For a few days last November, the Victoria's Secret website was not so clandestine. As a result, Limited Brands (NYSE:LTD) will pay New York a fine for a software glitch that allowed the online ogling of customer order information, the Associated Press reported Wednesday.
The good news is, credit card information was never revealed. However, it did divulge some alarming specifics, including apparel sizes, prices, and, worst of all, names and addresses.
Luckily for Limited, New York was the only state that complained, and the $50,000 fine is not such a great amount. However, the company is contacting 560 customers who were affected during the glitch, and it's offering refunds or credits in an unspecified amount to New York residents.
We all know software can malfunction, but with Internet security such a hot-button issue, this incident could shake up online shoppers who have since gotten past the old worries about the security of their private information. While part of Limited's settlement includes stepped-up Internet security measures, it should underline just how important it is for any online retailer to stay way ahead of the privacy game.
Victoria's Secret Direct, which includes both the store's Internet and catalog operations, made $939 million in sales in 2002, an 8.1% increase from 2001. Obviously, ordering lingerie from the privacy of the home has its appeal.
Will customers run to such competitors as Frederick's of Hollywood over this little misadventure? Probably not. But it could perhaps influence the purchasing decisions of those who know exactly what they're looking for and prefer the comfort and ease of buying online. Say, the woman who likes a certain style and wants it in a couple of different colors, or the bashful boyfriend or husband who would rather not step into the store.
After all, with Internet privacy of utmost concern, nobody wants their unmentionables -- not the least of which their names and addresses -- exposed on the Internet. It would behoove Limited to assure its customers that it can keep it all covered up going forward.
Alyce Lomax welcomes your feedback at [email protected].
