Evan Schuman's StorefrontBacktalk

Security vendors are always fond of releasing the most extreme estimates of data breach costs, to justify an ROI argument for retailers paying them a lot of money. But retailers can contact consumers in very cost-effective ways and can often get communication help from others involved, such as the card brands and the processing bank.Read more...

About 37 percent of those largest retailers now accept at least one of the three largest alternative payment services. Only six of those retailers—Toys R Us, Sports Authority, Rite Aid, Petsmart, NHL and Dick's Sporting Goods—accept all three forms.Read more...

Sears and OfficeMax join TJX and McDonald's as having settled—or agreed to settle—their roles by agreeing to license the technology from Card Activation Technologies.Read more...

Microsoft will use the show to roll out its version of smartphone-readable 2-D barcodes. Redmond's approach with "Microsoft Tag" brings multiple colors into those barcodes, which allows them to be 50 percent smaller but still more easily and reliably read than today's 2-D barcodes, said Kevin Kerr, Microsoft's worldwide retail technology strategist. Other rollouts will include virtual makeup mirrors, virtual customized music creation and wireless debit devices.Read more...

Most of the site problems were minor in scope, but a few were long and probably costly. When it came to duration, none appeared to match the outage that hit the Publix Super Markets site on January 2.Read more...

There will be 50 fewer companies exhibiting this year, bringing last year's 580 exhibitors down to 530 this year.

On the vendor side, the numbers are actually a lot worse as exhibitors will be bringing some 700 fewer employees to help out. "We will be feeling the effects of the economy," said NRF VP Susan Newman.Read more...

But, GuestView Columnist David Taylor argues, there is another option that offers the potential to let someone else "do the dirty work" of PCI: Using payment gateways to mask non-compliant payment applications. Be forewarned: That's a very dangerous game. Read more...

Can an RFID chip be made uncloneable? No, but one Palo Alto vendor is arguing that it’s gotten quite close.

The vendor’s position, according to this well-done NetworkWorld story, is to “create multiple PKI-like key pairs based on integrated circuit impurities so that a given chip will always respond to a particular stimulus in a predictable way. And, because it’s the impurities in the silicon that cause this effect, it’s impossible to create a chip that will respond to a specific stimulus.” For one possible future of RFID, it’s worth a read.…

If you’re going to be at the NRF show in Manhattan next week, please drop by our Monday (Jan. 12) panel on security, featuring security execs from Reitmans, Beall’s and Big Lots, along with the former head of the U.S. Justice Department’s computer crime and StorefrontBacktalk’s own David Taylor. Evan Schuman will moderate.

The panel discussion, scheduled to start at 4:30 PM in Hall A, Room 1A, will open with a question about whether retailers, in this bad a recession, will need to rethink how to fund—and possibly whether to fund—PCI efforts. But the conversation will also cover non-IT security issues, such as crowd control, looking at very different Black Friday disasters involving Wal-Mart and Best Buy, plus loss prevention strategies.…

But questions quickly surfaced. For example, retailers have specific systems designed to catch multiple identical transactions from the same account. Why, then, didn't the Macy's system catch anything until some accounts were charged two and even three times? One Macy's manager familiar with the incident said it involved a Macy's payment processor and that the connection with the processor "was experiencing a slowdown that day due to traffic or systems issues. When that slowdown occurred, that's when the double charges occurred." Read more...

A financial report on the troubles found last year with major department stores places the blame for the revenue drop not on the economy but on chains that are “increasingly out of touch.” As detailed in this comprehensive Media Post story, the Cavallino Capital report found that only 6 percent of consumers did most of their shopping in stores like Macy’s, JC Penney or Dillard’s this year, compared with 15 percent in 2000.

“The problem is that these stores have relied too heavily on the things shoppers care least about, like coupons, loyalty programs, delayed payments and contests,” said Cavallino Chairman John Rittenhouse. “And they’ve neglected the basic rules, the things consumers say always matter, like having the merchandise they expect in stock, having helpful people staffing the store and a customer-friendly return policy.”…

Both trends come from the Hitwise post-holiday report, and both could support radically different conclusions. For example, consider the drop in affluent consumer site visits.Read more...

The thought that eBay's purchase of Bill Me Later would kill the Amazon deal is hardly new, with one party involved with the firms saying back in October that "the Amazon and Bill Me Later relationship is dying if not dead already." But the history of Amazon and Bill Me Later dates back a year, when Amazon announced in December 2007 that it would accept Bill Me Later as a payment option at some point in the future.Read more...

When ComScore expanded that timeframe to look at almost the full fourth quarter—which it defines as running from October 1 to December 28—the numbers actually got slightly worse, with identical year-to-year quarter comparisons with 2007 showing a 4 percent drop, to $36.8 billion. The top-ranked sites saw some significant increases, and decreases, in their unique visitor numbers. For the full list, pleaseRead more...

For years, Google has given its Google Checkout service to retailers for free, as long as they bought ads on Google. Alas, no more. Explained one Google manager: “Why have it as a loss leader if it’s doing OK? We saw very healthy results after we decided to charge for the service.”

The change of heart—covered quite well in this Investor’s Business Daily story—is part of an overall cost-cutting program at Google. “They are cutting back on things like their free cafeteria hours, subsidies of their on-site daycare, so trimming subsidies to their merchant partners is no doubt part of that belt tightening too,” Forrester Research Analyst Sucharita Mulpuru was quoted as saying.…

The Gap's Web site has one of the lowest user satisfaction scores on the "2008 Holiday Top 40 Retail Satisfaction Index," a survey-based report from ForeSee Results. ForeSee President and CEO Larry Freed blamed the low score on diminished user perception due to well-intentioned changes to Gap.com. Read more...

The culprit is the apparent success of many scan-packing/EANway rollouts, which has made it difficult to justify paying for the transition. Sound familiar?Read more...

As retailers debate how much they truly want to embrace mobile payment efforts, the Mercator Advisory Group is reporting that the tide will soon become unavoidable.

Mercator is now forecasting that smartphone-based remote mobile payments will reach $389 million in 2009, $1.7 billion in 2011 and $8.6 billion in 2014.…

There's no question the global data sync effort, in which manufacturers share product information with sellers through GDSN-certified "data pools," is gaining ground. But not all industry observers are sold on GDSN. For example, Retail Systems Research Managing Partner Paula Rosenblum said she remains skeptical about the true ROI of the practice.Read more...

The science and technology of it is really not that far-fetched. The fact that so many consumers—especially younger consumers—today share so many of their thoughts and private moments in so many public settings alone would allow even a casual observer to learn quite a bit about someone. But it gets far worse.Read more...

The details of how he did it aside, the concept is interesting in potential future retail uses, assuming that the per-tag price can be brought down low enough. For a grocery store's greeting card section, what if the store—and its suppliers—could know which cards were picked up and which ones were opened?Read more...

A handful of retailers—including 1-800-Flowers, Jos. A. Bank, Planet Hollywood and Overstock.com but excluding any of the top 100 brick-and-mortar chains—went along for the ride, pledging discounts to be beamed to T-Mobile customers using Chase Visa and debit cards.Read more...

Having suffered outages during Cyber Monday, J.Crew again became unavailable—to at least some prospective customers—for an extended period on Wednesday (Dec. 17). In doing so, J.Crew's site joined a group of Web properties that continued having a tough time this holiday season, including OfficeMax, Blackwell and Sephora.Read more...

But—you just knew there was going to be a but—a new Gartner report predicts that it may not be all happy news. As IT spending is slightly insolated and spending in other departments gets gutted, "IT spend as a percentage of retail revenue will go up," said Gartner Research VP Hung LeHong. "In some ways, that will backfire on the IT group" as they'll then become a bigger target for cost-cutters. Read more...

Office Max topped IHL's list of consumer electronics retailers in terms of lost sales due to out-of-stocks, locked cases (with no help in sight) or staffer inability to find stuff supposedly in inventory. But Office Max certainly wasn't alone in the research company's hall of shame, with Office Depot and Circuit City keeping it company.Read more...