Evan Schuman's StorefrontBacktalk

It shouldn’t be much of a surprise that as Zero Hour approaches for holiday shoppers, the “have run out of time to think of anything clever” giftcard gift will suddenly dominate purchaser thoughts. The latest Web traffic figures from Hitwise–released on Tuesday–showed gift card searches soared 109 percent compared with the prior week. The top giftcard searches were, in sequence, Visa giftcard, AmericanExpress giftcard, iTunes giftcard, Rite Aid giftcard, the Simon Mall giftcard, the Citizen’s Bank giftcard, AAA Visa giftcard, MasterCard giftcards, Discover giftcard and the Home Depot giftcard.

A Hitwise statement attributed to GM Bill Tancer said “branded credit and charge gift cards dominated top searches as gift givers opted for the most flexibility for their gift recipients.” It’s more likely they dominated the searches because advertising made them top-of-mind for desperate consumers.

One other interesting detail from the Hitwise research were the top search terms (in the U.S., at least) that sent consumers to key retail sites: For eBay, that term was “iPod.” (Maybe there’s an afinity between brands that have this psychotic first lower-case and second upper-case lettering.) For Wal-Mart and BestBuy (and, for what it’s worth, Craig’s List), it’s Nintendo. For Target, the magic word has been Ugg boots and for Amazon, it’s Heelys.…

Consumer groups are making their lists and checking them twice, to see which store return policies are naughty or nice. It’s a delicate balancing act, with lax return policies are a huge source of fraud but strict return policies a major disincentive for purchases, especially gift purchases. The typical retail answer has been to “have a strict policy but don’t tell anyone.”

ConsumerWorld.org on Monday tried to shed a little light on those merchants, with Sears, CircuitCity and BestBuy on the naughty list for aggressive restocking fees, Amazon got a lump of coal for keeping as much as half of the purchase price for post-30-day returns and–my personal favorite–the site Grinched Buy.com’s “Easy Returns” policy for being more than 1,400 words long.

On the nice list–which included some of the same merchants–the site listed retailers who have liberalized their return policy into January but who inexplicably have not prominently announced this. The site did them the courtesy of announcing it for them. Moral of the story: If a retailer feels the need to keep a policy quiet, there’s a wonderful chance it’s not a policy it should have.…

Ever since the early days of the Web, marketers and E-Commerce folk have been mesmerized by Web traffic stats, fully believing that it would reveal all if they could only be sufficiently analyzed. The problem with that theory is that sophisticated analysis can only yield helpful information if the original data is accurate. If the original data is flawed, it's obvious that any resultant analysis will magnify those flaws.

How are Web stats flawed? Let's say that an E-Commerce execs wants to know the products that the site's audience is most attracted to, on the theory that the retailer will order more of those. The problem is that the placement of those items—and the length of time they are permitted on the site's most prominent pages—will likely have a huge impact.Read more...

In the ongoing saga of IBM’s patent infringement lawsuit against Amazon.com, Amazon struck back on Thursday, countersuing that it’s actually IBM that is violating patents.

The lawsuit is not subtly phrased: “IBM’s broad allegations of infringement amount to a claim that IBM invented the Internet. If IBM’s claims are believed, then not only must Amazon.com pay IBM, but everyone conducting electronic commerce over the World Wide Web (indeed, every Web site and potentially everyone who uses a Web browser to surf the Web) must pay IBM a toll for the right to do so.”

An IBM spokeswoman–Kendra Collins–said that Amazon’s counterclaims “ring hollow” and represent “nothing more than a transparent litigation ploy,” Collins said, because Amazon never brought up concerns over those patents during four years of cross-licensing discussions with IBM, according to a story in News.com.

In other E-Commerce legal action on Thursday, a lawsuit involving Yahoo and Google AdWords was dismissed, which raises the prospect of an out-of-court settlement.…

As E-Commerce matures, some of the assumptions about when and how shoppers shop need to be updated. Electronic payment vendor Cybersource analyzed some of its tracking data and found that office-time purchases is staying high, with the proliferation of residential broadband not making much of a dent.

Peaking at about 1 PM Pacific/4 PM Eastern, it’s feared that much late-afternoon keyboard tapping is not about pushing corporate profits, other than for retailers. Monday and Tuesdays are still the highest volume days, with weekend traffic at the bottom.

One key change. As E-Commerce grows, the traffic is remaining stronger at all hours, suggesting a morph into a 24-hour store. “The graphs are flattening—albeit with much higher numbers. Online shopping is not only getting bigger, it’s becoming more of a 24 hour phenomenon,” said Doug Schwegman, CyberSource director of market and customer intelligence.…

Earlier this month, giftcard exchange site Plastic Jungle was approached by a giftcard seller, offering two $200 Wal-Mart giftcards. Site CEO Tina Henson declined to buy the cards directly and instead suggested the seller use the site's auction area. The seller did and posted the cards for $125 and $135.

But when the site's authentication team checked on the cards, the Wal-Mart computer reported that the cards were valid and their value was intact, but they had just been purchased the day before. Thinking it was odd that someone would pay $400 for cards and then the next day be willing to sell them for $260, the CEO was contacted, but she shrugged and approved the sale anyway. The cards quickly sold.Read more...

In a strong concession that fines have not worked in getting retailers to comply with credit card security rules, Visa has switched course and has dedicated $20 million for a fund to reward retailers who actually comply with industry-accepted PCI rules by Aug. 31, 2007.

"This is absolutely a different tactic," said Jennifer Fischer, a director with Visa USA, which is the nation's largest payment system company. "We believe that incentives are necessary to achieve compliance. This is the first time a payment card brand has used positive incentives" to encourage security compliance.Read more...

Managed service company Verio on Tuesday introduced a new version of its small E-Commerce business shopping cart package, integrating payment processing services including PayPal, GoogleCheckout, eBay auction, Authorize.Net, WorldPay and FedEx realtime shipping quotes.

Like the earlier versions of the software, ShopSite 8.1 does not require any software to be installed on the retailers because it’s an outsourced service, which all computations happening on Verio servers.…

One credit card processor has issued a list of the characterics of typical fraudsters, including seeking accelerated delivery and purchasing four items at once.

Putting aside the fact that I typically engage in those suspect behaviors (but for honest reasons: I’m impatient and impulsive. I find maturity to be way overrated), the stats collected by Retail Decisions are rather interesting. Beyond the typical well-known fraudster profile elements—such as using free E-mail domains, living in densely populated areas and spending 2.5 times more than typical consumer—the group reported that 56 percent of fraudulent orders seek next-day or two-day delivery “whereas only nine percent of genuine customers ask for next day delivery online.

The company also reported that fraudsters often “bundle their purchases with an average of four items at a time (while) legitimate customers typically purchase one or two items per transaction.”…

With E-Commerce leaders getting more sophisticated in the ways of online fraud schemes, criminals are increasingly turning to auction forums. In those forums, the cyber crooks can use the site's prestige to add to their credibility while they sidestep that very same site's anti-fraud safeguards by selling directly to consumers.

Major auction sites—most notably EBay—often use community policing as a defense, where members who do not deliver honorably are given low ratings by fellow members, which theoretically warn members to avoid them. The fraudsters have tried countering by using a series of fake names, which are quickly abandoned once bad ratings are filed.Read more...

A new survey finds that teenagers plan to scale back on their purchases for others this holiday season, but the conclusions to draw from this trend are unclear. The online poll from Junior Achievement conducted during October and November interviewed 1,512 teens. (The JA people volunteered that participants were aged 13-19, which we pretty much figured out from the word “teen.”)

The survey found the lower-gift-spending from teens consistent with the last three JA surveys, which all found teens pledging to spend less than the prior year. The average amount the surveyed said they would spend for gifts was $75.

But there are a few concerns with the survey. First, it’s results fly in the face of several other national surveys, which have been predicting greater overall spending this year (although few have isolated the younger shopper so it may not be contradictory). The online survey–as opposed to one where a professional conducts the interview–is also notorious for giving skewed results. Lastly, it’s unclear if the surveyed teens plan on spending less overall or merely spending less on gifts for others. Does this suggest teen miserliness or selfishness? JA issued a statement interpreting the results as “a positive indication that (teens) are learning the importance of spending within their means.” Ahhhhhh, such optimism escapes me.…

As giftcards have soared in popularity in recent years—some $25 billion in giftcards are expected to sold this holiday season alone—the attempts to use them fraudulently have also soared. But some of the theft techniques being described to consumers are woefully out-of-date.

Does this mean that giftcards are secure financial tools for retailers and consumers? Not necessarily, but today's giftcards are certainly no less secure than traditional credit cards, with most retailers and issuers willing to be flexible with consumers who have been burned.Read more...

Survey results released Wednesday officially report what virtually all E-Commerce execs already knew: It doesn’t take very many bad online experiences to send a consumer to a rival site.

Web-traffic-tracking firm Gomez surveyed 1,173 people in the U.S. last month and found 24 percent will abandon a Web site after the first failed transaction, while most consumers—53 percent—will come back a second time, but will ditch the site after they are burned a second time. About 17 percent of consumers will come back a third time and it will take a third purchase failure to turn them away. (I want to get that last group into a poker game.)

The survey also suggested that 75 percent would immediately jump ship if a site loaded too slowly. Beyond the official reality disclaimer that consumers tend to tell surveyers what they want to tell the sites and not necessarily what they’ll actually do–and that Gomex charges retailers to track online performance so they may not be the most non-biased source for how quickly consumers will abandon slow sites–the results here are likely fair. But if an E-Commerce exec needs a survey to learn that customers will be unhappy if their transactions fail, that exec should probably rethink their dayjob.…

The problem of Internet accessibility for the visually-impaired is global, with a United Nations study finding only three leading web sites around the world--out of 100 studied--meeting the needs of "persons with disabilities," according to a U.N. statement issued Tuesday.Read more...

This is a different kind of blurb. Received an E-mail from a reader that I'd like to throw up to the group for advice. Any takers?

Here's what your fellow reader/fellow retailer wrote: "A customer places a order for a Laptop through our eStore. The order was rejected due to the store not being able to verify his billing address. The customer was upset and continued to contact us over a months time. As it turns out, he is from Costa Rica, in the US working."Read more...

Transaction processor Debitman officially changed its name this week to Tempo Payments, in part to support non-debit transactions but also to get away from a name that the CEO dubbed “fairly polarizing.”

What were the objections to the six-year-old name? “One was that it sounded like a superhero, which in some sense was the intention,” said CEO Mike Grossman, adding that it showed his company “struggling against the evils of interchange” but was also viewed in some circles as not serious. The other concern? Some apparently found the name sexist as “a lot of the cardholders are women.”

The core reason, though, was to signal to customers that the company wasn’t limited to handling debit networks, Grossman said.…

Reporting its best holiday season ever, Amazon.com is touting impressive sales figures, but what is behind most of those numbers is good old-fashioned delivering on promises. Sadly, that's a rare E-Commerce attribute. Amazon.com this week touted sales figures that make the 2006 holiday season its best, with one day (it was Dec. 11th, for those who track such trivia) ringing up more than 4 million items.Read more...

Just in time for the holidays, data thieves are giving big brightly-colored wrapped gifts to Visa, MasterCard and AmericanExpress every time they seal their steal.

The traditional credit card companies are fighting for their lives against a plethora of new alternatives, ranging from debit cards, non-credit-card contactless payment, cellphones, eCheck, PayPal and Bill Me Later, not to mention new-fangled hybrids that merge loyalty/CRM, giftcards, incentive coupons and POS card, such as a pilot at the Subway chain.Read more...

Despite consumer—and even some IT executive—beliefs that E-Commerce poses a much greater security risk than store-based point-of-sale systems, a new Gartner report concludes that the opposite is true.

Gartner is reporting that, by 2008, most attacks will be on physical point-of-sale systems and that even by 2009, only one out of three such systems will comply with current security standards. "Device vulnerabilities are often overlooked by enterprises, who tend to focus on enterprise servers and systems when securing their environments," wrote Gartner security analyst Avivah Litan, adding that data transmissions are also closely monitored and "typically ignored by many companies are the devices that hang off of corporate networks where data are either collected or output, particularly point-of-sale devices and printers located throughout enterprise systems."Read more...

In 2006 alone, retailers lost almost $2 billion because of consumer security fears, with about one-half of those losses ($913 million) coming from people who avoided sites that seemed to be less secure and the rest (about $1 billion) came from consumers who were too afraid to conduct E-Commerce business at all, according to a Gartner survey of 5,000 U.S. adults in August that the research firm will publish on Monday.

The report is startling in the sense that it confirms what many retailers have long feared. It's a frustrating problem because so many legitimate security defenses are invisible and the most visible security features—such as displaying a sign noting security standards compliance—does little to truly secure the site. Also, credit card purchases are overwhelmingly protected against theft so the true risk for consumers is quite small.Read more...

Millions of Canadian consumers who have moved to debit cards instead of credit cards learned that no payment system is perfect on Black Friday, when Royal Bank of Canada debit cards wend out of service for nearly three hours. The outage began around 4 p.m. EST and lasted until about 6:45 p.m. EST, Royal Bank spokeswoman Beja Rodeck told the Canada.com news service.

“All I can say is that it was a technical glitch and we’re looking at the root cause,” she said, adding that the problem was mostly at POS systems and did not impact the banks’s ATM network. Debit cards from Canada’s other big banks also appeared not to be affected, the news report said.…

Two key E-Commerce leaders—walmart.com and macys.com—found themselves shut out of the holiday sales rush for much of Friday, as their sites slowed to a crawl starting at about 4 AM in the East.

Keynote Systems, which tracks Web traffic, saw the Wal-Mart site "effectively down" from 4:30 AM Friday (East Coast time) until 2:30 PM Friday, said Ben Rushlo, a Keynote senior manager of competitive research. In the morning, Rushlo said, the site of the nation's largest retailer was eight times slower than normal, with many unable to even reach the homepage. "Every request was either completely down—with an error message—or unusually slow," he said. To read the full story,

The U.S. Census Bureau is reporting that brick-and-mortar retail sales are increasing four times more slowly than their online component. Specifically, E-Commerce sales for the third-quarter jumped 20.4 percent compared with last year’s identical quarter, while all retail sales jumped only 4.8 percent.

Perhaps more telling are the actual quarterly revenue figures, which give $27.5 billion in online revenue and almost $1 trillion ($991.7 billion) for all of retail.

Web sales may be comparitively small but E-Commerce is hardly a startup anymore. If it’s still bringing in this kind of growth after a dozen years, brick and mortar managers better take notice and get their customer service acts in gear.…

Is portable video not the killer app some have touted or is its time simply not yet here? Both questions are raised with new data–from the Nielsen Media Research people who, if nothing else, should really know television–suggesting that iPod users rarely use their video capabilities. This is true even of users of the Video iPod, who apparently liked the idea of portable video more than the real thing.

Nielsen found that less than one percent of accessed iPod content, including content from iTunes, was video. That number increased slightly–but just slightly– for Video iPod users, who opted for video about 2.2 percent of the time. According to The Hollywood Reporter, those numbers improved a bit when the question was changed from the number of items played to the number of minutes player, but not dramatically. “Even measured by duration of consumption, where 30- or 60-minute TV shows might seem to have a built-in advantage over three-minute songs, video comprises just 2 percent of total time spent using iPods or iTunes among iPod owners,” the news report said. “Video iPod users consume video 11 percent of the time.”

Does this mean that consumers are not interested in Web video? Not necessarily. First, laptop and PC screens are much more suitable to video, as least for first-generation efforts. Secondly, those numbers aren’t so bad for this new a media format. If it hasn’t materially changed in one year, then there may be trouble in videoland.…