Tuesday, November 11, 2008

Short Circuit in Gift Cards?

Circuit City Stores, Inc.Image via Wikipedia
If You've got a Circuit City Gift Card, Use it Now!

Circuit City tried to reassure shoppers that it would be business as usual despite its Chapter 11 bankruptcy filing. 

They've asked a bankruptcy court to let it honor gift cards.  That's simply rhetoric to reassure gift card holders.  In reality, the gift cards are about to "short-circuit" both in the context of their future as an acceptable electronic payment and the time they'll be around.

The purpose of bankruptcy is to "restructure" but having heard  rhetoric following the Pay By Touch "bankruptcy" filing and imminent "restructuring," I'd advise consumers to take into account the fact that Circuit City is a retailer in serious financial trouble. That will affect their gift cards.  Sorry...I'd love to paint a rosier picture, but a "Sharper Image" comes to mind instead.  (To refresh your memory, their gift card holders lost everything)

So if you have a Circuit City gift card use it immediately.  In fact,  I'd advise that you do that across the board with any retailer where you have a prepaid gift card.

In this environment, I've got 3 words for you..."use it now".  In the past, people have shown a tendency to hold on to the gift cards for a couple of months.   I'm not a big believer in gift cards, they're the opposite of a layaway program...you're basically "loaning" money to the retailer and getting nothing in return. 

But  if you must get one, and not many are considering it this holiday season (see previous post) instead of dolling out your hard earned cash for a store branded (closed loop) gift card, you should only "consider" purchasing a gift card that is Visa/MC/Discover/AMEX branded/backed,  (open loop cards)
I wouldn't be the least bit surprised, if  and when the Circuit City gift cards do indeed short-circuit, to see the gift card landscape vastly affected forever.  They'll either be some new regulation introduced, someone will come up with an improved program or consumers will shy away, at least from...closed loop gift cards.

Reblog this post [with Zemanta]

Holidaze - Only 1.1% Will Use Credit Cards More

Cash is king for U.S. holiday shoppers: survey | U.S. | Reuters

CHICAGO (Reuters) - Cash is king this holiday season as consumers try to limit their credit card purchases or have maxed out on credit altogether, according to a survey conducted for Reuters.

A total of 88.6 percent of those surveyed said they would use more cash for buying holiday gifts this year, while 59.7 percent said they will use credit cards less, according to the survey by America's Research Group.

Only 1.1 percent said they will use credit cards more.

These stark differences could be partly due to consumers feeling more credit pressures as the economy weakens and banks become less willing to extend credit, said Britt Beemer, chairman of consumer tracking firm America's Research Group.

But another, even larger reason could be that many consumers -- 43.2 percent -- will give gift cards less often this year because they are worried that those cards would be worthless if a retailer files for bankruptcy.

Consumers who shy away from gift cards may just give cash instead, he said.

"If the only store I know of (that) is going to be around for sure is Wal-Mart, and I don't want to give a girlfriend a Wal-Mart gift card, cash is a lot more sexy," Beemer said.

The 2008 holiday season is shaping up to be challenging, at the very least, for retailers. The National Retail Federation has forecast the lowest increase in spending by consumers in at least six years.

Adding to the pressure for traditional retailers is the fact that bankrupt retailers like Circuit City are liquidating inventory at stores they are closing.  One-third of survey respondents said they will go to liquidation sales in place of their normal retailers this Christmas. 

Consumers are also trying to spread the pain across several paychecks, with 65 percent saying they plan to buy a few gifts each week and 31 percent saying they started shopping early so they would not have a big bill in one month.

One positive for retailers? The move to give cash instead of gift cards could lift sales during the holiday season, Beemer said.  "If somebody has cash, they spend it immediately," he said. "If somebody has a gift card, it rolls on to next Memorial Day or July 4 weekend."

Another positive factor could be lower gasoline prices, with 35.4 percent of respondents saying that lower gas prices will encourage them to spend more.

The survey consisted of 1,000 interviews conducted November 6-8 and has an error factor of plus or minus 3.8 percent.

Reblog this post [with Zemanta]

Get Faced on Facebook!

Facebook users are being warned to watch out for Nigerian scammers masquerading as friends on the social networking site, after an Australian woman was sent a message asking for money from a conman who had hacked into her friend's account. 

Google employee Karina Wells (pictured on left) told the Sydney Morning Herald (SMH) she was sent a message from a friend's account which claimed he was stranded in Lagos, Nigeria, and asked her to send A$500 for a plane ticket.  She became suspicious when he used the term "cell" vs. her friend's normal use of the word "mobile" and turned the tables on the scammer.

Here's the original story in the Sydney Herald:

"Cyber criminals target Facebook users - Security - Technology - smh.com.au

Asher Moses
November 10, 2008 - 2:27PM

Facebook has been infiltrated by Nigerian scammers and other cyber criminals who use compromised accounts to con users out of cash.

Now that even non-tech savvy internet users know not to respond to, or click on links in, emails from strangers, online thieves have turned to social networks and are finding it is easier to trick people when posing as their friends.

On Friday, Sydney-sider Karina Wells received a Facebook message from one of her friends, Adrian, saying he was stranded in Lagos, Nigeria, and needed her to lend him $500 for a ticket home.

Adrian used relatively good English but, after chatting further, words such as "cell" instead of "mobile phone" tipped Wells off that she was not talking to her friend but someone who had taken over his account.

Using sites such as Facebook allows scammers to research and target victims more effectively and avoid having their messages blocked by spam filters, said Paul Ducklin, head of technology at Sophos Asia Pacific.  It is likely the scammer obtained Adrian's Facebook login details after he was infected with a virus delivered by email or in an infected web page.

There are a number of viruses which, once installed on a computer, send back to the hacker a detailed log of everything entered using the keyboard, including online banking details and passwords for services such as Facebook.

Wells played along with the scammer, who asked her to transfer the money into a Western Union account.  "Naturally I was concerned as, to all intents and purposes, this seemed to be legitimate," she said.  "I pretended that I would help, obtained all the details of where he was and forwarded them to both Facebook and the relevant authorities."

But while the Nigerian scammer used the compromised Facebook account coupled with social engineering tactics to try to convince Wells to hand over money, many are using compromised accounts to spread malware. 

Typically, the victim receives a Facebook message from a friend with a subject such as "LOL. You've been catched on hidden cam, yo" or "Nice dancing! Shouldn't you be ashamed?"  The body of the message contains a video clip link that appears to go to a legitimate site such as Facebook or YouTube but, when clicked on, it takes the user to a bogus web page.  Before the users can play the video they are told they need to download a video player upgrade, which is in fact a password-stealing virus. The next time the victim logs into Facebook the malware-laden message is sent to all of their friends and the infected link is automatically added in comments on friends' pages.

Other less sophisticated attacks on Facebook members use spam emails, some appearing to come from Facebook itself, to spread viruses.

In September security firm WebSense reported on spam emails, purportedly sent from an @facebookmail.com address, that tell the victim they have received an invitation from Facebook to add a friend.  "The spammers included a zip attachment that purports to contain a picture in order to entice the recipient to double-click on it. The attached file is actually a Trojan horse," WebSense said.

Reblog this post [with Zemanta]

PayPal Says 70% to Cut Holiday Shopping

70% of online shoppers to cut spending during holiday season according to PayPal 

Study shows that throughout the holiday season, 70 percent of US online shoppers have expressed their intention to cut back on their spending.

In order to achieve that, they are to buy fewer and less expensive gifts, spend less on parties and decorations, as well as give up traveling plans. As far as promotions are concerned, holiday shoppers feel most attracted by free shipping when buying gifts online.

Over 80 percent are to make online purchases to benefit from free shipping, cash back and other promotions.

The study, which was commissioned by PayPal, also indicates a preference for ecologically-friendly products among online shoppers when it comes to buying gifts. Thus, almost a quarter of online shoppers have stated that they intend to purchase gift cards or green gifts including organic foods, eco-conscious clothing and recycled house wares.

College graduates feel most inclined to receive alternative gifts. 28 percent have expressed their preference for green items, 25 percent for electronic gift cards and 20 percent for donations to charity on their behalf. 73 percent of online shoppers have made plans to give to charity this season, over 60 percent in 2007. The study also indicates that one third of online buyers use PayPal when buying online and one in five buyers have made plans to do more online shopping in 2008 than they did in 2007.

PayPal's 2008 Holiday Survey was conducted by Ipsos.

Reblog this post [with Zemanta]

Global PCI DSS Deadline Set by Visa

Visa Sets Global PCI DSS Deadlines
Data Security Compliance Requirements Aligned Across Visa Regions

San Francisco, CA, November 10, 2008

Visa Inc. (NYSE: V) today announced global mandates for compliance with the Payment Card Industry Data Security Standard (PCI DSS), creating a consistent framework for compliance among merchants, service providers and their agents.

The enhancements include a global set of requirements for merchants to validate their compliance with PCI DSS; and for the largest merchants, dates by which they must achieve validation. Deadlines are also set for large and mid-level merchants to demonstrate that they are not storing certain types of sensitive card data. Service provider levels and PCI DSS validation requirements have likewise been aligned under a global standard and compliance timeline. Compliance with PCI DSS will help protect businesses from financial and reputational harm that often results from cardholder data compromises. Visa data security compliance programs have provided compelling incentives for merchants and agents to properly secure cardholder data.

The new framework establishes the minimum requirements for Visa Inc. regions. As an independent company and licensee of Visa International for the business operations in European markets, Visa Europe's PCI DSS framework requires compliance validation and risk mitigation for Level 1 merchants; however the region will be adhering to a different timeline and process for executing compliance validation.

"Compliance with PCI DSS is vital to ensuring the integrity of the global payments system," said Eduardo Perez, head of global data security, Visa Inc. "Aligning compliance programs across the Visa regions is the latest step in our commitment to safeguarding cardholder data."

To read the entire Press Release, click here

Reblog this post [with Zemanta]

AMEX now a Bank Holding Company


The Federal Reserve said it rushed approval of American Express' application to convert to a bank holding company because of "emergency conditions" and the financial markets' "unusual and exigent circumstances."

According to the Fed, AmexCo had $127bn in total assets but retail deposits of just $7.2bn – another sign that the financial crisis is
prompting regulators to accept bank holding applications from companies with little retail banking presence.

Bank holding companies get access to low-cost Fed lending facilities but have to submit to the stricter regulation and capital requirements demanded by the regulators.

American Express had already operated a commercial bank and a savings bank supervised by federal regulators. But the bulk of its assets were not in those institutions. As a bank holding company, these assets are now under federal supervision, a move that expands the amount of financing it can request from the government. That means the bank could qualify for up to $3.6 billion of the Treasury Department’s money, instead of just a small portion.

“Given the continued volatility in the financial markets, we want to be best positioned to take advantage of the various programs the federal government has introduced or may introduce,” said Kenneth I. Chenault, the chairman and chief executive of American Express. “We will continue to build a larger deposit base to broaden our funding sources.”

Financial Times (11/11) New York Times 11/10

Reblog this post [with Zemanta]

Talk About Swiping a PIN Pad

Skimming scam spreads from Calgary
Skimming scam spreads from Calgary
Calgary Herald
Published: Tuesday, November 11, 2008

The same debit card skimming scam discovered in Calgary two months ago has turned up in Airdrie and Red Deer, and police fear other areas have been targeted, too.

Police say they have video footage of a thief stealing a debit card pin pad just before an Airdrie retailer closed for the night on Sept. 11. After compromising the pad with wireless transmitter technology overnight, it was slipped back in the morning.

The pad functions normally but transmits all data to the criminal, police say.

Police say they suspect two other businesses have been targeted.

One pin pad was found after becoming inoperative and returned for service. The other was discovered only after more than 120 debit cards were cloned and used to extract money from the victims' accounts.

A compromised pin pad results in an average of $100,000 in loss, police say.

"It is believed that there is a possibility that additional retailers in southern Alberta have had their debit card pin pads compromised as well and are just not aware of this attack as yet," said RCMP spokesman Sgt. Patrick Webb.

© The Calgary Herald 2008

Reblog this post [with Zemanta]

Honoring Our Veterans!

Disqus for ePayment News