Target ups minimum wage—with even bigger hike planned by 2020
Target Corp. is raising the stakes in the battle for retail store talent — and giving its employees a holiday surprise in the process.
The discounter on Monday announced plans to raise its minimum hourly wage for all associates to $11 in October. It also pledged to increase the rate to $15 by the end of 2020. The retailer said the move will help it better recruit and retain top-quality staff and provide a better shopping experience for customers.
The pay increase will go to thousands of Target employees across the country before the holiday season. The increase will also apply to the more than 100,000 hourly team members that Target is hiring for the holiday season. The move to a minimum hourly wage of $15 will be implemented between now and the end of 2020, the company said.
Target's new pay increases put it ahead of rival Walmart in minimum wage increases. Walmart had raised its entry-level hourly pay for workers to $9 in 2015 and then to $10 in 2016.
“We care about and value the more than 323,000 individuals who come together every day with an absolute commitment to serving our guest,” said Brian Cornell, CEO and chairman of Target. “Target has always offered market competitive wages to our team members. With this latest commitment, we’ll be providing even more meaningful pay, as well as the tools, training and support our team needs to build their skills, develop professionally and offer the service and expertise that set Target apart.”
Target noted that it currently pays market competitive rates above the federal minimum wage at all stores nationwide. The chain's last major wage increase was in 2016, when the company moved to a $10 minimum hourly wage, which is higher than the minimum wage in 48 states, and matches the minimum wage in Massachusetts and Washington.
Also on Monday, Target reiterated its most recent sales and EPS guidance for third quarter and full year 2017, signaling that its increased salary expenses are not expected to impact the company's bottom line.
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Study: Fraud losses, management eat up more than one-fifth of retailer revenue
Merchants’ fraud costs are a growing expense — and the pace shows no sign of slowing.
Fraud losses and management eat 8% of the average e-commerce retailer’s revenue, up from 7.6% in 2016, according to “2017 Financial Impact of Fraud Study: Exploring the Financial Impact of Fraud in a Digital World.” The report is from Vesta Corp. and Javelin Strategy & Research.
Merchants who sell only digital goods, like eBooks, eTickets and other instant download items have been the hardest hit. Fraud operations account for 9.7% of revenue, and their fraud spend increased by 42% year over year.
Compared to 2016, chargeback losses — which occur when merchants end up footing the bill for legitimate consumer or fraudster purchases — increased by 60% among digital goods merchants. This jumps to 75% among those merchants selling strictly physical goods.
Meanwhile, false positives — which occur when merchants mistakenly decline legitimate transactions — grew by 25% among digital goods merchants, and 27% among physical goods merchants.
The average e-commerce merchant now devotes 21% of its operational costs to fraud management, up from 18% in 2016. Overall, the average retailer’s fraud management spend increased 17% in 2017.
"Merchants' fraud costs continue to rise year over year," said Javelin Research director Al Pascual. "While some merchants have experimented with new fraud fighting tools and tactics, on the whole, they haven't been able to keep pace with dynamic fraudulent threats.”
Looking ahead to the next 12 months, e-commerce retailers plan to utilize at least 14 different payment security techniques and solutions to combat fraudulent purchase attempts.
"The writing is on the wall," explained Vesta chief marketing officer Tom Byrnes. "If merchants don't modernize their fraud protocols, they won't be focused on growth or innovation; they'll be struggling to stay in business."
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