The common wisdom these days is that consumers are numb to data breaches, but Stax Consulting asked a thousand people and the results show that is not the case. This is just one more reason why avoiding being breached is still in your interest. For those of you who are concerned, I will make a suggestion at the end .
Myth #1 – Consumers don’t know or care about breaches
Nearly 70% of the people asked could correctly identify companies that had been breached. 15% said that they generally stopped shopping at those stores and 23% said they stopped using the breached payment method there, which is also important. If the person had been a victim of a breach, the numbers were higher.
Myth #2 – Breaches don’t affect consumer spending
If the 15% above who said they would stop shopping at your store isn’t enough to consider, for victims of the breach, more than 25% said they would stop shopping there and nearly a third would close their account.
Among the consumers who continue to shop there after the breach, almost half don’t use their credit cards any more (for example, I still don’t use a credit card at Target). This is important because when people pay cash, they tend to spend 10-20 percent less – because the cost is more real than when you use plastic.
Myth #3 – A Breach Only Affects The Breached Retailer
Nearly half of the respondents blamed their bank as well. 43% said they closed, froze or stopped using that payment method. This impacts revenue up and down the food chain. In light of Visa and Mastercard telling banks that they can say why they are reissuing a card (such as “due to a security breach at Target …”), reissue letters may get more interesting in the future.
Myth #4 – Consumers Have Short Data Breach Memories
Consumers surveyed a year after the Target breach (before Christmas 2014) said that breach would affect their holiday spending.
Myth #5 – Consumers Will Come Back On There Own After A Breach
If some segment of the population stops shopping at a business, stops charging purchases there or reduces the size of their purchases, that is not a good thing for a business. If a year later people are still adjusting their shopping patterns due to the Target breach, the researchers suggest businesses ought to have a plan in place to win back shoppers. Target, for example, had more sales events, but sales reduce profits. In their case, even with the sales, their revenue was down and, of course, so were profits.
This article comes from a CNBC article published here.
For stores that I do frequent a lot, I used prepaid gift cards. I don’t use the kind that you refill, but rather the ones that are thrown away when they are empty. That way, if a store or Internet site gets hacked, the card is typically worthless. In Colorado, the grocery stores sell the cards for no fee and you get fuel points in addition. They have racks with a hundred different cards. Of course, you would only buy cards for places that you are concerned about. I, for example, buy Target and Home Depot cards. You can also buy Mastercard and Visa cards, but there is a fee for them, so shop carefully. Those cards are useful if you have to shop at a web site that you think might be sketchy.