Expect the Exceptional: KWI Receives its SSAE-16 Type 2 ReportSSAE reviews are so thorough, they make an IRS audit look like a cakewalk. Our review was conducted by BDO, one of the world’s premier accounting and financial consulting firms. Our process began with staff interviews at every level … more_________________________________________

Client Highlight: ASICS: Off to a Running StartA top name in sporting gear is getting a “runner’s edge” in retail with KWI! ASICS is the leading manufacturer of specialty shoes for running, wrestling, volleyball, tennis, soccer, walking, plus performance apparel. This year this year they’ll be opening their own specialty stores … more_________________________________________

Who’s Who at KWI:Meet Phyllis Gricco, Director of Concierge ServicesHats off to Phyllis Gricco, KWI’s new Director of

Concierge Services! Phyllis has long been an integral member of the KWI team, having joined us in 2007 as Director of Operations for KWI Merchant Services. During her tenure … more

KWI Product Roadmap: Speeding Your Way to Retail Success!This year, for the first time, we are sharing our comprehensive 2012 Product Roadmap to help you “navigate for success”. As you’ll see, we have dozens of exciting, leading-edge innovations planned for the months ahead … more____________________________________________

SHORT CUTS: Quick Tips to Enhance Your Retail Success E-Mail Strategies: Always Best to Test!For better results on your promotional e-mails, it pays to know your ABC’s … or at least your A/B’s as in A/B Split Testing. It can be done simply, costs virtually nothing and will increase your conversion rates … more____________________________________________Electronic Check Services: An Overview

Electronic check services provide additional methods of accepting customer payments. This method of payment processing is especially effective for businesses that have

thousands of transactions per month. The benefits include … more____________________________________________The Startling Truth About Return Fraud

It’s a common misconception that an original receipt validates a return. With modern POS systems addressing as many possible scenarios of customer accommodation as possible, the

reprinting (or forging) of original receipts is made all too easy … more

KWI Product Roadmap: Speeding Your Way to Retail Success!

Every year, KWI refines its strategic vision by creating a “roadmap” of planned service enhancements. This year, for the first time, we are sharing our comprehensive 2012 Product Roadmap to help you “navigate for success”. As you’ll see, we have dozens of exciting, leading-edge innovations planned for the months ahead.

“Our clients are truly our partners,” says KWI president Sam Kliger, “and we want them to know we’ve been hard at work preparing these enhancements. When you put them all together you’ll see that KWI’s level of client commitment is absolutely unbeatable. Everything on this Roadmap has one purpose: to support our clients’ success with exceptional retail solutions. Our new Cloud 9 Mobile POS is just one recent example of the innovative technology we seamlessly integrate into our service suite.”

Unlike other service providers who publish their roadmap, KWI does not require clients to upgrade in order to access new capabilities. Our superior business model, which has always been cloud-based, automatically gives all our clients access to technology advances. No upgrades, no complex implementations. It’s a simple, and powerful, advantage enjoyed by every KWI client.

Below are some highlights of what’s new and improved. To view the complete KWI 2012 Product Roadmap, click here.

Roadmap Highlights: Q1 & Q2Enhancements that are going to be introduced in the very near future:

Advanced Search A major and complete upgrade enhances the merchandising search feature so users can

easily search the merchandising system’s help screens. This fast, productive process is powered by an internal Google search engine.

Self-Service Tax Module The KWI support team gets requests virtually every day to make changes to our

customers’ tax tables. This new module enables all our clients to self-manage tax rates at individual store and/or merchandising hierarchy levels. Now it’s amazingly easy to set up temporary tax-free events or make permanent changes. Never again will you need to submit projects to update your tax tables.

(continued, next page)

< Back to Page One

< Back to Page One

Mobile POS 3.0 New enhancements include the ability to: process returns with receipts across the

entire chain, not just in-store purchases; process line item or transaction level discounts; suspend and resume transactions.

Roadmap Highlights: Q3 & Q4Coming in the second half of the year:

Merchandising System Home Page Redesign A complete Home Page redesign will enhance your usage of Merchandising Systems.

New features include the ability to view user-saved sessions, reorganization of the menu categories, and ability to instantly view the most popular reports.

Generic Enter Screen 2.0 Provides ability to update multiple records or items at one time via the data entry

screens.

Enhancing POS Technology and Functionality Enhanced log maintenance provides the new ability to remove encrypted card numbers

and/or purge logs based on age. This reduces PCI risks. We’ve also made a significant Store 6 upgrade; key features include:

•Fingerprintlog-ontechnology •ComplexPasswordSupportandLockouts •PromoPriceinItemInquiry •ForeignExchangeTool •Store6multi-channelfulfillment •End-to-EndHardwareencryptionforsuperiorcardnumbersecurity •Enhancedpinpadcapabilityallowsallcardformstobeswiped

Again, for complete details on this impressive collection of product and service improvements, check out our complete Roadmap document. And if you have any questions, please don’t hesitate to call or email ... we’re standing by to serve you!

For more information, contact Gary Brill, Vice President Business Development, at gary@kwi.com or call (516) 621-2400 ext. 325.

Short Cuts:Quick Tips to Enhance Your Retail Success

E-Mail Strategies: Always Best to Test!by Evan Rubin, VP, KWI-CRM

For better results on your promotional e-mails, it pays to know your ABC’s ... or at least your A/B’s as in A/B Split Testing. It can be done simply, costs virtually nothing and will increase your conversion rates.

In basic A/B Testing, you randomly split a sample of your database into two groups, and deliver a unique e-mail blast to each group. The results will quickly show you which approach – Message A or Message B – is more effective. Then you can swiftly follow up with a blast of the best offer out to the full population.

For example, you can test a product feature vs. price promotion in the e-mail blast subject line, test two different creative concepts in the e-mail copy and design, test two different approaches in the landing page, and immediately see which overall approach is the top performer. You can try tying in to some relevant current event in the news, study the effects of personalization, and any other A/B Split that makes sense for your particular product offer.

With an ongoing program of consistent A/B Split testing, you can also: 1. Gain insights into visitor behaviors and priorities when they enter your web site. 2. Use it as a diagnostic tool to reveal problems on your site pages. 3. Challenge assumptions and discover new truths about the best way to construct your offers

and webpages.

KWI provides CRM expertise to help you design the most productive A/B Split Testing strategies. We’ll work with you to develop the most appropriate protocols for testing every element of your promotional e-mail blasts, including your subject line and call-to-action, body copy and graphics, even choice of color and layout configuration. Give us a call, and take your customer e-mail results to a higher level.

For more information, please contact Evan Rubin, Vice President KWI-CRM, at erubin@kwi.com or (516) 621-2400, ext. 367.

< Back to Page One (continued, next page)

< Back to Page One

Electronic Check Services: An Overviewby Phyllis Gricco, Director of KWI Concierge Services

Electronic check services provide additional methods of accepting customer payments. But what exactly is it?

Electronic check service allows customers to pay for goods and services using their personal or business checking account. This method of payment processing is especially effective for businesses that have thousands of transactions per month. The benefits of electronic check processing include: 1.Lesschanceofacceptingbadchecks 2. Fewer trips to the bank to deposit checks 3. Convenience of an additional payment method 4. Funds deposited faster in the merchant’s bank account

Once you decide to accept checks as a form of tender, you can choose from different options:

Check Verification: Compares the check writer against a national list to identify any discrepancies so you can avoid accepting checks from someone with a history of writing bad checks. Also scans check through a magnetic reader to verify authenticity.

Check Conversion: Converts a paper check into an electronic transaction, by passing the physical check through a check imager or a magnetic check scanning device. After imaging, the check is electronically deposited in the retailer’s bank account. To assure sufficient funds, a check guarantee service usually accompanies check conversion.

Check Guarantee: The check processing company verifies the check and guarantees its value. Should the check still turn out to be insufficient, the check processor takes responsibility, giving the retailer full value and taking action against the fraudulent check writer. For more information, please contact Phyllis Gricco, Director of KWI Concierge Services, at pgricco@kwi.com or (516) 621-2400, ext. 301.

The Startling Truth About Return Fraudby Frank Antonetti, Field Auditor, The Zellman Group

Spring brings renewal – a great time to examine your business, measure success and identify opportunities for progress. It’s also a good time to review some of your key statistics, both personal and industry-wide. One startling set of numbers that every retailer should know is the amount of loss that occurred during the past year as a result of Return Fraud.

According to the NRF, retail fraud and abuse may have risen as high as $18.4 billion in 2011 — the highest ever reported. Where money is lost, so are jobs, as many as 673,000 according to some estimates. The retailer’s challenge is

to balance a return policy that protects against fraud with one that will also keep honest, frugal and cautious customers satisfied and confident in their purchase. While a number of new return policies are being rolled out (and just as many repealed), consider that while policies come and go, a few fundamental truths still remain.

First is the common misconception that an original receipt validates a return. With modern POS systems addressing as many possible scenarios of customer accommodation as possible, the reprinting (or

(continued, next page)

forging) of original receipts is made all too easy. Forged receipts rose nearly nine percent over 2010, and non-receipted returns also increased. This not only indicates external fraud, but can also be a sign of internal fraud, executed by employees who reprint original receipts of actual sales, or generate false returns.

Many retailers have begun requiring a form of ID to accompany all refunds; however, state and federal laws protecting identity and civil rights can lead to complications with this practice.

What’s a fraud-conscious retailer to do? It’s still a Best Practice to monitor refund levels against your store’s norm. Point of Sale Analytics can monitor stores and quickly identify spikes in refund activity, which can then be investigated further.

In our next article we will examine more methods of protecting your business against return fraud.

For more information, please contact Kimberly Bloomston, Vice President, Loss Prevention Operations, at kbloomston@zellmangroup.com or (516) 625-0006, ext. 406.

< Back to Page One

Expect the Exceptional:KWI Receives its SSAE-16 Type 2 ReportIn the world of data compliance, there are quality controls, and then there’s SSAE. This incredibly rigorous review – its full name is Statement on Standards for Attestation Engagements No. 16 Type 2 engagement – is conducted by independent accounting firms to ascertain stated control objectives are met at the most detailed, drill-down level.

These reviews are so thorough, they make an IRS audit look like a cakewalk. Our review was conducted by BDO, one of the world’s premier accounting and financial consulting firms. Our process began with staff interviews at every level, from KWI management to line personnel. In order to prove that business controls and processes were followed as stated, a large number of random dates were selected and policy performance was inspected and reviewed by an independent CPA firm. It was an exhaustive “due diligence” process that resulted in KWI achieving its SSAE-16 Type 2 report.

For our clients, this verifies the effectiveness of KWI’s internal controls and security for our Cloud-based services. The review tested the effectiveness of our controls through December 31, 2011.

Jim Barbas, KWI’s VP of Technology & Infrastructure, states: “KWI strives to provide our clients with the security and controls they need for their businesses. Receipt of these reports confirms our commitment to processes and standards that enable us to maintain the quality and security controls that our clients need. Clients can be assured that KWI’s internal controls and data security safeguards are in place.”

SSAE 16 is maintained by the American Institute of Certified Public Accountants, and is the successor to the Statement on Auditing Standards No. 70 (SAS 70), which was the “gold standard” in service organizations control system review for almost two decades.

With our current certification, KWI demonstrates our continued commitment to infrastructure and process management best practices. We’ve been meeting, and setting, standards of excellence since our founding in 1985.

Note: KWI’s SSAE-16 report is available for review when clients sign an NDA (non-disclosure) Agreement.

About BDO BDO is a leading accounting and consulting organization with an extensive national and global footprint, sophisticated and loyal clients, and a talented team of people. Yet, despite its size and stature, BDO remains a family business in spirit, holding steadfast to the ideals of competence, honesty and integrity, professionalism, responsibility and accountability, and dedication, M.L. and the Seidman family ingrained

< Back to Page One

(continued, next page)

< Back to Page One

in the culture of the firm. These core values have helped BDO grow to serve clients through 41 offices and more than 400 independent alliance firm locations nationwide. As the U.S. independent Member Firm of BDO International Limited, BDO serves multinational clients through a global network of 1,082 offices in 119 countries.

For more information contact Jim Barbas, Vice President of Technology & Infrastructure, at jbarbas@kwi.com or call (516) 621-2400, ext.322.

ASICS: Off to a Running StartA top name in sporting gear is getting a “runner’s edge” in retail with KWI! ASICS is the leading manufacturer of specialty shoes for running, wrestling, volleyball, tennis, soccer, walking, plus performance apparel and more. The company’s name is an acronymderivedfromtheLatinphrase,AnimaSanaInCorpore

Sano, meaning “a sound mind in a sound body”. ASICS was founded on the belief that the best way to create a healthy and happy lifestyle is to promote total health and fitness.

True to its founding philosophy, every ASICS innovation is intended to create the best product. Their mission is to become the number one brand for the sports enthusiast. To accomplish this, they push the limits on athletic performance – both through their own technological advances, and via long-standing sponsorship of many races and marathons worldwide.

While ASICS products have been available in the US since 1977, this year they will be opening their own specialty stores. We’re pleased to share the news that they have selected KWI as their retail solutions partner. They’ll be implementing our suite of services including Merchandising, POS and Merchant Services, and taking full advantage of our new Cloud 9 Mobile POS technology.

KWI makes a great fit with ASICS: like them we are focused on being the best for our customers, and like them we push the edge of technology in order to constantly enhance performance. We warmly welcome them to our Winners Circle of distinguished clients.

For more information, contact Gary Brill, Vice President Business Development, at gary@kwi.com or call (516) 621-2400 ext. 325.

< Back to Page One

Who’s Who at KWI:

Meet Phyllis Gricco, Director of Concierge Services

Hats off to Phyllis Gricco, KWI’s new Director of Concierge Services! Phyllis has long been an integral member of the KWI team, having joined us in 2007 as Director of Operations for KWI Merchant Services. During her tenure in this role, Phyllis has at one time or another worked with every

member of the KWI family of clients. Her expert knowledge and warm, outgoing personality made her the “go-to” source for any and all questions relating to the payment industry. So it was a natural progression for her to segue into a broader customer service role within KWI.

Phyllis replaces Brian Mallia who departed from KWI (and the industry) to join his family’s long-standing business, with well-wishes from us all.

As Director of KWI Concierge Services, Phyllis will be responsible for maintaining client relationships and providing education on new KWI services and products. She will be the Client Advocate and work as liaison between the client’s team and KWI staff. Her proactive style and willingness to go the extra mile make her a valuable asset to the Business Development Team.

Phyllis received her undergraduate degree from Pennsylvania State University with a degree in Political Science and Sociology, and then went on to receive her Master’s Degree in Business from University of Phoenix.SheresidesonLongIslandwithherhusbandJohnandtheirdogGeorgie.

To congratulate Phyllis, drop her a note at pgricco@kwi.com or call (516) 621-2400, ext.301

< Back to Page One