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Walmart’s Clever Price-Comparison Trial: Show-and-Tell Without Going To The Store

September 4th, 2012
Walmart has started a trial in three cities where shoppers can E-mail photos of competitors' receipts, inviting Walmart to do its price comparison without the shopper ever having to actually walk into a Walmart. This clever gambit shares some of the strategy of its online cash program, where the chain didn't want to lose online shoppers merely because they didn't have—or didn't want to use—a payment card.

In this trial program, called logically enough "the Receipt Comparison Tool," the idea is to showcase hopefully lower prices to consumers who don't want to walk into a Walmart store. It's sort of a Missouri approach, with the shopper in effect saying, "Show me. I like my store. But if you show me concretely how you'd charge me less for the same stuff, I'll drive over to your store quickly enough. But you show me first." The IT challenge is to accurately compare prices for a specific Walmart store at a specific time—no easy task, given that each store has its own prices and that those prices can change hourly.Read more...


Federal Appeals Court Green-Lights Tracking Shoppers By Mobile

September 4th, 2012
Retailers wrestling with how far they can legally go with tracking shoppers' movements within their stores and in neighborhoods near their stores have been given an unexpected green light from a federal appeals court. The Sixth Circuit of the U.S. Court of Appeals ruled that Americans have no right to expect privacy when it comes to their phones' location, pens Legal Columnist Mark Rasch.

Although the case before the panel—which ruled August 14—involved accused drug traffickers, the jurists made it clear that privacy was not waived simply because of criminal activity. "We do not mean to suggest that there was no reasonable expectation of privacy because (defendant's) phone was used in the commission of a crime, or that the cell phone was illegally possessed," the Sixth Circuit ruled in its written decision. "On the contrary, an innocent actor would similarly lack a reasonable expectation of privacy in the inherent external locatability of a tool that he or she bought." That's a crucial point for retailers, as was wording that people who could otherwise be seen by other people—such as when walking down an aisle at Costco or JCPenney or walking in a neighborhood near a Target or Walgreens—could not reasonably believe that their location is a Constitutionally protected secret.Read more...


Yes, McDonald’s Is Testing Mobile Payment In France. PayPal? Not So Much

August 23rd, 2012
That McDonald's/PayPal trial in France you've heard so much about for the past week? Turns out it's not actually a PayPal trial at all. McDonald's France, which has been experimenting with online ordering since 2010, launched a new version last February that does include the ability to pay online using PayPal—or any payment card—before picking up the order in a special line in-store. But a big new PayPal mobile payment app? That doesn't exist.

Even the possibility that the French order-online-pick-up-in-store system is being tested for eventual U.S. launch looks like wishful thinking, considering how differently McDonald's uses customer-facing technology in France.Read more...


Cheapness Could Kill Walmart/Target Payments Effort

August 23rd, 2012
It's easy to forget that the Walmart- and Target-led mobile payments initiative dubbed MCX isn't really about mobile payments. It's about interchange—specifically, forcing Visa and MasterCard to cut interchange rates by threatening to cut them out of a big chunk of chains' transactions. Trouble is, it's also about some magical thinking: the idea that somehow mobile technology will make the plastic payment card disappear.

And at heart, it's about how much money chains are willing to spend to dislodge the card brands from their lock-in. Short answer: not very much.Read more...


PayPal/Discover’s Retailer Problem:Too Much Data?

August 23rd, 2012
When PayPal on Wednesday (Aug. 22) announced a deal with Discover for it to deliver far more in-store payments—something that PayPal said could eventually place it into millions of stores and requires no POS hardware or software changes—it did something beyond fulfilling the industry's RDA for caveats. It positioned itself in front of three serious obstacles: getting consumers to change their behaviors; convincing lots of acquirers—many of which have alternative allegiances—to permit it; and getting retailers comfortable with an awful lot more data-sharing than they're used to.

That kind of data-sharing is exactly what many of the retail treasury sorts behind the MCX retail mobile payment alliance have feared. "Whatever the retailer is passing over the lines today, in this initial phase, we'll get that data. We believe the data is that of the retailers, and we would not use that information to share with other retailers," said Don Kingsborough, PayPal's VP of Retail and Prepaid Products. "But, at the same time, when you combine it with our online and mobile information, it becomes very powerful information that we can use—with the retailers."Read more...

Stolen POS Tablets? Apple Can Track Them

August 22nd, 2012
Tablets, especially those used as in-store mobile POS, are nightmarishly easy to steal. But in the wake of the burglary last month of Steve Jobs' home, we now know just how effectively Apple investigators can track a stolen iPad. You want fast? Apple fingered the thief only one day after police called the vendor. It's even faster if the thief wipes the tablet, which thieves tend to do.

Given that a thief can easily walk off with a device that costs hundreds of dollars to replace and is easy to sell, this could change the loss-prevention equation when it comes to tablets. The biggest challenges now may be making sure the POS app is locked down—and convincing police to call Apple. Exactly how easily and extensively can Apple track? Details shared with police are telling.Read more...

Is It Time To Insist On Mobile Authentication Beyond PIN?

August 22nd, 2012

Is it time to insist that mobile devices have some type of authentication beyond PIN? The frightening scenario: A thief watches a shopper making a mobile purchase at the mall and shoulder surfs his 4-digit PIN. The thief steals the phone, walks into a store, buys a $5,000 necklace with that phone and that PIN and then dumps the phone into a trashcan.

That authentication might be biometrics (the phone can scan the buyer’s facial shape, match a voiceprint or do a retinal scan, although preferably not a fingerprint) or a onetime-password fob or even—for the ultimate simplicity—a rotating series of personal questions, so that shoulder-surfing wouldn’t work. Even Square and SMB PayPal trials are using customer photos for verification. But with in-store mobile purchases now going into widespread retail trials, it may be time for some real security. Or is the absurdity of signature verification not enough to motivate anymore? …

Mobile Conversion Rates May Not Mean What They Seem To Mean

August 22nd, 2012
When E-Commerce execs look at stats comparing mobile and desktop online shopping, one key goal is often to determine conversion, meaning how often consumers close the deal and buy something. But does typical conversion rate data really show that information when it comes to tablets and smartphones?

A report this week from vendor Monetate, for example, showed that desktop devices (laptops, PCs and Macs, primarily) in Q2 2012 typically converted at 3.34 percent, while tablets converted at 3.17 percent and smartphones came in at a measly 1.09 percent. The question is, though, what does it mean when a smartphone shopper doesn't close the deal? Could that shopper actually be inside the store at the time and close the deal by taking the item to a checkout lane? Or perhaps that customer is on the train coming home from work and chooses to do the research, browsing and deciding on his or her phone and then saving the winning product to a shopping cart, with the intent of purchasing that night from a laptop at home?Read more...

Inside The Interchange Revolt

August 16th, 2012
When a group of retailers pushing its own mobile payments approach formally announced its name—the Merchant Customer Exchange (MCX)—and a sampling of its newer members (7-Eleven, Best Buy, Lowe's and Sears, among the bigger names) on Wednesday (Aug. 15), it was the culmination of more than two years of talks. But with so much having changed in recent months, there are serious questions about what the group can realistically accomplish.

This comes on top of the usual political bickering when an organization includes such suspicious rivals as Walmart and Target. Indeed, participants also describe collisions between the group's treasury/finance people (who represent the bulk of the dues-paying members) and those same chains' marketing/mobile groups (who have very different objectives).Read more...

Macy’s: Adding Same-Day Delivery Would Cost Us Next To Nothing

August 15th, 2012
The big news from Macy's earnings call on August 8 isn't that the department store giant might someday offer same-day delivery if customers ever show a desire for it. The real news is that same-day would require almost no capital outlay, nor will expanding Macy's current store-to-door delivery program beyond the currently planned 290 stores, according to the person who should know: Macy's CFO.

By not building out its delivery capabilities according to some grand plan, the 800-store chain has put itself in a position to do almost anything it wants. And because the CapEx is so low, the ROI is essentially instantaneous.Read more...

IKEA Kills Self-Checkout In The U.S. For An Unusual Reason: It Was Too Secure And, Therefore, Too Slow

August 15th, 2012
The IKEA Group's U.S. operations have become the latest chain opting to rip out self-checkout POS, concluding that the systems simply required too much oversight and staff time. But in this case the decision is more nuanced, as the chain is keeping self-checkout at its European and Canadian stores, among others.

A key reason? The U.S. stores' systems were more secure and more sophisticated, which also slowed down operations more. The irony: Had the U.S. self-checkout systems been less secure, they might still be there.Read more...

Testing Shows Mobile POS Power Supply Sharply Reduces Read Range

August 15th, 2012
Due to a mobile power supply issue, MasterCard has discovered that retailers using a smartphone as a portable POS may find that customers will need to hold their card right against the antenna, which is hardly the way it's supposed to work. The problem, which was discovered in internal MasterCard prototype phone testing, involves the fact that traditional POS AC powered from a wall outlet, whereas mobile phones are powered by small batteries.

Less power means shorter antenna range, which in turn means the payment card needs to be almost touching the antenna. "The read-rate is not what you need it to be, certainly not the 4 centimeters you expect it to be," said John Verdeschi, Senior Business Leader of Product Development at MasterCard. Read more...

Toys”R”Us CRM Foils Another Perfectly Good Theft, After He Takes $2 Million From 139 Stores

August 15th, 2012
Being greedy is the telltale sign of a good professional thief, but there are limits. And a pair of shoplifters this week learned that if you're going to steal $2 million worth of toys from Toys"R"Us—specifically, from 139 stores in 27 states—it's best to not use a loyalty card. Yes, it was that CRM card that led police to our duo.

Granted, these aren't the first thieves to be done in by those not-so-loyal cards—a Sears associate got zapped last year—but they are among the best. Seems that Michael Pollara of Florida was hitting quite a few Toys"R"Us stores using the ever-popular box stuffing trick (take a big box with a cheap item in it and replace the contents with something much more expensive).Read more...

Sears, KMart Outage Was To Prep For The Holidays

August 15th, 2012

The sites for Sears and KMart were down for about three hours on Wednesday (Aug. 15), starting around 9:00 AM New York time, in what the chain said was an intentional outage to prepare for an unspecified infrastructure upgrade for the fourth quarter. Planned weekday outages are becoming more common and, for some chains—such as Home Depot—it can be an ideal time to take the site down. One apparel chain has even been using outages as marketing opportunities.

And when Best Buy recently had its own planned outage, not only did the retailer reveal how dependent its physical stores and call centers have come to be on the site, but it also set itself up for an imminent move to the cloud. And it’s that type of infrastructure improvement that Sears had in mind. “It’s a longer term enhancement that we did want to get complete in advance of the holidays,” said one Sears manager. Outages—they’re not just for disasters anymore.…

FTC Says It’s Now Going After A Lot More Than Just Violated Privacy Policies

August 15th, 2012
In another sign the FTC is putting some teeth in its enforcement, the commission followed up the announcement of its $22.5 million privacy settlement against Google on August 9 with a list of ways companies may be turning themselves into FTC targets.

In a blog post on Monday (Aug. 13), FTC Senior Attorney Lesley Fair said that following a published privacy policy isn't enough. The FTC could go after businesses that misrepresent privacy protections in their opt-out and customization instructions—or even just those that join an industry self-regulation group but then don't follow its code of conduct.Read more...

Chip Card Confusion Could Challenge Chains’ POS Plans

August 15th, 2012
Visa recently issued a bulletin with recommendations for implementing chip cards in the U.S. market. Don't ignore this document, writes PCI Columnist Walter Conway. You may not know all you think you do about Visa's plans and what retailers need to do. Most important, merchants must be sure their POS devices accept both EMV contact chip cards and traditional magnetic stripe cards. Make a mistake, and you might have to buy equipment all over again.

Unfortunately, not all acquirers are getting the right message out to merchants. One client recently related that an acquirer told the merchant there was no need to upgrade its devices to read chip cards.Read more...

Starbucks-Square Deal Says More About Square Than Starbucks

August 15th, 2012
One of the things last week's Starbucks-Square deal demonstrates is that Square found out just how hard it is to make a living selling services to small retailers and hotdog carts. For every coffee shop and dry cleaner that signs up to move their credit-card processing and POS to Square, there are likely dozens of other people who get a dongle strictly as a novelty, pens Retail Columnist Todd Michaud.

"People like me, or the Girl Scouts, who use it one month a year selling a few hundred dollars worth of cookies," he wrote. "They are basically a next-generation ISO that is riding the wave of Apple-fandom to bring credit-card processing to the masses."Read more...

At $83.8 Billion A Year For School Supplies, The Definition Is Broader Than Most Assume

August 13th, 2012

A recent survey report from the National Retail Federation (NRF) touted how much would be spent on school supplies, sometimes more generically referred to as back-to-school spending. Even with that encompassing umbrella term, the figures seemed to be quite a reach. We noticed this when American Express—citing the NRF data—talked about parents spending $83.8 billion in school supplies this year.

It seems the NRF has a return to classes for K–12 families costing $688.62, with estimates of $95.44 on actual school supplies, $129.20 on shoes, $246.10 on clothes and $217.88 on electronics. Families with college students will average $929.35, but that includes things like dorm furniture and college-branded apparel items. Also food, which was never something I thought of as a back-to-school item. Wouldn’t parents have to buy clothes, shoes and electronics for their K–12 kids even if they weren’t in school? And don’t college students eat pretty much continuously throughout the year? (About every hour, according to my recollection.) That said, food is being sent to school with students and many of these categories have some relevance. It’s a huge number, but retailers might want to rethink what they consider school supplies.…

Starbucks Mobile Deal Chops Its Card Costs

August 9th, 2012
In the Square deal Starbucks announced on Wednesday (Aug. 8), the coffee company sharply cut its payment processing costs by turning over all of its U.S. credit- and debit-card processing to the Visa-backed Square. Although Starbucks wouldn't comment on how deep the savings would be, some are suggesting that the processing savings—not the interchange fees—could be almost complete. Hey, a $25 million investment should be worth a little discount, no?

Also, despite what various media reports implied, when Starbucks starts accepting Square payments right before the holiday sales rush it will not be the mobile phone stays in the pocket customer identified by first name and a POS-displayed photograph approach that Square has done with a handful of smaller merchants. No, the Starbucks approach will mirror the exact method it's been using for its own mobile payments for years: Customers will display a 2D barcode on their mobile phone, the Starbucks associate will scan that code, and then the store's existing POS system will handle it normally.Read more...

eBay’s Same-Day Delivery Contrasts With Amazon’s Same-Day In Just About Every Way

August 9th, 2012
eBay this month has joined Amazon in experimenting with same-day delivery. Although both are delivering same-day, they are doing it in almost the opposite way. Amazon's effort is being offered at a Premium price, while eBay is offering close to loss-leader pricing. Amazon—rightly or wrongly—is seen as a threat to brick-and-mortars, whereas eBay is emphasizing that it's buying from partner retail chains at full price. Amazon's same-day delivery requires very early morning orders and as long as 13 hours for delivery, whereas eBay is targeting—and, it claims, delivering—everything within one hour.

eBay's trial run seems to be deliberately low-cost and extra-fast delivery to truly see who would use such a service under the best of conditions. It's highly unlikely that a national rollout could continue such specs. eBay's approach isn't all good for retail partners; only the eBay brand is shown, which reduces the chains to unseen suppliers—albeit well-compensated unseen suppliers.Read more...

Will Google Wallet ID Give Thieves Access To More Cards?

August 9th, 2012
Security wasn't Google's top priority when it came up with its new architecture for Google Wallet—mainly, the Android-maker wants customers to actually start making mobile payments with it. But by replacing actual payment-card numbers on the phone with a Wallet ID that looks exactly like a payment-card number to processors, Google has raised some new security questions that so far don't have clear answers.

For example, what happens if a thief manages to scoop up that Wallet ID? Could that give him access to all a customer's payment cards? There's no current mechanism for shutting down all of a shopper's cards. That's the hole with today's fraud systems: Everything at the processor and card-brand level was designed to protect cards, not wallets.Read more...

Tesco’s Barcode Scan Security Dilemma

August 8th, 2012
In late July, a U.K. programmer was at his local Tesco store when he noticed something unusual about a barcode. As programmers are inclined to do, he spent an inordinate amount of time online trying to decipher the barcode. He was joined in that effort by other like-minded techie folk, who eventually deciphered it. If that was the end of the story, it would be unremarkable in the extreme. But it's not, and it's Tesco's reaction that makes things interesting.

Tesco's reaction—overreaction? Ludicrously counterproductive overreaction?—was fueled by the interaction of mobile and self-checkout. That mobile/self-checkout part is where barcodes can be fed into systems manually. But if you think this is no more dangerous than a shopper getting a $3 half-gallon of milk for 3 cents, think again. It goes way beyond fake product barcodes to include fraudulent coupons, forged giftcards and SQL injection attacks. Read more...

What Does Time Spent Mean For A Mobile App? Not What You Might Think

August 8th, 2012
A very interesting mini-report from Nielsen came out on Wednesday (Aug. 8), one that ranked the top mobile shopping apps used in June. But when it also listed those with the highest time spent, it glaringly failed to say why. And that "why" makes all of the difference.

In that category, Shopkick blew everyone away with an average of 3 hours, 19 minutes and 11 seconds. So why did Shopkick blow everyone else away, average time spent wise? It has to do with the nature of that app, not that its users were so enraptured by the content.Read more...

Should PIN Pads Be Hardened? This Reader Says They Should Be Dumped

August 8th, 2012
Is it even worth hardening PIN pads against hacking? After last week's story on Verifone's device-breach problems, one StorefrontBacktalk reader commented: "Hardening PIN pads just kicks the can a few feet down the road, the way PCI kicked magstripes down to Chip-and-PIN. But it's still the same can and the same road, so why do we think the same problems won't keep chasing us?" His conclusion: Make payment cards much smarter and eliminate the PIN pad entirely.

That's a great idea for large chains. But smaller merchants will have to buy in, too—and they're the reason every attempt to improve payment cards so far has failed.Read more...

As The POS Turns: Vivotech Is On Life Support

August 1st, 2012
Vivotech is in trouble. The contactless PIN pad maker, which counts Home Depot and McDonald's among its customers, announced on July 27 that it is trying to sell its hardware business and restructuring. This came amid reports earlier the same day that the company was shutting down. Either way, Vivotech is the latest casualty of the failure of both contactless cards and mobile payments to get traction with consumers.

It's also another blow to the credibility of Google Wallet and ISIS (both signed up Vivotech as a POS partner) as well as PayPal's in-store payment system (Vivotech put a "Pay with PayPal" button on all those Home Depot PIN pads).Read more...


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