Will Warranty Enforcement Be Amazon Marketplace's Achilles' Heel?

When it comes to competing against Amazon, eBay or even Japan's Rakuten, one of the more challenging aspects is their third-party marketplaces, which give each a seemingly endless inventory at minimal risk. But the odds may be getting more even, as shoppers are starting to notice that some manufacturers are strictly enforcing their authorized reseller rules.

The immediate impact on shoppers is they may find that the expensive flat-screen TV, surround-sound speakers or refrigerator that looked like such a bargain on Amazon voids the warranty. The arguably-unrealistic expectation from consumer goods manufacturers—which sharply strengthens the hands of traditional e-tailers trying to fight against these third-party marketplaces—is that shoppers would not only notice the actual name of the merchant shipping the item, but would take the time to run that name on the manufacturer's site to see if they are truly an authorized reseller. Or they could just make the purchase from or and know for certain.

Top Stories


Want To Push Social Media? Have You Considered Using Your Stores?

January 10th, 2012
How's this for ironic? Retailers complain about how difficult it is to get shoppers to explore their social media efforts. And yet these same retailers have the almost undivided attention of these shoppers, often for hours every month, in an environment where the retailer has complete control of the surroundings, the store layout and the staff.

Almost all retail marketing efforts are based on the not-so-simple premise of getting people to purchase from them, either online or in person. The problem, pens Retail Columnist Todd Michaud, is likely a mesh of old-mentality thinking with a heavy dose of channel conflict.Read more...


Questions To Ask Your System Vendor Or Reseller

January 9th, 2012
The National Retail Federation's Big Show is next week, and the exhibition floor will be crowded with vendors offering retailers all types of software applications. As a public service, following is a list of questions all merchants should ask their POS system supplier or reseller based on one QSA's experience—namely the experience of PCI Columnist Walt Conway.

The good vendors will be able to address all these questions. The not-so-good ones will hand you a carrier bag or a pen instead. Read more...


Amazon’s Latest Patent: Guessing Religion Based On Giftwrap

January 4th, 2012
Amazon is floating the idea—via a patent filing—of launching a social service. Whether it would be a dating site or a potential business partner finder or just a more intelligent way of choosing who to hang with online, that's not clear.

But it is clear that Amazon is drooling over its vast CRM files and trying to figure out how much money it can make off them.Read more...


Wi-Fi Jamming: Your Stores Might Be The Problem, Not The Victim

January 4th, 2012

With so many consumer devices using the same wireless frequencies, it was bound to happen: Just before Christmas, a U.K. family in a village 50 miles southwest of London lost the use of all wireless devices—everything from key fobs for unlocking vehicles to a wireless thermostat and a digital shower—until the problem cleared up without explanation several days later. The BBC reported that faulty wireless equipment had caused similar incidents in the past, including a street in northern England of homes whose wireless was jammed in 2010 by handheld wireless devices used to take orders at a nearby restaurant.

Retailers get understandably worried about customers who might intentionally or unintentionally block store Wi-Fi that’s used for POS, associates’ handheld devices or free customer wireless service. But there’s a risk the other way, too—the newest Wi-Fi access points have a range of more than 200 feet indoors and 800 feet outdoors. That’s easily enough to jam neighboring stores’ Wi-Fi in a mall or interfere with homes near a standalone store. Unfortunately, there’s no easy way to know whether a store’s Wi-Fi is causing problems in the neighborhood—at least not until the FCC shows up to investigate a complaint.…


Best Buy’s Black Friday Cancellations Were “Bait-and-Switch Breach Of Contracts”

January 4th, 2012
Twas the night before Christmas, and up in the sky, was a jolly old Santa, sans gifts from Best Buy. Consumers who had bought particularly popular items on the Best Buy Web site on Black Friday expecting a visit from Santa instead received a virtual lump of coal from the retailer in the form of an E-mail informing them that no gift was coming.

Legal Columnist Mark Rasch wants to call it a bait-and-switch coupled with a breach of contract. The Uniform Commercial Code Article 2 for the sale of goods says that if there is an offer (PlayStation for $150!), an acceptance (click here!) and consideration (here's my credit card), then voila! A contract is formed. Read more...

Best Buy’s Black Friday Fiasco: When Were Bosses Told?

January 4th, 2012
Best Buy's Black Friday disaster is a huge deal precisely because it strikes at the very heart of E-Commerce fears. Namely, a consumer needs to feel confident that once an order is paid for, the product will absolutely be arriving shortly.

Although Best Buy has yet to spell out how this happened, the most likely scenario is that it was the so-called perfect storm of bad timing and possibly a quantity typo. How much of a delay happened while employees desperately tried to find the—unknown to them at that point—non-existent merchandise? In a $50 billion chain, news can travel upstream very slowly. When the news is bad, it travels upstream even more slowly.Read more...

Online Age-Verification Is No Longer Impossible. In Fact, It’s Required

January 4th, 2012
If detecting a customer's age is tricky when the customer is standing right in front of a kiosk, it's an even bigger problem for E-Commerce—one with hard legal consequences. Just after Christmas, a California father discovered his 14-year-old son had successfully ordered a water pipe and tobacco through Amazon—both illegal for minors to buy in California.

Age verification is something mail-order vendors have struggled with for years, and mostly given up on. But E-tailers can no longer use impossibility as an excuse. A recent federal law requires age-verification for tobacco sold online—and other age-controlled items can't be far behind.Read more...

Strange eBay Holiday Promotion Forced Shoppers To Engage In Unnatural Merged Channel Gymnastics

January 4th, 2012
A very bizarre eBay holiday promotion—which appears to have been in response to an almost-as-bizarre holiday promotion from Amazon—seemed to reverse conventional thinking about merged channel retailing. Instead of offering an incentive to shop online or in-store, the eBay incentive inexplicably required consumers to shop in both channels.

What started this holiday dogfight was an Amazon promotion, where it was offering a tiny discount (5 percent, with a ceiling of $5) for people who scanned barcodes and then purchased the item on Amazon. eBay's response was what it billed as a $10 in-store coupon, with three retailers: Toys "R" Us, Dick's Sporting Goods and Aéropostale.Read more...

Jell-O’s Dessert-Dispensing Age-Checking Kiosk Has Much Age-Restricted Potential

January 4th, 2012
When Kraft and Intel recently started showing off their age-detecting kiosk—a vending machine that dispenses Jell-O pudding and other desserts only to consumers it calculates are old enough to appreciate them—it was yet another in a long line of age-guessing systems. This one, though, has the potential to help retailers at least minimize some hassles from selling age-restricted products.

The age-detection part uses an optical sensor to consider the customer's face shape, along with distance measurements between the eyes, nose and ears.Read more...

P&G Backs Mobile Barcode Scan Approach, But Few Retailers Can Afford To Wait

January 4th, 2012
As the quantity of mobile POS interactions continues to soar—whether they're payments, coupons, CRM or something else—it's a rare retailer who has avoided the maddening inability of laser scanners to reliably grab data off a smartphone. P&G has moved into this argument, pushing a mobile scan approach based on using functionality within handset hardware or mobile operating systems.

The good news is that this approach, in theory, will be free to retailers, because it will not necessitate any store IT changes at all. The problem—and it's a deal-killer—is timing. With the mobile onslaught, quick is almost certainly going to trump free.Read more...

Apple Retail Mission: To Not Catch A Thief

January 4th, 2012
For many shoppers, the thief non-interference policy of many chains—especially when it involves firing a security guard who confronted a shoplifter—is baffling, even though it's truly—albeit non-intuitively—the right thing to do. Apple's approach to non-interference with thefts took on an especially surreal twist in Toronto late last month.

The store does have a policy: Don't take sides. If the customer wants to call police, let the police handle it. If police aren't called, treat everyone as a legitimate customer.Read more...

Protecting Call Centers, The PCI Way

January 3rd, 2012
The PCI Council used its December 2011 newsletter to remind merchants and service providers to control physical access to their call centers with video cameras or other devices. This recommendation is both sound security and good advice, and merchants everywhere should take it to heart. But as a QSA, PCI Columnist Walt Conway wishes the Council had done more than highlight just one particular sub-requirement.

There is more to protecting sensitive areas than installing video cameras. The second, and possibly thornier, concern for small and midsize merchants is how effective the reminder is likely to be when many of them mistakenly think they won't need to follow the advice.Read more...

Massive Subway Cyber Attack Ripped Into Weak Remote Access, Unencrypted Card Swipes

December 15th, 2011
The latest major retail data breach—involving 150 Subway locations and more than 50 other retailers, payment-card data from more than 80,000 shoppers and more than $3 million in bogus, but completed, transactions—is different than its predecessors for several reasons. Most notably, it appears to be the first major breach that was initially detected by a chain's own IT team.

The essence of the attacks' success leveraged two weaknesses: different unsecured remote-access packages used by various franchisees of Subway, which enabled easy Internet access to POS systems; and card swipes with minimal encryption. That meant key-capture software installed by the cyberthieves was able to grab data in the clear, as it was being swiped.Read more...

Don’t Rush To Mine Customer Reviews After Christmas. You Won’t Like What You Get

December 15th, 2011
A U.K. buying site that tracks the frequency of online customer reviews said on December 8 that retailers shouldn't expect a flood of product reviews on the run-up to Christmas. If the usual trends hold, there should be a lull in reviews between October and New Year's when the pace of review writing should pick up again, according to

As obvious as that seems (after all, how can a gift recipient review a gift until it's actually opened?), there may be a few more subtleties in when retailers can expect reviews—and what type of reviews they can expect.Read more...

Microsoft Gives Up On Tag

December 14th, 2011

Microsoft has effectively thrown in the towel for Microsoft Tag. On Tuesday (December 13), Microsoft announced that its Tag Reader smartphone app will now support QR codes and NFC. Officially that’s to make Tag Reader a one-stop app so users won’t have to worry about what reader to use with various tags. In practice, it’s curtains for Tag, the multicolored 2D barcode that Microsoft rolled out in January 2009 but that never really caught on (not that the more successful QR code has been a barn-burning success).

In a blog post, Microsoft said it now recommends NFC for retailers to “blend in beautifully,” QR to “grab their attention” and Tag to “raise curiosity”—presumably as in, “curiosity about who’s still interested in Microsoft Tag.”…

Amazon Price-Check Program’s Critics Have The Wrong Facts And The Wrong Attitude

December 14th, 2011
The Amazon price-check promotion is getting mercilessly blasted by authors, a U.S. Senator, a retail trade group and various others. The strangest part is that so many are getting the actual specifics of the Amazon program wrong.

Booksellers were up in arms about Amazon encouraging people to go into their local stores to buy on Amazon, despite the fact that consumers have been doing the same thing for as long as Amazon has been around and the fact that—to be nitpicky—books were excluded from the program. U.S. Senator Olympia J. Snowe (R.-Me.) issued a statement that "incentivizing consumers to spy on local shops is a bridge too far." That may be true, but the price-sharing part—the spying the senator is referencing—was excluded from any incentives.Read more...

Amazon Chutzpa: Do Unto Others What You Block

December 14th, 2011
When Amazon launched a one-day promotion this month aimed at getting its customers to go into brick-and-mortars and select items they wanted to buy at Amazon for a 5 percent discount, it was engaging in a deliciously ironic act.

Why? Because although what it was doing to those physical stores was likely legal, had those stores tried doing the same to Amazon, it would have been illegal, thanks to Amazon's posted policies. That policy phrasing is not even universal—or even common— among major E-tailers, pens Legal Columnist Mark Rasch.Read more...

Next StorefrontBacktalk Newsletter Will Be Published January 5th

December 14th, 2011

As is our tradition, StorefrontBacktalk shuts down for the last two weeks in December, due to the fact that y’all are far too busy (a) supporting the biggest selling weeks of the year until December 25th, (b) supporting the biggest returns-and-exchanges week of the year after December 25th and (c) closing the quarterly books until December 31st on what everyone hopes will be a bigger year than 2010.

That means our next regular weekly issue will arrive on January 5th, 2012. In the meantime, everything else will still be live (the Web sites, our Kindle version, our Twitter tweets, our mobile sites, etc.). And we’ll, as always, send out breaking news alerts if circumstances merit. …

Tokens Are Not The Same As Encryption. Honest

December 14th, 2011
It's now been four months since the PCI Council's guidance on tokenization, and people are still mixing up tokenization and encryption. They are also drawing incorrect parallels/inferences. Tokenization is not encryption. Trying to compare the two is not appropriate (or like comparing quarks to streetcars or your other favorite silly similes), and doing so can lead to mistakes in scoping PCI.

By the way, after much effort, PCI Columnist Walt Conway thinks he has finally found a real-world example of what a high-value token should be. Let's say shoppers want to use a payment card at a merchant, but they do not want that merchant to have their PAN, for whatever reason.Read more...

How Bad Are The Google Wallet Security Problems? Bad Enough

December 14th, 2011
Google Wallet isn't safe, at least not on the consumer end. That's the conclusion from security firm viaForensic's analysis released on Monday (Dec. 12). Yes, Google does a good job of blocking man-in-the-middle attacks. And having a PIN to open the wallet restores some security that Visa stripped out when it brought Chip-and-PIN to the U.S.

But Google also stores far too much customer information unencrypted on the phone—and if the phone is malware-infected or stolen, that data becomes far too easy for a thief to get at.Read more...

Interested In Advertising In StorefrontBacktalk In 2012?

December 12th, 2011

A message from our beloved business side: As the NRF Big Show happens next month, StorefrontBacktalk has a couple of last-minute slots for anyone wanting to communicate with NRF attendees. In mid-January, as our readers leave their postmortem holiday shopping meetings with the list of everything that went wrong, every feature management wants to add and a wishlist of products to make it all, it’s a nice time message.

We will also be adding several content channels next year—including several new weekly podcast series, more monthlies, events in addition to our usual weekly and monthly newsletters, and Web sites—and if your marketing people have any interest in getting involved, we now have new opportunities. Some of these new channels were specifically created to enable smaller vendors, with much more limited resources, into our community. If your marketers want to get your brand in the middle of these discussions, please drop us a note.…

Google And Verizon May Be Fighting Over Hardware, Not Mobile Wallets

December 8th, 2011
Why won't Verizon let users install Google Wallet on its soon-to-be-released Galaxy Nexus phone? It might be that Verizon is defending its ISIS partnership and the mobile wallet it will roll out sometime next year. But there's a simpler explanation: Only one mobile wallet can control the NFC Secure Element that stores payment-card data. If that's Google Wallet, then it can't be ISIS or any mobile-payments scheme that Verizon controls directly.

And although there's nothing to stop Verizon from adding the necessary hardware for lots of mobile wallets, that's not likely to happen unless Google opens its own corporate wallet.Read more...

EU Considering Data Breach/Privacy Rules With Fines Of Five Percent Of A Retailer’s Annual Revenue

December 8th, 2011
The European Union is considering new rules that will enable it to fine retailers as much as five percent of their annual revenue—yep, you read that right—for breaching EU privacy rules. The rules would also cover the protection of payment-card data.

If enacted with enforcement teeth, this could be huge. Not only are the threatened amounts (at least the ceiling) orders of magnitude beyond what major U.S. chains have been threatened with by card brands and processors, but the threats are far more realistic.Read more...

Google Trial Sends Home Depot Shoppers Away To Lowe’s

December 8th, 2011
A mobile vendor who was testing out the in-store Google Maps application this week at a Home Depot store in Florida discovered an unexpected result. While standing inside a Home Depot—which is one of a handful of Google partners on this project—and just feet away from the store's paint aisle, the tester called up the store's inside layout and asked the app where the paint aisle was.

The Home Depot partner app quickly responded: At the Lowe's store three blocks away. It's becoming clear that retailers need to be thinking about—and asking—a lot more questions about in-store maps and mobile navigation.Read more...

Amazon’s In-Store One-Day Mobile Experiment Worrying Retailers Needlessly

December 7th, 2011
A 26-hour (minus one minute) Amazon in-store mobile price-comparison experiment starting Friday (Dec. 9) is scaring a lot of retailers, who fear that allowing consumers to scan barcodes, compare prices and buy from within the store will hurt them. One retail lobbying group objects to Amazon taking advantage of its sales-tax-free status to make in-store sales.

Much of the concern may have little foundation, because Amazon has low-balled the incentives to such an extent that it's unclear if many consumers will even bother to try it.Read more...


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