TJX closes book on infamous security breach with sale
Everything must go
TJX, the discount retailer that was the target of one of the largest information security breaches on record, rewarded customers with a a special sale offering 15 per cent discounts in all its US and Canadian stores on Thursday.
The one-day "Customer Appreciation" sale was billed as the firm's way of expressing its appreciation for customers for retaining their loyalty after it did such a bad job of retaining their records. Two years ago TJX suffered a long-running security breach, later traced as starting off from an insecure wireless network as one of its stores, which resulted in the exposure of 45.7m credit card records, going by conservative estimates. Other estimates put the figure at 94m accounts.
The retailer set aside $118m to cover costs and potential liability arising from the breach in August 2007, later earmarking $40.9m of these funds to settle a lawsuit from banks over hit by fraudulent losses tied to the attack in December 2007. Meanwhile 11 people have been charged with a variety of ID fraud and hacking offences over the breach, some of whom have already pleaded guilty as part of various plea bargaining arrangements. The trials of the remaining suspects are expected to go ahead later this year.
With banks squared off and suspects standing trial, the main order of business for TJX relating to the breach involving winning back the custom of potentially aggrieved punters.
Shoppers across the US and Canada were offered a 15 per cent discount for one day only at any of the TJX outlets, including TJ Maxx, HomeGoods and Marshalls stores. The sale was originally suggested as part of a court settlement with banks over the consequences of the breach. The stipulation failed to make it into the final court agreement, but TJX decided to go ahead anyway, according to US reports.
January sales are, of course, a common way for department stores to clear excess inventory, so the one day sale was hardly too much of an imposition. TJX may even make a profit from the sale, which it no doubt hopes finally closes the book on an inglorious chapter in the retailer's history. ®
The effect of currency exchange movements put a two per cent dint in TJX's sales of $17.7bn last year, the firm said earlier this month. This equates to $354m - treble what it put aside to cover the breach - and perhaps goes a long way towards explaining why the "customer appreciation" sale was not extended to punters in the UK and Ireland, where the retail giant also has stores.