Cost of Target Data Breach Hits $162 Million
The Target data breach of 2013 was the first in a line of significant security hacks retailers have experienced during the last year and a half. In their fourth quarter earnings report, Target estimates the breach cost the company $162 million.
The breach, which impacted 40 million payment cards and the personal information on 70 million customers, actually cost the company much more. The gross numbers for 2013 were $61 million, and $191 million in 2014—a total of $252 million. However, $90 million was offset by insurance over this two-year period.
These numbers do not take into account any class action lawsuits or legal fes that may eventually result from the breach. Victims of the breach now have permission to file class actions against the company, which may result in a slew of new expenses in 2015.
Target has made a fair effort to rectify the situation, but the additional breaches for companies like Home Depot, Neiman Marcus and Staples have put consumers slightly on edge about retailer security in America. Nevertheless, Target reported revenues of $21.8 billion for the fourth quarter of 2014, trumping the analyst’s estimates and showing positive signs for the future.