to be Your area might be different than others, but just be prepared for this and let us know which ones you're already dealing with. And how that's affecting your business operations.