Will Hackers Change Your Holiday Shopping Habits?
‘Tis the season to be careful with your wallet and personal information. Over the past year, data breaches at major retail stores have captured the attention of Americans. Privacy concerns are not a new issue in the digital age, but the negative exposure may be changing shopping habits this holiday season.
Nearly half of shoppers using plastic say they’re reluctant to return to stores that have been hacked. According to a new survey from CreditCards.com, 45% of respondents with credit or debit cards say they would “definitely” or “probably” avoid one of their regular stores over the holidays if that retailer experiences a data breach. In fact, 48% say security breaches make them more likely to pay with cash. Only one in eight shoppers say they are more likely to shop with credit cards this season.
Several big-name retailers have recently experienced data breaches. Target, the second-largest discount retailer in the United States, had a data breach in December 2013. In August, the company announced the breach cost $148 million in the second quarter, partially offset by a $38 million insurance receivable. Last month, Home Depot confirmed reports that its payment data systems were breached, potentially affecting customers using payment cards at its U.S. and Canadian stores. Even Dairy Queen was hacked, compromising software systems at approximately 400 locations.
A variety of factors appear to cause shoppers to be more sensitive to data breaches than others. The survey finds that only 31% of those in households earning $75,000 or more annually said they would “definitely” or “probably” avoid retailers who experienced a data breach, compared to 56% of those in households earning less than $30,000 a year. Similarly, respondents with higher levels of education are less likely to avoid stores that have been hacked.
The type of retailer also affects how shoppers react to data breaches. “A retailer such as Target where consumers have other options for shopping might lead people to shop elsewhere. But if a building contractor has a business account at Home Depot, he won’t necessarily go elsewhere after a breach,” said Jeff Foresman, information security compliance lead at Rock Security.
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