Bad News for Target: Holiday Shoppers Plan to Skip Breached Retailers
The news. Nearly half of skittish holiday shoppers are leaving large retailers targeted by hackers off their list.
A new survey from CreditCards.com reveals that 45% of shoppers won't be visiting stores that have fallen victim to cyber criminals stealing customers' credit card data, like Target, Home Depot and Neiman Marcus.
Of the 865 people polled, 48% said they'll use cash this holiday shopping season "out of concern over the numerous cyber attacks against retailers," the Huffington Post reports. That decision to use cash over credit is a "clear sign" that shoppers are still nervous about their private information falling into the wrong hands.
Why it matters. The holiday shopping season is massive for retailers. The span between Thanksgiving and Christmas accounts for 20% to 40% of the company's annual sales, so if shoppers decide to go to those stores' competitors, it could make for a less than joyous holiday.
The results of the survey also signals the mistrust customers have with companies and their personal information — and for good reason. Target is still reeling from a massive data breach from last year, when thieves stole private information from 70 million shoppers and tore into its bottom line.
The reaction. Of course, CreditCard.com's survey represents a small sample of the millions of shoppers who will hit the stores this holiday season. The number of shoppers were who impacted by the Home Depot and Target breaches only equals about one-third of the U.S. population, and banks were quick to issue new cards and reimburse charges.
Have shoppers gotten over the hacks? Target thinks so. A Target spokeswoman told the Huffington Post shoppers have "moved on" and labeled the breach as "old news." But the company said Target has revamped its technology team and is installing new card-reading machines to ensure safe transactions.
Home Depot is taking a similar step by installing machines that "protects payment information through encryption to make credit card numbers unreadable to hackers."
The 45% figure seems steep to David Robertson, publisher of the Nilson Report, a credit card industry trade magazine. "We know that Target's business was negatively impacted by the breach that occurred there, but nowhere near the level that would be suggested by 'almost half,'" he told the Huffington Post.
Regardless, the hacks are reverberating on shoppers' minds even if it's not that high. Matt Schulz, CreditCards.com's senior analyst, told the Huffington Post a "really good sale can some times trump people's security concerns."
We all love a discounted coffee machine, but we'll pay with cash just to be safe.