Consumers Less Concerned About Retail Hacks

A little over a year ago, when Target was breached, many predicted the coming retail apocalypse wherein consumers would simply be too terrified by security concerns to ever really shop with gusto again.  It looks like that particular end-game scenario has not panned out.

Target posted $17.73 billion in revenue on Wednesday,  knocking down the Wall Street consensus forecast by a notable $17 million.  Home Depot, which recently stole Target's crown as the most breached (by size and scope of data stolen) retailer in America,  saw sales in the U.S. climb by 5.8 percent in the third quarter.

“We believe the breach is firmly behind [Home Depot] with momentum heading into 4Q,” wrote J.P. Morgan analyst Christophers Horvers according to reports.

As it turns out, the net effect of a breach of 56 million credit card accounts and  53 million email addresses were stolen was a brief spike in traffic at Home Depot’s chief competitor, Lowe’s.

 “In the end, the market’s behaving completely rationally,” says Avivah Litan, a security analyst for Gartner. “It’s still a pain in the neck for everyone, but there’s very little actual fraud committed as a result of these breaches.”

Litan says that hackers like those who pilfered credit card numbers at Target and Home Depot typically only have about a month to actually use their ill-gotten gains before banks catch on.  The heist numbers are somewhat impressive, no one wants to loose to $10 million (which is the basic average) but shoppers don't pay that out and banks and retailers are essentially split the difference.  The numbers, on a bank or retailer scale, aren't terribly significant in terms of the bottom line.

“Stealing 50 million cards is just as easy as stealing 100 cards,” Litan says.

And so the question presents itself--if the costs aren't crippling and consumers aren't scared, how actively will solutions be pursued?



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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