Stripe and swipe was a great technology in the 1980s, the decade the cassette tape Walkman and the Apple Macintosh computer came out.

But in a day when thieves half a world away can hack into a computer system to steal card data rather than breaking into a bank to steal cash, “stripe and swipe” is about as high-tech as an 8-track tape.

That’s why NRF and the retail industry have been pushing cards that encrypt data on an embedded micro-chip and protect consumers by using a secret Personal Identification Number (PIN) rather than relying on the illegible scrawl most people pass off as a signature. You wouldn’t want to rely on a signature to get cash out of an ATM, so why rely on a signature when you use a credit or debit card?

This week, NRF boiled down the advantages of new PIN and Chip technology over old-fashioned stripe-and-swipe with a new infographic.

The easy-to-understand infographic shows two scenarios:

• When a physical card is stolen, a thief can use a magnetic stripe card simply by signing the cardholder’s name, while they are blocked from using a PIN and Chip card because they don’t know the PIN.
• When card numbers are stolen, a thief can easily create a counterfeit magnetic stripe card and sign for the transaction, but a chip card is almost impossible to duplicate and the PIN would block its use even if it could be duplicated.

“PIN and Chip prevents credit card fraud … and protects you,” the infographic reads. “The safest cards deploy both PIN and Chip technology.”

The infographic and NRF’s Myths and Facts on card security were sent to Capitol Hill today. Both will be used as NRF continues to educate policymakers and the public on the retail industry’s efforts to protect consumers against criminals trying to steal their card data.

For more, go to www.nrf.com/datasecurity.

Myth: Retailers aren’t working to protect card data.

Fact: Maintaining the trust and respect of customers is retailers’ highest priority, and they have a vested interest in protecting consumers’ financial information – customers won’t shop in a store they don’t trust. Retailers have spent billions of dollars to protect card data using sophisticated computer systems with the latest in encryption, firewalls and other high-tech security measures. Retailers recognize that cyber theft can only be stopped with a united, multi-industry effort – banks, card networks and payment processors all have a role to play – and want to be part of that solution.

Retailers care about this issue because we are committed to combating this criminal threat to our customers and the industry.

Myth: Most cyber attacks and data thefts occur at retailers.

Fact: Data breaches at retailers account for 24 percent of incidents, while 37 percent happen at financial institutions, according to the most recent report from Verizon. And that’s true even though there are many more retailers than financial institutions. Other businesses ranging from manufacturing to transportation have also been hit. And government agencies as varied as the U.S. Army and the IRS see more than 60 data breaches per day.

Myth: Retailers don’t want to switch to PIN and Chip cards.

Fact: Retailers have been calling for PIN and Chip for years. Retailers want to move to move to modern cards that replace signatures with a secret personal identification number and which encrypt card data on an embedded computer micro-chip instead of storing it on a magnetic stripe. Cards like these are widely used in Europe and about 80 countries around the world, and a U.K. study found they have reduced fraud by 70 percent. A number of retailers have already installed the card readers and other equipment necessary for these new cards. But banks have been slow to issue them in the United States, instead proposing cards that would have a chip but still use a fraud-prone, easy-to-forge signature rather than a secure PIN to authenticate the transaction. That’s no match for 21^st Century criminals.

Myth: Retailers don’t want to pay for the costs of PIN and Chip.

Fact: Retailers are willing to pay a fair share of the cost of conversion. But they want a system that will actually reduce fraud and protect everyone – consumers, retailers and banks alike. They don’t want to spend billions of dollars on a chip and signature system like that proposed by the banks that only addresses part of the problem when better systems are available. And since credit cards are a product that belongs to the banks, banks should share in the cost of equipment and software needed to accommodate their product.

Myth: PIN and Chip is the only thing retailers are doing to improve security.

Fact: Retailers don’t see even the best forms of PIN and Chip as a complete solution. Retailers are taking a “defense in depth” approach and are exploring additional security layers such as point-to-point encryption of data along with emerging technology such as mobile payments made using smartphones. Retailers have also sought to reduce the amount of data that card companies require them to retain: NRF asked in 2007 that retailers be allowed to keep only an approval code for each transaction, with banks retaining all card data that could be used to commit fraud. The card industry has yet to make the change.

Myth: Retailers don’t notify customers fast enough when card information is stolen.

Fact: A total of 46 states and the District of Columbia legally require retailers to notify customers of data breaches. But retailers work closely with law enforcement when customer data is stolen, and authorities often ask that they temporarily delay disclosure in order to avoid tipping off criminals that the incident has been detected and is under investigation.

Myth: Visa and MasterCard’s “EMV” cards would make data secure.

Fact: EMV – short for “Europay, MasterCard and Visa” – is only one brand of card system that uses a chip. And while the version used in Europe provides both a PIN and chip, the version currently proposed for the United States would not require a PIN, still allowing an easy-to-forge signature to be used. Retailers believe a PIN is essential to protecting card data.

“Even in the midst of recovery, too many Americans are working more than ever just to get by, let alone get ahead, and too many still aren’t working at all,” Obama said as he addressed a joint session of the House and Senate at the U.S. Capitol. “What I offer tonight is a set of concrete, practical proposals to speed up growth, strengthen the middle class, and build new ladders of opportunity.”

With the politically divided House and Senate often deadlocked, Obama said he would act “wherever and whenever I can” to use the power of the White House to enact initiatives without waiting for Congress to pass legislation.

Obama made an increase in the $7.25-an-hour federal minimum wage one of his top priorities, saying he would sign an executive order raising the amount to $10.10 for workers covered by new government contracts, and that he would ask Congress to approve legislation that would do the same for all workers. He also called on cities and states to act on their own minimum wage increases.

“You don’t have to wait for Congress to act,” Obama said. “Americans will support you if you take this on.”

Citing retailer Costco with its starting wage of $11.50 and a Minneapolis pizzeria that pays $10, Obama even called on private employers to voluntarily raise wages.

Obama contended that a higher minimum would boost productivity, reduce turnover and give customers more money to spend, but NRF responded that it would harm attempts at job creation.

“If you want to create minimum opportunities, then raise the minimum wage,” NRF President and CEO Matthew Shay said. “Raising the minimum wage would place a new burden on employers at a time when national policy should be focused on removing barriers to job creation, not creating new regulations or mandates. It’s simple math – if the cost of hiring goes up, hiring goes down.”

Obama renewed his call for tax reform, saying he wants to end “wasteful, complicated loopholes” that benefit businesses that keep profits overseas and reduce rates “for businesses that create jobs here at home.” But he offered no details on other aspects of reform, and said he wants to spend some of the savings on transportation infrastructure. While NRF strongly supports infrastructure investment, NRF has long called for money from tax reform to be used to lower rates for businesses, both corporations and small companies alike, rather than diverted to other purposes.

Obama called for renewal of Trade Promotion Authority, which requires Congress to take an up-or-down vote on trade agreements without amendments, saying it would help with completion of the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership. NRF supports TPA and both trade agreements.

The president also called for action on patent reform legislation, saying it would allow businesses “to stay focused on innovation, not costly, needless litigation.” NRF helped get a reform measure passed in the House late last year, and is working with the Senate on a final version that could be sent to Obama as soon as the first quarter of this year.

With legislation passed in the Senate last summer and principles on the issue unveiled by House leaders this week, Obama called on Congress to complete work on immigration reform this year. Fixing “our broken immigration system” would help “create jobs for everyone” and could reduce deficits by almost $1 trillion over the next two decades, he said. NRF has repeatedly called for “practical, comprehensive” immigration reform.

The to-do list outlined by Obama is ambitious and it remains to be seen how many items he’ll be able to check off, either with lawmakers’ help or on his own. NRF will work as the year progresses to keep both the White House and Congress focused on steps that will help the business community create jobs, invest in the future and speed economic recovery.

Anybody who knows retail knows that simply couldn’t be true. Retail is one of the most competitive sectors of the economy. When retailers find a way to save money, they share it with their customers because they know that if they don’t the store across the street will – and shoppers vote with their feet.

Sure enough, NRF has seen countless examples of how the debit savings has benefited consumers. Some merchants, most notably gas stations, have offered discounts for paying by debit rather than credit card. Others have used the money to lower prices, hold off price increases that would have come with inflation, or offer larger and longer sales. The way the value has been passed along has varied: discounters have focused on price because that’s their customers’ priority. Upscale retailers have focused on service, perhaps adding extra sales associates for more personalized attention.

Unfortunately, the competitive nature of retail also makes retailers a close-mouthed group hesitant to let their competitors know what they’re doing. So, even though they quietly tell NRF, it has been difficult to get retailers to step forward and publicly proclaim what they’ve done with the debit savings. And that’s made it difficult to push back against false claims made by the banks.

Until now, that is.

This week, the Merchants Payments Coalition (founded by NRF and other trade associations in 2005 to fight swipe fees) released a landmark study by internationally known economist Robert Shapiro that finally provides hard evidence of how retailers are, in fact, sharing swipe fee savings their customers.

According to the study, retailers saved $8.5 billion in 2012 and passed along $5.87 billion of that savings to customers. In addition, the savings for consumers led to increased spending that boosted demand for goods and services, while retailers put much of their share into hiring additional workers or business spending that created jobs. In all, 37,500 new jobs were created, both in retail and industries that supply or support retail.

Shapiro, a former advisor to President Clinton, calculated that retailers shared 69 percent of the debit savings with customers, basing the figure on earlier studies of what retailers do when they see cost savings from vendors. One key study involved 23,000 cost reductions at 1,000 stores in more than 30 states.

During a conference call with reporters on Tuesday, Shapiro emphasized that the calculation was on the conservative side: since the debit swipe fee cap is permanent, merchants are even more likely to pass it along than a temporary price cut from a vendor.

Those who have followed the swipe fee debate will recall that NRF has a lawsuit pending against the Federal Reserve arguing that the Fed set the cap far higher than the “reasonable” and “proportional” level directed by Congress. The Fed first calculated that processing a debit transaction costs banks an average of only 4 cents, then proposed a cap of up to 12 cents before finally settling on about 21 cents after heavy lobbying by the banks. Shapiro addressed that issue in his study, saying if the Fed had stuck with the 12-cent proposal, swipe savings would have totaled $12.5 billion and 55,000 jobs would have been created.

A federal judge ruled in favor of NRF this summer, agreeing that the Fed set the cap too high. The Fed has appealed, so the issue won’t be resolved until sometime next year.

Until then, as NRF Senior Vice President and General Counsel Mallory Duncan said this week, “The fight to bring swipe fees under control is far from over.”

“We’d really like to get past this exercise of Congress kicking the can over and over again on issues like the debt ceiling or the fiscal cliff,” French said.

Nearly a year after consumers told pollsters that concerns over the economy and the “fiscal cliff” negatively impacted their 2012 holiday spending, another holiday season is quickly approaching and Congress once again faces a decision on whether to raise the debt ceiling.

As French told reporters from the Washington Post, Financial Times, Politico and other publications on Wednesday, NRF is worried that a repeat of those concerns could restrain sales again this year, and that Congress needs to resolve the issue quickly to keep that from happening.

The debt ceiling, he said, is a priority, along with immigration reform and tax reform: “If we can solve those issues, we can get the U.S. economy moving in the right direction.”

French met with journalists, in part, to explain that retailers are affected by a wide range of issues most people might not think of as “retail.”

“Retail has a stake in almost everything talked about in Washington,” he said. “Almost every public policy issue has a retail component to it.”

Despite being involved in many issues, retailers often “play as the away team,” French said. Banks can go before the Senate Banking Committee or House Financial Services Committee; trucking companies, airlines and railroads can go to either chamber’s transportation committee, and energy committees address the concerns of oil companies, for example. But there isn’t any retail committee.

(French’s explanation reminded me of the time I called a Los Angeles wire service reporter who covered the Ports of Los Angeles and Long Beach about contract negotiations with longshoremen. “I don’t cover retail,” the reporter said when he heard I was from NRF. I replied, “Yes you do. What do you think is inside all those cargo containers?”)

As an example, upcoming tax reform legislation is a priority for retailers because they benefit from few of the special deductions and credits that lower tax bills for other industries, French said. NRF favors reform that would eliminate those breaks and use the revenue that would be recovered to lower rates for all businesses.

In another example, French said the debate over “patent trolls” filing frivolous lawsuits over dubious patent infringements has focused on tech industries, but retailers have been frequent victims because of their use of cutting-edge innovations, especially in mobile and online sales.

And those silk ties? They were designed by NRF to express retailers’ frustration over Congress doing the same thing over and over again and expecting a different result. As French noted, that’s Albert Einstein’s oft-quoted definition of insanity.

You’re a member of the city council in an urban community with an unemployment rate as much as 50 percent higher than its neighbors, and the nation’s largest private employer offers to create nearly 2,000 jobs. Better yet, the jobs would come at new stores in underserved neighborhoods where city officials have been trying for years to attract major retailers.

End of discussion, right?

Not in Washington, D.C.

Mayor Vincent Gray late last week officially received legislation passed earlier this summer by the city council that would force big-box retailers to pay a minimum wage of $12.50 an hour. The mayor has 10 business days to decide whether to sign or veto the bill.

The bill is aimed squarely at Walmart, which was planning six stores – its first in D.C. – when the measure was passed in July. Those stores would bring badly needed permanent jobs to Washington, but Walmart said it would be forced to reconsider the three already under construction and to cancel the other three outright if the legislation is signed into law.

The legislation applies only to retailers, and only those with annual corporate sales of $1 billion or more and operating stores of 75,000 square feet or larger, narrowing it down to Walmart and a handful of others. Small retailers, who support the spirit of entrepreneurship but can create only a limited number of jobs at a time, would be exempt, as well as all other businesses.

Backers say they want “high-quality jobs” rather than “poverty-level wages.” But they ignore the fact that the city already has a minimum wage of $8.25, a full $1 above the federal minimum, and that retailers – Walmart included – already pay most workers more than minimum wage and offer a path to rewarding careers.

The truth is that Washington is in desperate need of jobs regardless of what they pay. As of July, the District had an unemployment rate of 8.6 percent. That compares with 7.1 percent in Maryland and 5.7 percent in Virginia, the two states that surround the city.

If Washington’s so-called “living wage” legislation becomes law, the chances are that few, if any, workers will ever see $12.50 because of it. Walmart could easily scrap its plans, and any other large retailer considering coming to town has already been scared off. Instead of close to 2,000 new jobs, Washington could see no jobs at all. If retailers don’t want to give up the Washington market, they could easily build just across the state line in Maryland or Virginia, taking jobs, wages, tax revenue and other economic benefits with them.

This isn’t the first time this has been tried. In 2006, the Chicago City Council tried to set a $10 minimum for some retail stores. Wisely, then-Mayor Richard Daley vetoed the measure. In a recent editorial, the Chicago Tribune warned Washington against “repeating Chicago’s mistake.”

NRF has been calling on D.C. residents and retailers with stores in D.C. to contact Mayor Gray and urge him to veto this bill. But this is actually a concern for retailers everywhere – if other cities were to follow Washington’s example, retailers’ efforts to create jobs and serve consumers across the country could be hampered.

Mayor Gray should follow the example of Mayor Daley and put job creation ahead of city council efforts to grandstand for voters.

“Patent trolls are increasingly targeting Main Street retailers,” the White House said, specifically citing infringement claims over retail point of sale software and business methods. “End-users should not be subject to lawsuits for simply using a product as intended.”

When the most recent patent reform law was passed just two years ago, frivolous lawsuits over dubious patent claims were a problem mostly for the high-tech industry and were rarely seen by retailers. Since then, patent trolls – companies that buy obscure patents from inventors and then make millions threatening to sue innocent users of the technology – have gone after merchants on a large scale. NRF has fielded complaints from more than 200 member companies – and those are just the ones we’ve heard from. More than 75 representatives from three dozen companies and organizations threatened by patent trolls – ranging from retailers to bankers to the entertainment industry – turned out for a meeting at NRF headquarters this week.

NRF Senior Vice President and General Counsel Mallory Duncan, speaking at a Capitol Hill event on patent trolls, said retailers using off-the-shelf products don’t necessarily know what patents are involved.

“As retailers, we are not patent experts,” Duncan said. “Retailers know no more about what is inside their point-of-sale systems than consumers know about what’s inside their cell phones, yet they’re being sued.”

NRF Senior Director for Federal Relations Beth Provenzano took a slightly different approach in a newspaper interview, telling a reporter “so much of retail is tech now that we’re being targeted by the patent trolls in a much more aggressive way.” You can read more on Duncan’s remarks in the Wall Street Journal and Provenzano’s in The Hill.

Both statements are true – retailers today are clearly on the cutting edge of technological innovation. But retailers are shopkeepers and merchants first, computer geeks second. Our industry recognizes challenges and finds solutions, but we partner with third parties who are responsible for what goes inside the magic boxes that make it all work. Just look at ads in NRF’s STORES magazine to see offerings on issues from digital signage to wireless video surveillance to supply chain management.

NRF is still reviewing the White House proposal, but officials there got at least one thing right – patent troll threats and lawsuits are a “drain on the American economy” that need to be stopped in order to protect American jobs and innovation.

But finding a good quote wasn’t a problem this week as I drafted a news release on NRF’s brief objecting to the proposed settlement of a federal antitrust lawsuit over credit card swipe fees charged by Visa, MasterCard and their member banks.

The brief called the settlement a “surrender” that fails to address the “core evil” of price fixing. It said “retailers simply cannot understand how the American system of justice” could consider allowing current practices to continue. And it added that “there is nothing that the credit card networks could give that is worth this unbridled loss of control.”

Phrases like those and many others in the 188-page document reflect the passion and emotion retailers feel over swipe fees. At a time when the economy is still recovering and many retailers are struggling to keep the doors open and their workers employed, swipe fees cost retailers $30 billion a year that could be used to better serve customers, reduce prices, open new stores or create new jobs. To put it in perspective, that’s as much as merchants lose each year to organized retail crime. And since the amount is too much for retailers to simply “eat,” the fees get passed on to customers and drive up costs more than $250 a year for the average U.S. household.

NRF filed its brief on Tuesday, the deadline for retailers to opt out of the settlement. So many retailers opted out that the court was still counting yesterday and it could be days before the tally is known. NRF’s brief was accompanied by statements from a broad cross-section of U.S. retailers representing almost every segment of the industry including luxury brands, department stores, apparel stores, specialty retailers, restaurants and every size from independent Main Street stores to national chains.

The opt-outs aren’t the only challenge to the settlement.

Attorneys general from nine states filed an objection to the settlement, also on Tuesday, with 48 states and the District of Columbia signing the brief in support. When attorneys general from across the country – respected legal authorities who come from a variety of backgrounds, political affiliations and geographic locations – agree that a settlement is a bad deal, that’s difficult to ignore.

In addition, a group of 17 large retailers including Macy’s, Target and J.C. Penney last week went beyond opposing the current settlement and filed a new lawsuit against Visa and MasterCard over the same swipe fees.

A decision on final approval of the settlement won’t come until a court hearing scheduled for September. But from the past week’s activities one thing should be clear: this “settlement” is far from settled.

But that wasn’t the case with NRF’s annual Washington Leadership Conference this week.

Retailers from across the country arrived Monday evening just in time to watch the Senate overwhelmingly pass the Marketplace Fairness Act – landmark sales tax fairness legislation NRF has had at the top of its priority list for more than a decade. And they were able to spend the next two days walking the halls of Congress to urge members of the House to follow the Senate’s example in voting to require online sellers to collect sales tax the same as local stores.

Rather than just another conference, WLC quickly turned into a combined victory celebration, pep rally and annual reunion of familiar faces in the long-fought battle to level the playing field between online and brick-and-mortar retailers.

Senator Michael Enzi, R-Wyo., sponsor of the Senate legislation, joined the party, as did Representative Steven Womack, R-Ark., sponsor of the House version. Both thanked retailers for their support, urged them to keep the momentum going, and emphasized that personal examples of how untaxed online sales are harming local stores and jobs will be the best ammunition to overcome objections expected in the House.

But as important as the sales tax victory was, it wasn’t the only part of the conference to get excited about.

Hundreds of retailers ranging from Main Street store owners to CEOs of some of the nation’s best-known brands turned out this year. Thirty-one states from across the country were represented, with Vermont sending the most retailers (five people from four businesses) and Washington State getting credit for the longest distance traveled (2,400 miles).

Retailers heard Cokie Roberts, veteran analyst for ABC television and National Public Radio, offer an overview of the polarized political scene in Washington, got lobbying tips from former Senator Blanche Lincoln, D-Ark., and former Representative Billy Tauzin, R-La., and participated in more than 80 meetings with lawmakers and staff in both the House and Senate. Committee meetings ranged from the NRF Board of Directors to sessions on loss prevention, retail technology standards and restaurant food supply chains.

NRF is already planning the 2014 Washington Leadership Conference. While it’s too early to say what next year’s “big bill” will be, we certainly hope any retailers who show up expecting to lobby on sales tax fairness will find out they’re too late – if this spring’s momentum can be maintained, the Marketplace Fairness Act could be a law that’s already on the books by then.

To see WLC 2013 in photos, watch NRF’s Flickr slideshow below.

“How could somebody walk into a business and order online right in front of them? That’s a slap in the face!” Womack said. “They ought to have the decency to at least walk outside.”

The Arkansas Republican spoke late Tuesday afternoon at NRF’s annual Washington Leadership Conference, less than 24 hours after the Senate overwhelmingly passed the Marketplace Fairness
Act, legislation that would allow states to require online sellers to collect sales tax the same as local stores.

Womack is the lead sponsor of an identical bill in the House, where the battle will now shift. And he urged retailers to use personal stories like his example of “showrooming” to keep the momentum building and convince House members it’s time to level the playing field between online and brick-and-mortar retailers.

“They have marched this ball down the field in an extraordinary way,” Womack said of Senate sponsors of the legislation. “If we’re not successful at marching this through the House, we’d might as well put up a billboard and say ‘shop on the Internet because it’s tax free and always will be tax free.’ ”

Sales tax fairness is expected to face a tougher fight in the House, where Speaker John Boehner, R-Ohio, told Bloomberg Television Tuesday night he will “probably not” support the measure because “you’re putting a big burden on some very small businesses.” (Despite those concerns, online sellers with less than $1 million in out-of-state sales each year would be exempt, and collection would be handled by software paid for by the states.)

Unlike the Senate, which skipped the committee process in considering the bill, the House plans to send the bill to the Judiciary Committee for hearings, debate and a vote rather than going directly to the floor.

Womack was undaunted by the potential obstacles, saying he welcomes the full committee process so no one can claim that the bill was rushed through.

First elected to the House in 2011, Womack is an admitted newcomer to the congressional debate over sales tax, which has been waged by Senate advocates like Mike Enzi, R-Wyo., and Richard Durbin, D-Ill., for more than a decade. But that doesn’t mean that he’s new to the issue – as mayor of Rogers, Ark., he presided over development of a $250 million shopping center that opened in 2006 and brought new retail stores to the city of 55,000. Even then, “I knew if we didn’t come up with a solution for (sales tax fairness) what would be done to our retailers.” Having fought the sales tax fight in Congress, “I’m even more motivated now.”

Newcomer or not, Womack is pursuing his goal with the fervor of a true believer: “I believe in my heart that this bill is going to pass,” he promised. “If not, we as Congress will have presided over the destruction of retail as we know it.”