Tag Archives: Target

More Retailers Go Bankrupt and You Still Want To Own Gift Cards?

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Last Saturday, without notice, Future Shop ceased to exist. Best Buy, the parent company, closed 66 or so stores immediately, and about the same number will be closed for a week, then reopen as Best Buy. Two days earlier, the parent company of Ricki’s, Cleo and Bootlegger filed for bankruptcy. The week before, XS Cargo went under, and Mexx, as well as Jacob’s closed operations in Canada, in addition to the bankruptcy of Target Canada.

These companies going under isn’t something they are going to advertise in advance. So, once again, I’ll ask: Why on earth do you want to own or give any gift cards? You’ve given them your cash which never goes bad, in the hope that store will still be around when you or the recipient of that gift wants to use it? How many more scares do you need to realize gift cards are not your friend. You’re turning cash that can be used anywhere and anytime into an IOU for one specific store, and it’ll be wiped out when those businesses go under.

If you have Target gift cards, you may want to try using them online with Target US. With XS Cargo, Jacob’s, Mexx, Ricki’s, Cleo and Bootlegger you’re out of luck. Since Best Buy didn’t go under yet, the Future Shop gift cards can be used in their stores, so you dodged a big bullet for now. Make this a big heads up to gift cash that doesn’t expire, has no fees or restrictions and doesn’t go bad. Don’t stick someone you’re gifting with something that may be worthless when they want to use it! If you absolutely have to gift a piece of plastic, make it a prepaid Visa or Mastercard. It’ll have an upfront fee of $2 or $3 but that’s buying peace of mind it’ll be good next week or next year!

One more quick thing:

Good bye Suze Orman. She won’t have her CNBC television show anymore. I’m not a fan, but that’s a personal opinion. I lost a lot of respect for her being spokesperson for one of the fastest depreciating vehicle lines in North America. Plus, telling callers to diversify their investments, buy mutual funds, etc. when personally she only has Municipal Bonds as investments. There’s a great Slate Magazine expose on Orman from a few years ago.

Have You Used Your Credit Card at Target or Home Depot?

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Another week brought another massive data breach. Three weeks ago, hackers got into Home Depot main computer and managed to steal information on 56 million credit cards. That was just the latest – but also one of the biggest, breaking the Target data breach of 40 million earlier this year. To paraphrase a quote from the FBI: It’s like having 15,000 bank robberies that can be done from someone’s basement. Plus, it’s a lot more lucrative, and the odds of getting caught or prosecuted are minute.

The crooks installed malware into the Home Depot system and were then able to download all the history of credit cards and transactions. Shame on Home Depot, because it was the same way it was done at Target. They didn’t learn the lesson, or didn’t learn it fast enough. I did learn something: I wasn’t sure retailers were really that interested in protecting their information. But it turns out that they are. Target has spent over $110 million since the breach on fixing the leaks and customers don’t trust them anymore as their sales are down five percent since then. That’s a staggering amount.

And a week ago, JPMorgan Chase was hacked over a two week period impacting 83 million of their customers. The PR speak right now is that they are “not aware” of any confidential client information having been hacked….in other words: they don’t really know yet. Gees, you’d think that if I broke into your house you’d notice it in less than two weeks!

Most people tend to be in two camps on these data breaches: They either get really freaked out, or they’re complacent and just don’t seem to care. In Canada, we’re luckier than our friends south of the border. Our credit cards all have the chip technology. Since a couple of years ago, when you use your credit card, you’ll need to enter a PIN in order to get the transaction through. So for us, it’s OK to not worry. What the thieves stole was a one-off transaction for what you bought at Target, Home Depot, or other stores that have been hacked. That transaction went through, so the information is of little interest to the thieves.

You should always look through all of your credit card transactions. That’s just common sense and just a good precaution against any charges that aren’t yours. If you find any, you’re never liable. Just call the 800 number on the back of your card and the charges will be removed and you’ll be issued a new card.

Thieves steal credit card information in order to make a duplicate card that they can then use in stores to mostly buy electronic stuff or gift cards – anything they can readily re-sell or fence and turn into cash. The other way is to sell these card numbers to other crooks. I bet my American Express is for sale on a bunch of the crooks’ chat rooms as I’ve certainly used it at Target, Home Depot, Marshalls, and a number of other store chains that have been hacked.

Stealing credit card numbers in the U.S. is easy and very profitable for the crooks. In the U.S., card holders there should freak. The U.S. still uses credit card technology that was developed in the 1960s. Swipe and sign and that’s it. No PIN means crooks have a credit card they can use over and over, and not just a one-off transaction.

The big advantage U.S. citizens have is that they can freeze their credit reports. If crooks can’t access your credit files, they can’t commit identity theft and borrow money as if they were you. That’s something that’s long overdue in Canada and would eliminate close to 99% of identity theft.

New Debit Card Fees & Some Bank Insights

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Last week the federal government announced a discussion period for some prepaid credit card changes. They’re most welcome and long overdue, but they sure don’t go far enough. What the proposed changes include are:
-No expiry for prepaid credit cards
-Fees must be prominently disclosed in advance of purchase
-No maintenance fees for at least one year.

Now help me with this? When are these things a problem when you have cash? Right – they never apply! It’s ok to charge a monthly maintenance fee after a year? What? Does cash expire in the same way? With cash, do you have to look for the traps of fees? Enough said…

There is also a bunch of news from the world of our no-service big six banks:

Scotiabank is now marketing American Express Gold cards. They’re the only Canadian big bank and it’s not the real Amex charge cards, just the Gold credit card with travel points. It’s nice to see the market expanding and they’ve sure done a lot of advertising for it!

The TD had a big announcement last week: They are buying the US credit card portfolio of Target. The total of Target credit card balances is just under $6 billion and the deal is for seven years. That likely means TD will handle the Canadian Target Visa cards when they launch in Canada in March. And, as we discussed a few months ago, the rumour is that Canada will also have the permanent 5 percent discount on any shopping with their Visa card. So skip the Amex Gold and wait for the Target Visa if that’s true.

The Royal, also last week, purchased the Canadian operations of Ally Financial. Do you remember GMAC? It was the finance division of General Motors and THE most profitable part of their portfolio. No wonder when most people finance and don’t shop around for their loan. Well, GMAC was sold when GM was in big trouble. Then they got into even bigger trouble with the US financial meltdown and the government allowed them to convert into a bank. That became Ally, which is now part of the Royal. It’s still massively profitable and the Royal outbid 15 companies and paid $3.8 billion.