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Putting a number to Target's data breach costs

  • Target (TGT +0.5%) could lose a few billion dollars due to the breach of customer data that occurred last year, according to some early estimates.
  • Slapping on wide discounts after the attack and paying for free credit monitoring services was just the start, note analysts. Marketing costs to repair the brand could be very high, while before too long banks will be in line to ask for payments on fraudulent transaction on stolen cards.
Comments (10)
  • MintyFresh32
    , contributor
    Comments (358) | Send Message
     
    Target is a very strong dividend growth company, and its recent troubles present a great buying opportunity. It may take a few quarters, or even more, for the ship to turn around, but they'll get back on track and this period of volatility will have been a strong time to get in. Great discussion of TGT as a dividend growth stock here: http://bit.ly/1dkafIx
    19 Feb, 10:23 AM Reply Like
  • C,Ican
    , contributor
    Comments (8) | Send Message
     
    Buy Target now, Remember B.P at 25.00 Bucks-now 48.00- also Target has 200 million in Insurance -and the Banks that supplied the cards are on the hook more
    than Target is-in 6 months Target @ 65.00-Buy -Buy-Buy-Tell em Carl sent ya
    19 Feb, 11:37 AM Reply Like
  • ipanemaguy
    , contributor
    Comment (1) | Send Message
     
    The data breach has created several negative customer experience situations, (1) the "guests" are generally confused about what their individual risk is and on which cards, (2) many customers blame TGT for the breach and this has caused a loss of trust with the company, (3) the use of cards appears to be significantly reduced and much buying is on a cash basis.
    The confusion over buying risk, the loss of trust and the move to cash are all negative for TGT, together they will seriously harm the relationship that many customers enjoyed with TGT and the harm will be reflected in the Operating Results.
    19 Feb, 11:42 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3518) | Send Message
     
    ipane
    How much of that is quantifiable changes in customer perceptions and behavior? And how much is guesswork from the media?
    19 Feb, 12:00 PM Reply Like
  • Greyfox070
    , contributor
    Comments (38) | Send Message
     
    I seriously doubt Guests are swapping to cash. TGT Red Debit card users receive a 5% discount on their entire purchase every day, and I have my doubts your average Guest will switch to cash and not take the 5% discount in the name of "security".

     

    I am a regular TGT customer, and my relationship with them is unchanged, and I'm sure the vast majority feel the same way. Considering the alternatives in the bulk retail space, I'll keep my shopping and investment dollars aimed at TGT.
    19 Feb, 12:02 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3518) | Send Message
     
    The banks have not opted to pay to switch to the European cards with more security that wouldn't have been breached. A number of retailers, not just Target were breached (but Target was the big target). So Target's not going to get the full blame on this from the cards - since their decisions effected it too.
    19 Feb, 11:45 AM Reply Like
  • d earle
    , contributor
    Comments (3) | Send Message
     
    When banks start claiming payments for fraudulent transactions I hope Target can countersue for their use of obsolete technology on credit cards.
    19 Feb, 11:46 AM Reply Like
  • steve4466
    , contributor
    Comments (91) | Send Message
     
    This sounds like a controlled leak by the company via friendly analysts. WMT results are tomorrow and TGT's next week, when they'll have to estimate a figure for cost of the data breach anyway. Preparing the market for the news and to reduce uncertainty. Judging by today's stock reaction the market is quite okay with it costing several billions.
    19 Feb, 03:10 PM Reply Like
  • Bob 88
    , contributor
    Comments (50) | Send Message
     
    For the last few trading days, among the big 3 retailers, Walmart and Costco are down, however, Target is up. Does it mean anything? Too many long investors are taking a chance. They may consider all the bad news on Target are out and priced in. However, Up-to-date, I don't really see any official and comprehensive assessment of damages caused by the massive security breach incident. Is the current Target share price a real bargain? Is Target a more solid company than Walmart and Costco? We may get some of our answers from their earning reports soon.
    19 Feb, 06:32 PM Reply Like
  • David Jaffe
    , contributor
    Comments (19) | Send Message
     
    The sky is falling? I think not. This is a blip. Pay a few bucks, get publicly scolded by congress, meanwhile behind closed doors, " when are you bringing 5 new stores to my district, need jobs jobs jobs" blah blah. We need tougher standards, blah blah for the next year and a half. Nothing will change. TGT will beef up their IT department, fire a couple of stoners, announce a new partnership with IBM. This will be a distant memory soon enough and TGT will go on being a 40B and growing dividend paying powerhouse. If you aren't using this as an opportunity to load up your IRA, you might as well quit and go back to playing with mutual funds.
    19 Feb, 09:20 PM Reply Like
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