Evan Schuman's StorefrontBacktalk

PayPal's outage again spotlights the problem of backup strategies that simply don't. It's painfully reminiscent of recent datacenter fiascos at American Eagle Outfitters and Wal-Mart. And while some major retailers were kept apprised of the progress of PayPal's outage and disabled PayPal payment functionality on their E-Commerce sites to minimize problems, most of PayPal's customers got the word late or not at all. Apparently there was no effective plan for dealing with that side of the outage, either.Read more...

On the surface, the differences between the two versions do not appear significant. So why would you not want to validate using the latest and greatest? Looking deeper, however, shows that one change in Version 2.0 could have an impact on your decision. And that change, says PCI Columnist Walt Conway, is the new guidance on scoping.Read more...

Amazon has dressed up that court ruling as a big victory for customer privacy. But now Amazon will have to cough up the customer data, and North Carolina will begin to go after Amazon's North Carolina customers to collect the taxes due—and you can bet that the revenuers will mention Amazon's name when the tax bills go out. Amazon is already collecting sales taxes in five states where it has physical operations. Therefore, a few more court victories like this one, and Amazon might be better off just collecting all state sales taxes itself.Read more...

The story behind the numbers also gets into some definitional questions. Consider a 19-year-old who poses a question to a Facebook forum about which car to buy. Does that consumer think of such an inquiry as mobile research or merely talking with friends? Retailers are likely to see it as quintessential M-Commerce research, but the consumer—who is answering these survey questions—is more likely to see it as hanging with friends and say "no," said Pam Goodfellow, a senior analyst with Big Research, which managed the NRF survey.Read more...

The short version: You can expect to spend more time at the beginning of your assessment, and some of the approaches and technologies you may recently have put in place may no longer make the grade. Read more...

That's why the announcement from Kindle that it will, "later this year," introduce "lending for Kindle" is so potentially significant. The concept is a direct steal from the physical world. A person who purchases an e-book can loan someone a copy of that book, with restrictions. If a consumer today buys a book from a physical store, that consumer owns that book and is therefore free to sell it to someone else, for whatever price the market will bear. Instead of prohibiting that in the digital world, why not encourage it, albeit for a cut.Read more...

Let's look at what the world's largest E-tailer said. Amazon—and tons of retailers—has made lots of ports to new platforms. You create a dedicated app and it has your brand on it. Or you craft a version of your product to run on the new platform. But Amazon, owner of one of the strongest brands in retail today, opted to give its iPad version an entirely new name: Windowshop.Read more...

We're coming to an inflection point that will have some scary repercussions for the mobile industry. Until recently, criminals have had very little incentive to attack the mobile channel. But this is changing, and fast. There are three reasons for this shift.Read more...

Background in "store systems would also be interesting" for this position, said DSW CIO Carlos Cherubin. "This is a new position, born of the fact that our organization is growing," he said, referring to its current 210-person IT operation (internal IT staff of 170 plus about 40 IT contractors). "We're a 200-person shop day-to-day," Cherubin said.Read more...

Starbucks, which is one of the very few national retailers running any kind of a mobile payment trial, has sharply expanded its initial West Coast run, announcing this week a planned move into its almost 300 stores in New York City and parts of Long Island. (Target, another M-Commerce-interested retailer, has already been accepting the mobile payments at the Starbucks in their stores.)

One of the reasons for the urban move is a discovery from the 16-store test in Seattle and Northern California that “dense office building environments” worked out much better than “more neighborhoody environments,” said Chuck Davidson, the category manager for innovation on the Starbucks Card team. He theorized that word of mouth in those office parks was the cause (and the lunch crowd, as opposed to the suburban tendency to solely do morning coffee). And even though the barcode scans are taken directly from the mobile device screens, Davidson said testers found few problems with glare that other chains have experienced. He credited high-end 2D imagers and asking that customers turn their phones’ brightness to full. He added that the chain has yet to experience any fraud in the trial. True, but the Big Apple may test how long that will be the case.…

One of the most frustrating truths in retail security is that, by definition, it has no meaningful return on investment—at least not in the sense that CFOs and board members view ROI. There’s no chance at improving revenue or profit; at best, it’s risk avoidance. Even that’s dicey. If security is in place, how do you really know that you would have been breached otherwise?

One way to squeeze out ROI: Flip an unsexy security expense like PCI by upgrading to a POS system that also moves lines faster or displays ads while customers are waiting. Or what about training cashiers to encourage debit-card users to key in their PIN—thus improving security and reducing the cost of card transactions at the same time? We explore these and other ideas in the latest StorefrontBacktalk podcast on security. To listen to the podcast, please click here.…

In a recent financial statement (it involved declaring a quarterly dividend), Visa CEO Joseph Saunders made an interesting comment. Well, it should prove interesting to retailers who are steaming about their latest interchange fight. Said the CEO: “This is the second consecutive year that the board has authorized a meaningful increase in Visa’s dividend, demonstrating confidence in our business and our commitment to returning excess cash to shareholders.”

Excess cash? Yeah, that’s exactly the phrase you want to publicly use with retailers who are already screaming about charges that they see as profiteering. If you feel the need to return excess cash, why not return it to the customers you overcharged in the first place? Just a thought.…

Like most media outlets these days, we here at StorefrontBacktalk get deluged with PR people pitching stories about their clients. But also like most media outlets, very few of those pitches are appropriate for us.

To help, we have crafted a page with our best-kept secrets about how to successfully pitch a story to us. It starts with understanding our audience and how we try and differentiate our stories. (Note: This particular blurb is a horrible example of what our typical stories are like, but it’s a pretty good example of an irony, so at least we have that.) So for PR professionals only: Please check out our PR tip cheat sheet, and your chances of getting a story placed will soar.…

That poses a problem. With those rich interactive features, it's simply a way to get additional information about a product. But it doesn't meaningfully go beyond 2D barcodes and NFC efforts. Some chains are frightened to even experiment with systems that are not only IT intrusive (they need to integrate deeply into many back-office programs) but may raise privacy issues. Without such trials, though, retailers have no way of assessing whether the privacy concerns are real or simply imagined. Consumers might love the advantages, if given a chance to try them.Read more...

It's always a challenge to get employees to correctly use a computer system that stops them from selling—even when it's enforcing the law. That's the kind of conflict retailers increasingly face in cases where, for example, loyalty programs clash with privacy concerns. No manager is going to get a bonus for pushing customers away. As such, it may fall to IT to make sure employees don't cut corners, especially when those shortcuts could result in an expensive legal bill. Trouble is, that can be an impossible task.Read more...

The purpose of the questions often is to locate the "unknown unknowns" or to make sure contingencies are addressed. As such, the questions may sound obvious or even silly at first—at least until they succeed in actually uncovering a problem you didn't know you had. Read more...

On Tuesday (Oct. 19), Wal-Mart agreed to pay the State of New Jersey $775,000 to settle charges that it sold infant formula and non-prescription drugs beyond their marked expiration dates and that items on sale scanned at incorrect prices. The chain also agreed to try really hard to not get caught doing it any more.

Even though Wal-Mart is one of the few businesses that could honestly consider a $775K payment a nuisance settlement (one where its legal and related costs would far outdistance the cost of just writing the darn check), it underscores the ROI value of automating price-check and expiration dates This is one of the areas where the upcoming G2 barcodes should help: By adding the expiration date to a product’s data, expired items will be caught at the POS. Until then, consider the size of this fine—and the fact that it covers only one state, with 49 more in the U.S. alone. (Note: Target was also a defendant in this action, but it settled last year for a mere $375,000.)…

The problem for alternative payments isn't just doing the things that conventional payment cards do at lower cost. It's also breaking through the lack of familiarity that customers, banks and even retailers have with new payment approaches. Visa and MasterCard remain in the POS driver’s seat because of their network, but also because they're a known quantity. And as much as retailers want cheaper alternatives, the Bling Nation/Fifth Third deal illustrates how much of a challenge it is to buck the current infrastructure.Read more...

The action began last Thursday (Oct. 7) at the Wal-Mart in Alliance, Ohio, when two sisters from Cleveland—Katurah and Staniel Petty—visited. The pair went to the back of the store, selected two higher priced pieces of software and "concealed them behind a large purse in the [shopping] basket," said Alliance Police Lt. Kevin Moore, who later saw the pair's activity on the store's video system. The Pettys then tried exiting the store without paying and the theft-detection system was activated. (Stick with me on this one. It gets a lot better.)Read more...

PCI Columnist Walter Conway asks: Can this powerful emerging technique simplify retailers' PCI compliance to the point of it being a minor annoyance? That seems to be one of point-to-point encryption's promises, but how much it and the others are realized depends greatly on each retailer's internal processes and requirements. Read more...

Todd Ablowitz, payment consultant and president of the Double Diamond Group, suggests that PayPal's check-capture-smartphone move—which puts it following financial old-timers including Chase Manhattan and USAA—makes it not such an upstart after all.Read more...

The reality is that there are many firms in the tokenization space today, and you cannot count on all of them being around forever. Some will change business focus, go out of business or be acquired. Because there are no standards for tokens across vendors, transferring to another vendor could be difficult, pens PCI Columnist Walt Conway. That means retail CIOs need to address what to do if (when?) the unforeseen happens.Read more...

The glitch happened on Oct. 1, but the ill-fated charges were rung up the day before, as is customary. "Settlement processing was delayed by several hours on Friday due to a technical issue. As a result, some cardholders saw duplicate charges and some merchants received duplicate funding for those transactions," said a statement issued by First Data.Read more...

That's reason to worry. Physical tampering with PIN pads is typically local because it's labor intensive. Thieves have to physically modify or replace the card terminals, which is why hacked terminals are usually found in a local cluster. This time there are clusters, all right—10 of them, stretching from Illinois to Georgia. Meanwhile, part of what made this $70 billion global grocery chain so successful could be playing a key role in making it a cyberthief target today: The scarcity of employees in the store.Read more...

We are witnessing a race that will determine the success or failure of many Quick Service Restaurants' rewards programs, pens Franchisee Columnist Todd Michaud. On one side, we have the socially enabled "check-in" applications like Foursquare and GoWalla, where friends share their location and compete to earn badges. On the other side, we have brands trying to offer perks through these applications. Today, these perks are inconsistent, in terms of both which locations offer them and the value they provide to customers. If the industry as a whole doesn't start to provide consistent value to the consumer through these new tools, I think the social aspect (the game) may pass by as nothing more than a fad, leaving brands right where they started.Read more...