Evan Schuman's StorefrontBacktalk

Home Depot has been using a CRM practice that uses payment-card numbers to match in-store customers with their online purchases. It’s a move that, although likely passable for PCI, is rather unnerving to privacy advocates.

Home Depot officials stress that they only use the technique with shoppers who opt in, an argument that is somewhat tempered by how often consumers don’t even notice privacy opt-in and opt-out Web site declarations. The chain has been using this technique for various purposes, including E-mailing in-store customers to ask them to review their recent purchases.

Home Depot’s use of the card-matching procedure is not that unusual among major chains, but the norm is for the effort to be kept internal, to help improve general marketing. It was Home Depot’s reaching out to customers that made some of them realize what was going on. And therein lies the problem.

One such shopper reached out to The Consumerist, which published his comments. That shopper said he had only visited HomeDepot.com as a guest and then made the in-store purchase of a drill months later.

“I can only conclude that Home Depot held my credit card information in one of their internal systems without my authorization, linked it to the e-mail address I used on the one-time purchase without my authorization, and is now watching what I buy in their store using the card so that I can build up their rating database and presumably so they can target their advertising to me,” the story quoted the anonymous shopper as saying.

To be precise, Home Depot does not, of course, store payment-card data. It converts that data to a character string and then looks for a match with that string when it processes a card in-store.

Home Depot wouldn’t say exactly how it converts the numbers, but there are only a few likely ways. PCI Columnist—and QSA Extraordinaire—Walter Conway said Home Depot could be using strong encryption or tokenization, or it might simply be comparing a non-reversible one-way hash. All approaches, he said, would enable the chain to track shoppers across channels. And, depending on the implementation, that is perfectly acceptable for PCI purposes.

Steve Sommers, a senior VP for applications development at security vendor Shift4, said his guess is that this is likely being done with a multi-use token, something Sommers argues is less than ideal.

Multi-use tokens came into being “when PCI SSC bastardized the tokenization definition and allowed for tokens to be mathematically derived from the PAN, either via encryption or some hash algorithm. Now with this method, the same card number would normally generate the same token. This would greatly reduce the effectiveness of the tokens to protect the data, but would give the merchant the tracking ability described. This is probably the method the merchant is relying on. While Shift4 adopted multi-use tokens, we do not believe that a token mathematically based on the PAN is secure, because it could be susceptible to rainbow attacks if the hash salt or key is ever compromised.”