Target’s CEO Steinhafel Steps Down following the 2013 Data Breach

May 09, 2014
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Target has been left with many choices to make after the data breach that occurred in the three weeks surrounding the holiday shopping season of 2013. As many as 40 million customers were compromised when their payment card accounts were hacked. According to an article by the Los Angeles Times, “The company later said that hackers had illegally accessed personal information such as phone numbers and email addresses from as many as 70 million customers.”

After the breach, it has been difficult for the company to win back its customers. The company’s earnings have also suffered in the fiscal year which ended on February 1. According to the Los Angeles Times, “Standard & Poor’s said it expects the breach to continue dampening shopper traffic at least through the first half of the fiscal year, but said the effects will probably lessen over time.”

After devoting 35 years to the brand, Chief Executive Gregg Steinhafel has stepped down as Target Corp.’s CEO. The data breach has been an unfortunate end to Steinhafel’s otherwise strong and constant leadership which carried the company through financial crisis, the following recession, and the expansion into Canada.  Despite Steinhafel stepping down, he will continue to serve as an advisor to Target.

In a statement to the Los Angeles Times, managing partner Jason Hanold of executive search firm Hanold Associates, stated that “It was a matter of when he was going to leave, given the magnitude of the failure…but I admire the timing — some boards could have had a knee-jerk reaction immediately after the fact that wouldn’t have given them the time to responsibly react and fix the problems.”

With time, Target hopes to see gains in performance. In the meantime, they are devoting time and funds into improving its security systems. By early next year, the company will switch to MasterCard from the current Visa in order to take advantage of their more secure chip-and-PIN technology. In addition to this $100-million initiative to upgrade, Target has also begun the hunt to permanently replace Steinhafel.  According to Los Angeles Times, spokeswoman Jenkins stated that “The company is ‘looking at all relevant candidates, internal and external, not limiting the search to any specific company or industry.’”

The majority of CEOs seem to migrate towards the commercial hub of New York or Los Angeles or start-ups; thus, it may prove rather difficult to bring an experienced and eager CEO to Minneapolis. In the meantime, Chief Financial Officer John Mulligan will act as interim president and chief executive as Target moves forward from the data breach and attempts to recover. Sadly, Steinhafel will also need time to recover from this incident. According to the Los Angeles Times, “Target’s board said Steinhafel “held himself personally accountable” for the breach, one of the largest on record at a retailer.”

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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