Home Depot officials stress that they only use the technique with shoppers who opt in, an argument that is somewhat tempered by how often consumers don't even notice privacy opt-in and opt-out Web site declarations. The chain has been using this technique for various purposes, including E-mailing in-store customers to ask them to review their recent purchases.
Home Depot's use of the card-matching procedure is not that unusual among major chains, but the norm is for the effort to be kept internal, to help improve general marketing. It was Home Depot's reaching out to customers that made some of them realize what was going on. And therein lies the problem.
One such shopper reached out to The Consumerist, which published his comments. That shopper said he had only visited HomeDepot.com as a guest and then made the in-store purchase of a drill months later.
"I can only conclude that Home Depot held my credit card information in one of their internal systems without my authorization, linked it to the e-mail address I used on the one-time purchase without my authorization, and is now watching what I buy in their store using the card so that I can build up their rating database and presumably so they can target their advertising to me," the story quoted the anonymous shopper as saying.
To be precise, Home Depot does not, of course, store payment-card data. It converts that data to a character string and then looks for a match with that string when it processes a card in-store.
Home Depot wouldn't say exactly how it converts the numbers, but there are only a few likely ways. PCI Columnist—and QSA Extraordinaire—Walter Conway said Home Depot could be using strong encryption or tokenization, or it might simply be comparing a non-reversible one-way hash. All approaches, he said, would enable the chain to track shoppers across channels. And, depending on the implementation, that is perfectly acceptable for PCI purposes.
Steve Sommers, a senior VP for applications development at security vendor Shift4, said his guess is that this is likely being done with a multi-use token, something Sommers argues is less than ideal.
Multi-use tokens came into being "when PCI SSC bastardized the tokenization definition and allowed for tokens to be mathematically derived from the PAN, either via encryption or some hash algorithm. Now with this method, the same card number would normally generate the same token. This would greatly reduce the effectiveness of the tokens to protect the data, but would give the merchant the tracking ability described. This is probably the method the merchant is relying on. While Shift4 adopted multi-use tokens, we do not believe that a token mathematically based on the PAN is secure, because it could be susceptible to rainbow attacks if the hash salt or key is ever compromised."Regardless of exactly how this is being done, the question is: Will this end up helping or hurting the chain? On the plus side for Home Depot, the do-it-yourself chain (or, for me, the send-contractors-to-this-place-when-you-are-too-incompetent-to-do-it-yourself chain) is one whose merchandise raises the fewest privacy fears.
On that scale, Walgreens (and other pharmacies) would at the top, right above grocery chains (including Walmart, Target and Costco). Near the bottom with Home Depot would be perhaps gas stations and dry cleaners. Neither Home Depot nor Exxon stations has a lot of embarrassing products.
Still, shopper privacy fears have never been especially logical or consistent. Home Depot's choosing to use this tactic in such a way to force consumers to realize what is going on is the issue. If you're going to push the privacy envelope, a little discretion is nice.
Two privacy issues are involved here. First, there's the HomeDepot.com guest account. Small-print opt-ins notwithstanding, most shoppers use the guest account because they think it will keep their transactions from being tracked. The benefit of signing in is the convenience of not having to type in the shipping address and the payment-card data and to be able to review earlier purchases. Shoppers who opt for guest checkout are giving all that up in exchange for what they believe will be an untracked online shopping effort.
Clearly, every online transaction is captured and tracked. And a transaction that ends with the shopper typing in full name, home address, possibly phone number and certainly payment data, well, it's hard to think of that as being anonymous in any way. To then take that payment data and use it to match—and then contact—that customer when he or she shows up in-store, now that is going to set off privacy alarm bells. The fact that shoppers might have left checked a box that includes opt-in wording doesn't change their perception that they are being tracked, and it feels eerie. (Eerie is nicer than creepy, but both could apply.)