Does Macy’s Really Not Know Where It’s Own POS Data Is?

Written by Evan Schuman
May 26th, 2009

In the ongoing saga of Macy’s versus the Los Angeles District Attorney’s office–where the DA is trying to subpoena POS and CRM data in connection with the sale of lead-tainted children’s jewelry so that impacted consumers can be notified—the latest twist is that Macy’s officials are saying that they don’t know what data they have, nor where it is.

According to officials involved in the case, Macy’s is saying that it has only been able to locate about 40 percent of the data involving some 2,900 tainted necklaces sold. (The next court hearing is slated for June 29.) Let’s set aside for the moment the possibility that Macy’s officials are being less than candid with the L.A. officials because they simply don’t want to reveal the data. If we assume that they are being absolutely candid, what does it say about their data management? Macy’s runs one of the most sophisticated IT shops anywhere in retail. They don’t have full access to their own CRM data, showing loyalty card purchases of the necklaces? Their Macy’s credit cards? They can’t search their own records for a particular product and which cards were used to make those purchases?

This raises some intriguing questions about how well most large retail POS and CRM systems can tie specific product purchases to specific customers. If they use their loyalty cards, it should be easy, but what if they don’t? PCI rules frown on a retailer retaining payment data longer than is necessary for transaction approval and return issues. But why not use that data and note the customer and the purchase, deleting the payment card and only retaining the customer name and the purchases? It could be used to wonderfully supplement CRM files and it could so under the consumer-friendly guise of being able to handle subsequent recalls.

This raises the always fun debate about the risk of retaining too much data. From an analytics perspective, the more data that is retained, the harder it becomes to find desired answers. From a legal perspective, the more data that is retained, the more info that may later have to be turned over to people suing you. (As a reporter, the guidance to destroy notes religiously after XX months was based on protecting sources and avoiding contempt of court penalties.)

From the IT perspective, the most cost-effective strategy is to retain only the data that you’ll actually use and crunch. That’s been an ongoing issue with some grocery chains and CRM programs. Given that most do little more than market basket analysis, paying for a CRM suite and retaining all of that data is absolutely wasted money. That said, it’s only wasted if the data isn’t crunched and put to good use. A chain has detailed product-to-customer data for a short time after transactions. Why not play with a token-like approach and marry the two—minus the payment card details—for later use? In short, is Macy’s being sloppy or strategically smart? Say what you will about Macy, but sloppy just doesn’t seem likely.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.