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Target's holiday hijacked by hack

Thursday, December 19, 2013 - 02:09

Dec. 19 - Target's security breach came at the worst possible time- taking its focus away from the final holiday sales push- and into a damage control mode. Bobbi Rebell reports.

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After hackers stole data from up to 40 million customers credit and debit cards - Target is in damage control mode- overshadowing its final sales push ahead of Christmas. Morningstar's Ken Perkins: SOUNDBITE: KEN PERKINS, EQUITY ANALYST, MORNINGSTAR (ENGLISH) SAYING: "This is not what the company was hoping for. This is a time where Christmas is always important, the holiday season, and for retailers and especially this year since there are fewer days this year than last year. And so every day counts that much more this year, and I think rather than focus on getting customers in the door the company is on damage control mode at this point." And the damage could be tremendous. In terms of the speed at which the hackers were able to access large numbers of credit cards- the data theft was unprecedented. The operation was carried out over just 19 days starting the day before Thanksgiving. While they discovered the breach on Sunday- it was not until Thursday that Target warned customers in an alert on its website that the criminals had stolen names, payment card numbers, expiration dates and security codes. And investigators still don't know how it was carried out- and according to a person familiar with the investigation- Target did not detect the attack on its own. Perhaps most vulnerable says Perkins- is Target's REDcard private label 5 percent discount debit and credit cards. REDcards were used in 20 percent of sales last month- part of its big push for loyalty. SOUNDBITE: KEN PERKINS, EQUITY ANALYST, MORNINGSTAR (ENGLISH) SAYING: "Target's long term strategy is to try to increase the penetration of its REDcard cardholders and so with this sort of breach it could take the marginal customer out of consideration for those looking to get a REDcard and ultimately purchase more with Target and in retail it's so competitive that customer loyalty is important and if Target loses that I think achieving the company's long term objectives could be even more difficult." Beyond lost sales- Target could also be on the hook for any fraud on the cards- because card issuers can fine Target for non-compliance with payment card security standards. Target's online business was not affected.

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Target's holiday hijacked by hack

Thursday, December 19, 2013 - 02:09