The settlement is the latest in a series of payouts Target has made.
In August, Target settled with Visa for $67 million over the data hack. And in March, Target settled a federal class action lawsuit brought by customers for $10 million.
The only company that acknowledged using the software was Walmart. According to a spokesperson, the retailer tested facial recognition software in stores across several states for several months, but then discontinued the practice earlier this year.
“We were looking for a concrete business rationale … It didn’t have the ROI,” or return on investment, the spokesperson says.
Retailers and biometrics companies have been working together for years trying to figure out how to apply face recognition to the problem of shoplifting. As expected in a retail business, it all comes down to Return on Investment (ROI).
First, here’s what modern shoplifting looks like. It isn’t just teenagers pocketing lip-sticks and candy bars.
HAZEL PARK, Mich. — Police say a 7,600-square-foot warehouse served as the business hub for a sophisticated, multimillion-dollar theft ring that stole items from southeastern Michigan retailers and resold them on the Internet.
Veteran investigators said the shoplifting ring, which swiped as much as $15,000 a day in over-the-counter drugs and other goods from area stores, is the largest they have ever seen.
Oakland County Sheriff Michael Bouchard called the illegal business “amazing in size and scope” and one that likely operated for years before drug investigators spotted it last month.
The ring operators stored stolen items in the warehouse and sold them on the Internet through eBay, Amazon.com and other sites, investigators said.
Read the whole thing. Criminal organizations like these cause huge losses to retailers, higher prices to consumers, and increased production of dangerous street drugs. More and more, shoplifting is an organized crime problem, and everyone who isn’t in on the scam pays the price in one way or another.
Privacy issues associated with facial recognition in businesses open to the public get a lot of well-deserved attention. Clearly, facial recognition technology could be deployed in businesses open to the public in ways that are injurious to a reasonable person’s expectation of privacy. Brainstorming those ways, however, takes us pretty far away from the ROI calculation that is motivating retail outlets to seek out technologies that can help them reduce losses due to theft.
The privacy focus for facial recognition in retail spaces should be on what data is collected and what happens to it. In this case that means the photos and personal information that goes along with them. The easy part is that retail establishments have been collecting information on suspected shoplifters for a long time now and they already have policies about what they collect, when they collect it, and how long they retain it. The hard part is that new facial recognition technology makes sharing the information easier, securing it more difficult (and important!), and it requires new training for loss prevention staff about what, exactly, the technology is telling them.
That brings us back to the ROI. Obviously, using facial recognition to prevent a $15,000 organized crime heist helps the ROI calculation. Using facial recognition to interrupt a shopper based upon a “false positive” ID hurts the ROI calculation. So there’s at least a little bit of good news here for privacy: The ROI calculation that is so important to the business’s decision whether or not to use a facial recognition system does have a built-in way to account for at least some privacy concerns.
Is Facial Recognition The Next Privacy Battleground? (Fast Company)
While much recent retail technology buzz has focused on the promise and peril of Apple’s iBeacons, another identity tech has matured: facial recognition. It’s now powerful enough to let stores use cameras to link customers’ faces to information stored in databases—but it’s also finding use in industrial and transportation settings, where it can be used to keep people away from sensitive areas. But are we ready for this tech to start linking personal data with our faces without our knowledge?
Legally, there’s nothing stopping American businesses from doing so. A recent BBC article posited the future concern that retail businesses could compare photos taken in-store with databases drawing from data found on the Internet—like databases of social media or Facebook users…
The piece is worth reading in its entirety.
Comment: Are biometrics the future of retail payments? (Essential Retail)
The author doesn’t answer his own question, but I will.
Biometrics are at least part of the future of payments. The billion dollar questions are: How? & When?
FAST COMPANY – British supermarket chain Tesco is installing a face-scanning technology in all of its 450 gas stations. The technology uses cameras to identify the age and sex of store customers to target ads at customers who are waiting in line to pay.
What they discovered about biometric payments – a technology many have previously failed to establish – turned out to be even more promising than they expected.
The pilot took place in Villeneuve-d’Ascq and Angouleme in the north of France. The fingerprint technology had high adoption rates, attracted over 900 customers and facilitated over 5,000 payment transactions. Interestingly, more women participated in the trial (53 percent), and the most prominent segment with the highest participation rates were coupled partners and homeowners.
“Feedback was very good. Ninety-four percent of participants were ready to use this payment, Pierre said. “The average transaction amount was €58.60, which is 15 percent higher than the value of average card payments in France.”
Read the whole thing.
Is Facial Recognition For Payments Our Future? (Arctic Startup) — Helsinki based Uniqul grasps the challenges of trying to replace tokens with a biometric for point of sale use, and they have a clever approach. It’s a big job, though.
New technology allows retailers to spot a celebrity approaching (The Telegraph – UK)
…[A] purpose-built facial-recognition system has been designed to ensure no hapless shop assistant accidentally snubs their best customer again, the Sunday Times reported.
The VIP-identification technology, created by NEC IT Solutions, is already being tested in about a dozen top stores and exclusive hotels in Britain, America and the Far East.
Why Do I Get Fingerprinted at 24-Hour Fitness but Not the Bank? (Go Banking Rates)
When discussing the advancements in fraud prevention, executive vice president of the Federal Reserve Bank of Atlanta expressed that the United States is “falling behind the rest of the world in fraud protection, and I’m afraid American consumers are getting the short end of the stick.”
US banks lag behind banks worldwide and American fitness centers when it comes to tightening up ID.
One day, someone will crack this nut.
One YC-backed startup is betting that fingerprints and other forms of biometric identification may be the payment method of the future though. Called PayTango, they’re partnering with local universities to offer a quick and easy way for students to use their fingerprints to pay instead of credit cards.
The four-person team is basically almost fresh out of Carnegie Mellon University. The co-founders, Brian Groudan, Kelly Lau-Kee, Umang Patel and Christian Reyes, graduating later this summer and have experience in human-computer interaction and information systems.
Read the whole thing. The comments section is unusually lively, though severed-digit-phobia (or is it simple glibness?) seems endemic there. Really, folks. It’s a point of sale terminal. I’m pretty sure severed fingers would attract some attention at a cash register, perhaps even more than a stolen credit card.
If you wade those comments there are some enlightened ones there, too.
The LA Times: Catching up to the fact that, as far as facial recognition goes, it isn’t 2001 anymore.
5 Cutting Edge Ways to Combat Employee Theft (CNBC)
Problem No. 1: Taking money from the register
Problem No. 2: Copying the company’s digital assets
Problem No. 3: Stealing customer data
Problem No. 4: Pilfering products
Problem No. 5: Cheating on time sheets
Interesting use of hardware at 0:39 in the video below.
The “card sheath” hardware is interesting. I’m curious about how the payment system works end-to-end.
This will be worth keeping an eye on.
Facedeals lets you check in to venues with your face (Wired – UK)
Users will need to have authorised the Facedeals app through their Facebook account. This verifies your most recent photo tags and maps the biometric data of your face. This data is then used to identify you in the real world. It doesn’t appear to use Facebook’s own recognition technology, supplied by Face.com.
Ibiza die-hards are always looking for the next big thing, and at the moment this is it.
Much cooler than an all-inclusive wrist-band, this cashless system lets showy guests pay for anything at the hotel with a swipe of their fingers, a brilliant way to impress.
And as one of the hottest new party destinations in Ibiza, the five star options are pretty extensive.
The new face of CCTV surveillance (The Retail Bulletin)
“There have been huge advancements in both facial recognition analytics and in network camera technology, which is ultimately the source that the analytics have to work from.
“In particular HDTV cameras offer higher resolution video and enhanced clarity and sharpness, that complements the accuracy of facial recognition solutions making identification even simpler and more accurate.”
Retail outlets and CCTV vendors are catching on to the opportunities for a return on investment facial recognition technology provide.
The article neglects to mention, however, that the installed base of CCTV cameras is poorly suited to facial recognition.
Facial recognition is what it says: the recognition of faces. It’s not top-of-the-head recognition; it’s not profile recognition; it’s not back-of-the-head recognition. In general, CCTV cameras have been installed to observe and/or record what people are doing, not who they are. They have been deployed to answer the question, “what’s going on?”
This is changing and can be overcome by moving a camera down and changing its zoom to where it is capturing good face images. As CCTV installers become more familiar with facial recognition technology, results will improve dramatically.