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Best Buy’s Black Friday Fiasco: When Were Bosses Told?

January 4th, 2012

One possible explanation is a typo in the quantity of the items the supplier was providing to Best Buy. Unlike a typo in the price of an item—which could be flagged either by software or by a supervisor who thinks that 58 cents for a laptop seems low—an error in the input of quantity might not raise any red flags. And if the error makes the number higher and the typical quantity of this discounted special deal is particularly small, it might really not be obvious to anyone.

On top of that, have this all happen during an extremely busy Black Friday. The orders are processed and sent to fulfillment. When fulfillment can’t find the items to complete those orders, the department is likely told to set them aside and fill the orders that it can fill. That mess will be cleaned up later, a supervisor might say.

It might take quite some time before fulfillment finally suspects something strange is going on and someone calls purchasing to verify the numbers. Once the problem is discovered, there might be insufficient time to fix it.

But things get complicated at this point. What Best Buy did was to not only refund those orders but send giftcards to those customers—giftcards worth as much as the original purchase.

Here’s the confusion: Best Buy seems to be saying that it could have gotten more product, but not at the promised price. For double the price (well, almost double, given that a $400 Best Buy giftcard certainly costs Best Buy a lot less than $400), why didn’t the retailer invest that money and purchase the original items for those customers?

Best Buy stresses that this incident impacted fewer than one percent of its E-Commerce customers, so why not spend the money to make the problem go away?

One Best Buy spokesperson even told a reporter for a consumer daily that the chain says right on its Web site that it has the right to cancel any orders at any time for any reason. That’s a dangerous message to send to prospective customers.

The very next day, Best Buy issued a news release touting more special online deals and—we couldn’t make this up—included the following quote attributed to Best Buy Chief Marketing Officer Barry Judge: “In these final days of holiday shopping, Best Buy brings peace of mind to customers searching for the perfect gift at a great value.” Last minute explanation-less gift cancellations are hardly the stuff of customer peace of mind.


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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...

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