Report: It Takes Months For Organizations To Detect And Resolve Data Breaches
The Words Organizations Use In Their Data Breach Notices

Michaels Stores Provide Policies And Class Action Notice On Sales Receipts

My wife and many of her friends like to quilt. They regularly visit retail stores and quilt shops for quilting supplies. This past weekend, my wife visited a Michaels store in Massachusetts. After paying (with cash) for her purchases, she received the following sales receipt:

Sales receipt from a Michaels store with policy information

The sales receipt mentions the store's coupon, exchanges, and returns policies, plus a recent class action lawsuit. The Michaels sales receipt says:

"Dear Valued Customer:

Our coupon policy is to accept one coupon per customer per day. Certain exclusions apply. Please review the exclusion on the coupon and speak with the manager on duty for any questions you may have. Thank You.

To return or exchange an item, customer is required to present a valid photo ID that will be swiped/recorded at the time of the return or exchange for return authorization purposes only. Receipt required within 60 days for refund on most products. Alternate rules apply to books, magazines, and technology and custom products. Returns without receipt will receive Store Return Card. Refunded amount will be the lowest sales price of the item within the last 90 days. Return polices are available at Michaels.com and in store."

One coupon per customer per day? That sounds very stingy and customer unfriendly, as if the store really doesn't want to accept any coupons. And, why use the sales receipt to deliver policy information? This seems customer unfriendly. I've seen promotions and contest information on sales receipts, but not detailed policy information. Simply, print the complete information on regular 8.5 x 11 inch sized paper which is more legible; and insert in each customer's bag. Plus, some customers prefer or require large-print notices.

If you compare the returns/exchanges language on the sales receipt to the store's online Return Policy for US residents (there is a separate Return Policy for Canadian residents), you will find that the online policy has additional language. Customers should not assume that the sales receipt mentions the entire return policy.

More importantly, I want to know why Michaels' return/exchange policy requires the scanning and retention of consumers' identification documents (e.g., driver's licenses, state-issued ID's, passports, and military ID's) even when customers have a receipt. This seems customer unfriendly. When a store requires a document like a driver's license to process a return or exchange, the store collects everything on that document: your address, Driver ID number, height, weight, hair and eye color, and birth date.

Does Michaels really need all of this information (e.g., my weight, eye and hair color) to process a return with a valid receipt? This data collection is legal when performed for fraud prevention. There seems to be nothing stopping retailers from using the data collected for other purposes, such as data mining and marketing.

If a consumer has a receipt, that should be all that is necessary. I did some brief checking and at least one' competitor, Jo-Ann Fabric & Craft Stores, does not require IDs for in-store product returns. Smaller local and mom-and-pop fabric/crafts stores probably have more customer-friendly policies, too.

The sales receipt does not mention a privacy policy. It should, since Michaels does have a privacy policy online at its website, with specific additions for residents of California, Nevada, Vermont, and Canada. However, that online privacy policy does not seem to mention its data retention and sharing polices with ID information collected via returns or exchanges.

Given its return/exchange policy, I want to know how long Michaels retains ID information and what other companies (by name) it shares that ID information with -- items a privacy policy typically state. Without a statement in its privacy policy, a retailer can do anything with that data collected. This ID information is very sensitive data. Customers need to know how long a store retains this information and who it is shared with. Otherwise, consumers cannot make an informed choice.

The sales receipt also says (links enabled):

"Michaels Data Breach Class Action (for more information, please go to www.michaelsdatasettlement.com)

Michaels has settled a lawsuit that allowed certain of its customer suffered damages as a result of a data breach at selected Michaels stores between January 1, 2011 and May 12, 2011. Michaels denies all of the claims."

Unfortunately, that last sentence is vague. It refers to claims alleged in the lawsuit and not claims submitted by data breach victims seeking reimbursement for damages. In May 2011, Michaels stores warned customers in Illinois, New Jersey, California, and 15 other states about the data breach. Criminals had reportedly tampered with in-store PIN pads in checkout lines (e.g., skimming) to steal debit and credit card data. Reportedly, 90 PIN pads were initially affected, but the retail chain later replaced about 7,200 PIN pads. About 94,000 consumer accounts were affected.

Browse the list of Michaels stores (Adobe PDF) affected by the data breach. The list included several stores in Massachusetts in Braintree, Burlington, Danvers, Everett, and Hanover. Customers can also visit the Consumer Notices page at the Michaels.com.

Skimming is a worldwide identity theft and fraud problem. Besides supermarkets and retail stores, criminals target bank ATM machines, gas station pumps, and contact-less (e.g., RFID) payment methods. Several states, including California and Washington, have already banned RFID skimming. Stolen debit card and PIN data gives thieves direct access to consumers' checking bank accounts.

The sales receipt also says:

"You are included in the class if you shopped in this Michaels store or in other selected Michaels stores during that period and your Payment Card was swiped on a PIN Pad terminal from which credit or debit card information was stolen. A complete list of affected Michaels stores can be found at www.michaelsdatasettlement.com. Customers whose credit or debit card information was stolen may receive monetary payment for documented unreimbursed monetary damages and/or credit monitoring services. To request such relief, you must submit a claim postmarked by May 25, 2013.

Unless you exclude yourself from the class by March 5, 2013, you will give up the right to ever sue Michaels about the legal claims the settlement resolves. If you stay in the class, you may object to the settlement by March 5, 2013.

The Court will hold a hearing on April 4, 2013, to consider whether to approve the settlement and payment of attorneys' fees and expenses. You may ask to appear and speak at the hearing."

The settlement agreement includes a $600,000 payment by Michaels stores, which could increase to $800,000 depending upon the volume of claims and reimbursements. If the entire $600,000 is not used, then the remainder will be donated to the Starlight Childrens Foundation, which works with seriously ill children.

I'm glad that my wife paid with cash. I hope that she buys her quilting supplies elsewhere in the future, and doesn't have to return or exchange any of her purchases made at Michaels stores.

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Marcia Szkolka

Thanks George. I already know what a stinky operation they run and I rarely go there for my supplies. Perhaps there just isn’t enough money in the arts and crafts business anymore. They offer coupons and then make it difficult for you to use them. They have sale signs near products but it is very difficult to figure out which product is on sale. The people at the register are of very little help. So I go up to the register to pay (with cash only) and have every intention of ditching products that don’t ring up to my expectations. I have a strong disliking for Michael’s stores.

Another store that I disliked for many years went out of business – Fabric Place. They had all the same issues too along with my pet peeve “poor customer service”. I personally knew a person on the staff and she was a terrific smart conscientious worker but her hands were tied. She had to perform the way management decreed and was not allowed to interact in an intelligent way with customers.

I dislike shopping. I will not tolerate long lines to buy cheap junk. I will gladly hand over my hard earned money at stores that give good service and square deals. We all need to stop spending money in places that aggravate us.

George

For those who want to read and learn more:

http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=8557606
ID Swipe Return Policy Worries Some Customers

"The National Retail Federation says about one-third of retailers make you show an id to return items. Some of them swipe and the card and capture the information off the magnetic strip... Fewer than 5 percent of returns are dishonest. "

George
Editor
http://ivebeenmugged.typepad.com

Natash

We got our credit card number stolen and this card was duplicated, the thieves were shopping at michaels and got 150+$ worth of stuff. I don't know what you can really buy there for that much, but I believe since card is duplicated they was going to come back later and return goods for cash. So in that case to see the I'd of this people would be really helpful, that's why I think they want your ID when returning stuff. To me personally- if I don't like stores policy and how it's run- I simply trying not to shop there .

The comments to this entry are closed.