Evan Schuman's StorefrontBacktalk

Making it unanimous thus far, two federal judges have denied key motions in the lawsuits against retailers accused of violating federal law by printing prohibited information on credit card receipts. This is on top of a third federal judge making a similar ruling earlier this month.

Unless the U.S, Court of Appeals for the Ninth Circuit intervenes early next year, retailers who have been sued for printing federally-prohibited information on consumer credit card receipts will almost certainly get off the hook. This is because of decisions from two federal judges this week rejecting a critical class-action certification request from the consumers suing the retailers.

Here's a story that makes you wonder if the adults at eBay hadn't taken a few days off this week. The New York Times had this wonderful story about eBay's annual big convention for its largest sellers and how Google scheduled its own party at the event. Google thought this would be a good way to sell GoogleCheckout to people who might otherwise have gone for eBay's PayPal.

What Google forget is that eBay is a huge Google customer, not to mention deliciously vindictive.

In Europe, Visa officials are backing off of strict retail PCI demands, bowing to practicality. Visa described the original PCI deadlines as “unrealistic,” according to this ComputerWeekly story.

“Visa and MasterCard agree that risk mitigation is of prime importance and we expect this to be done immediately,” said Stanley Skogland, head of policy compliance at Visa Europe. “It does not mean that we do not expect all parts of the standard to be achieved, but we cannot expect miracles overnight.”

Added Simon Langley, head of PCI DSS at KPMG: “Visa and MasterCard agreed on the standard, but compliance has not been standardized.”…

As a possible consequence of its less-aggressive enforcement policy against shoplifters and cutbacks in security personnel, Wal-Mart is suffering an increase in theft, according to this Associated Press story. It cited a June 1 SEC filing that said the gross profit margin for its Wal-Mart Stores segment fell by 0.1 percentage points in the first quarter due in part to “higher inventory shrinkage,” according to the story. The piece discusses quite a few possible causes.…

Traditional arguments against item-level RFID use is that it only makes economic sense for products costing more than $100. But that assumes one-time use. With a trial with re-usable tags, Staples is throwing out all the old rules.

Staples in Canada started its trial this month at one of its Montreal stores, selectively tagging about 2,000 items representing some 300 SKUs out of the 7,500 SKUs in a typical location, said Joe Soares, director of process engineering for Staples and Business Depot. The tags themselves are higher-end active tags, which would typically cost Staples between $5 and $8 each. For the six-week trial, though, Soares said, "it's not costing us anything" because the costs are being picked up by partners, including Fujitsu and AbsoluteSky.

Shoe chain Aerosoles is one of many retailers trying to figure how far they can go in the multi-channel race.

In talking with lots of retail marketing and IT execs recently, there appears to be this growing realization—concession?—that a true multi-channel approach is a shock to the retail system. Indeed, even the word "multi-channel" sends the wrong message. Isn't that the opposite of the true goal? Perhaps the phrase "merged channels" is closer, with "multi-channel" usually a pseudonym for what Google's head of retailing has dubbed "multi-silo-ed."Read more...

Whether or not retailers can be legally punished for giving consumers receipts with full credit-card numbers has become much more uncertain, with a few recent critical—and conflicting—legal decisions.

A series of lawsuits against retailers for violating federal law by printing full credit card numbers on receipts is now facing unclear legal terrain, with two federal judges issuing contradictory rulings and the U.S. Supreme Court weighing in this week on a related case and giving some contradictory directions of its own.

Best Buy CIO Bob Willett is arguing that RFID can be a huge boost for retailers, but only if they can convince people they won’t abuse the data.

Willett, in a keynote address at the ERIexchange show in Boston this week, credited some RFID trials with already boosting sales in some isolated areas, according to this story in Computerworld. “Before I’m carried away in a box, I’d like to see checkouts gone from the store,” Willet said. “The technology is there to do it today with RFID. The first major retailer that can do it will be remembered forever and a day as a champion of the consumer.”…

New survey results released from the National Retail Federation show a 71 percent increase in retailers noticing organized retail crime activity. Is the news the increase or that it's being noticed?

Statistics are wonderful things, especially survey results. These thoughts come to mind as I look at a wonderful new survey from the National Retail Federation. The survey reported that 79 percent of the 99 retail execs surveyed in April said they had been a victim of organized retail crime in the prior 12 months.Read more...

When Hewlett-Packard this week unveiled its prototype Retail Store Assistant—a kiosk that offers customized individualized promotions transmitted directly to a customer's smartphone—it took a business pragmatic position in the personal shopper battle.

There's little debate that customized shopping—taking the CRM customer-specific data one major step beyond the minimally effective coupons at the end of checkout—is almost certainly going to be a key in-store technology over the next few years, especially with grocers. But the form that this customized shopping will take is a key debate.Read more...

Retailers globally will likely spend $120 billion on IT this year, a figure that--as a percentage--is actually low compared with other industries, according to information published Tuesday by the IHL Consulting Group.

"Retailers individually spend well below other industries, about one-third of the amount per revenue dollar compared to financial services and insurance," said IHL President Greg Buzek.

Connecticut state legislators have backed off a plan–pushed by bank lobbyists and opposed by retail groups–to make retailers who are found to be at fault in data security efforts pay all bank costs, according to this fascinating Hartford Business Journal story.

Despite lobbyist arguments that TJX was merely a victim of the cyber thieves who orchestrated the data heist, Connecticut state Sen. Bob Duff wasn’t buying it. “I still blame TJX. They should be blamed, they should be sued, they should be fined,” he said.

But Duff did yield to the argument that such a bill would financially desrtroy small retailers and ultimately backed off. The Hartford Business Journal story gives us a great–and rare–peek behind the scenes at one state’s legislative maneuverings.…

The Staples Businesss Depot, which bills itself as Canada’s largest supplier of office supplies, is launching an RFID trial to test realtime inventory tracking, the chain announced Thursday.

The retailer said it plans to “tag thousands of items that will be dynamically tracked in real-time–at long range– from entering into store inventory, to store shelves, through to completion of the sales transaction,” according to a statement. “In addressing privacy concerns, the RFID tags are not concealed on the items and are re-usable. They are physically detached when the item is sold to the customer at a Staples Business Depot store.”…

In a psychologically fascinating "grass is always greener on the other side of the firewall" scenario, states see the industry's PCI as the perfect security standard. And retail CIOs are salivating for Sarbanes-Oxley-like controls.

This comes to mind as we look at two aspects of the PCI world this week. Recent reports about PCI have raised questions about how many retailers are truly PCI certified as well as problems with PCI administration itself, including conflicts of interest, inconsistent enforcement and retail confusion. But several states, including Minnesota and Texas, want to make PCI their state's legal requirement for retailers operating within their borders.

After months of investigation, the state of Connecticut sued Best Buy on Thursday and accused the chain of tricking customers with two identical-looking web sites in its stores, the only difference being one had higher prices.

"Best Buy treated its customers like suckers, not patrons to be prized," said Connecticut Attorney General Richard Blumenthal. "Best Buy gave consumers the worst deal: a bait-and-switch-plus scheme luring consumers into stores with promised online discounts, only to charge higher in-store prices."

This week, Minnesota became the first state to mandate PCI requirements for retailers who want to be protected from banks and credit unions for data breach losses.

The Plastic Card Security Act kicks in in August, according to this St. Paul Pioneer Press story. Minnesota is not likely to be the last state to put its weight behind PCI, with Texas, Massachusetts and Nevada–among others–heading down similar paths.

“It’s a credit-card world. If you’re in business in this day and age, you have to be able to accept credit-card and debit-card transactions,” Buzz Anderson of the Minnesota Retailers Association, which opposed the bill and argued for pushing back the penalty deadline, told the newspaper. The penalties from Visa and MasterCard can run to hundreds of thousands of dollars, he added, and act as a significant deterrent. Those penalties, he said, “would drive most small businesses out of business.”…

Industry efforts to set precise security standards have frustrated proponents with a patchwork of contradictory interpretations, auditors selling the services they're critiquing and frustrated retailers who can't jump through infinite hoops forever.

Said David King, CIO of Regal Cinemas: "This used to be the climate that we all lived with before Enron. (Accounting firms) not only did the audits, they also did taxes and evaluated risks. One division created revenue for another division."

The $5.3 billion European chain Woolworths has switched CIOs, with CIO Stephen Bradley resigning “to pursue consulting and charity work,” according to this interesting ZDNet Australia story.

Woolworths has promoted its GM of IT, Daniel Beecham, to the CIO slot, promoting the 12-year company veteran on May 14. His first priority, the story said, will be to complete a new POS rollout across the chain.…

When the Texas assembly this month unaninously approved a bill mandating PCI compliance, it set in motion a potentially interesting retail security development.

The state bill–which still needs the blessing of the Texas state senate and the Texas governor-doesn’t directly impose penalties on non-compliant retailers, but it does shield compliant merchants from banks trying to collect damages, a protection that is explicitly missing for those can’t prove PCI compliance.

If other states take their cue from Texas, it would cerainly give additional teeth for PCI compliance programs, but it wouldn’t necessarily solve the problems that is causing so many retailers to not comply. It’s also not clear how national retailers would be impacted. Could banks simply sue somewhere outside of Texas? But if other states start to adopt, this could get very interesting very quickly.…

As mobile computing devices start invading in-store operations—both what customers bring into the stores and what the stores will hand to those customers—the very nature of in-store networking is likely to undergo a dramatic change.

Consider this scenario: A customer walks into a favorite retail outlet and grabs a handheld shopping helper from a rack near the entrance. The handheld unit can communicate with RFID-enabled smart-shelves and their tagged item-level cousins, as well as signal digital signage to change based on the CRM profile of the approaching customer.Read more...

If you're going to be in the Boston area June 5th and 6th, would love to hook up with some of you at the ERIexchange show at The Boston Convention Center.

That show is actually shaping up to be quite significant, with keynotes from BestBuy CIO Bob Willett, CircuitCity CIO Bill McCorey and Metro Group managing director Gerd Wolfram, among other notables.Read more...

Amazon is truly trying to make a go of the online grocery segment, and the Subscribe & Save feature it introduced on Tuesday is a good example of how. But the new program—which promises customers automatic delivery of grocery products with discounts of 15 percent and free shipping—is also an illustration of Amazon's initial weakness.

Several E-Commerce sites have tried to make a profit with grocery online, with Priceline probably the most notorious at making a big noise and a big loss. One of the few that seems to be making some serious headway is Peapod, which has the pedigree to do grocery right: It's owned by Stop & Shop.

TJX reported Tuesday that, in the three months leading up to April 28, it spent another $12 million dealing with the data breach the company announced in January. That's on top of $5 million TJX said it spend in the immediately previous three months to deal with the breach.

These figures, while not trivial, are dramatically below some industry projections of billion-plus-dollar losses. Customer loyalty—and apathy—is proving to be the key difference.Read more...

A new report has emerging technology–which it defines as electronic shelf labels, RFID and self-checkout terminals–shipments hitting $238 million by next year among European retailers. That’s about 52 percent more than the $157 million worth that the Venture Development Corporation (VDC) report estimated was shipped last year.

“While in the near term, traditional technologies will still dominate the market, these emerging technologies are expected to experience long-term growth due to technology refresh cycles, increasing end-user comfort levels (as a result of field-proven ROI with these technologies), and rapid price erosion in order to remain competitive,” said Andrew Nathanson, Director of VDC’s Automatic Identification and Data Collection Practice. “In order for the market to reach its full potential, retailers must view these emerging technologies as a mechanism for strategic pricing, inventory control and management, and a method in which to improve customers’ in-store experience — not merely a replacement for traditional technologies.”…

The ongoing lawsuits against major retailers for printing prohibited information on credit card receipts is allowed to proceed, with judge describing a key retail defense "absurd" and "bizarre."

U.S. District Judge Gary Allen Feess shot down the retailer's arguments that the law is confusingly worded. "Adidas attempts to obfuscate this plain meaning by advancing two 'competing' interpretations that border on the absurd. First, Adidas contends that the statute could be read to 'allow a business to print the credit card's expiration date on the receipt so long as no more than the last 5 digits of the card appear.' Second, Adidas argues it could be read so that the phrase 'last 5 digits' modifies both 'card number' and 'expiration date,' and thus that a business would be in compliance so long as it truncated the card number and printed only the last five digits of the expiration date. Each interpretation is bizarre," the judge wrote.