Consumers Cry Cash is King Over Credit Cards

The credit card breach at Target stores during the 2013 Christmas shopping season affected 70 million shoppers from Black Friday forward. The effects of that event have been far reaching. Target suffered a horrible holiday sales period and has since struggled to recover. The whole nasty situation has left a hesitant taste in the mouth of consumers, nearly half of which surveys show will spend with cash this Christmas instead of plastic.

Consumers are not only cautious because of Target alone. Since that historic breach there have been dozens of retailers and national chains such as Kmart, Home Depot, Jimmy Johns, and Michael’s hit by similar events where private credit card data was stolen or compromised.

Target, naturally, wants to downplay what happened last Christmas. A spokesperson for Target told Huffington Post that the credit card breach was “old news” and the company has “moved on.” Both Target and Home Depot said they had installed new credit card readers or new encryption systems that make account information harder to be stolen by hackers.

But for consumers the new credit card machines look no different than the old one. Trust in using them, whether in store or online, is low.

“I’ve had my card replaced four times since last Christmas,” noted shopper Leroy Masterson of St. Louis. “Each time my bank sent me a new card because I used my old one at some place months before for a transaction I couldn’t remember. It’s a royal pain and I just give up using it much any more. I don’t know that it will be there for me because there is another one coming in the mail I don’t know about.”

These attitudes are contributing to the mixed signals about the upcoming season experts see coming. While employment, on paper, looks better and gas prices are taking a perceived sting from inflation not everyone is predicting a rosy sales period for Christmas.

Britt Beemer, CEO of America’s Research Group, sounded a similar note about the broader economy. He not only expects consumers will buy fewer items this year, but said they will continue to be “much more frugal.”

“I think it’s going to be a very tough Christmas season,” he said.

Spending with cash instead of cards will signal a disaster for online retailers, too. While online sales have grown year after year a slowdown in the use of credit cards can point to only one direction for online sales.

Retailers and online store operators both again: this Christmas cannot afford to see another major breach in credit card data.