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4 Reasons shoppers will shrug off Home Depot hack

By WTOP Staff

ANNE D’INNOCENZIO
AP Retail Writer

NEW YORK (AP) — Home Depot’s data breach could wind up being among the largest ever for a retailer, but that may not matter to its millions of customers.

The nation’s largest home-improvement chain on Monday confirmed a theft that could have gone back as far as April and affected customers who used credit and debit cards at nearly 2,200 of its U.S. and Canadian stores. While the scope of the hack is not yet known, there’s speculation that it could be the biggest yet.

Home Depot joins a growing list of retailers that have had their data stolen. Perhaps the most high-profile of those previous hacks came was at Target, which suffered profit and sales declines after shoppers fled following a breach that compromised 40 million debit and credit card accounts.

Industry watchers are betting Home Depot will fare better with its customers.

“It’s simply not a big issue with consumers,” said Craig Johnson, president of retail consultancy Customer Growth Partners, noting that shoppers seem to be almost immune to the breaches now. “Everybody knows that this is not people’s first rodeo.”

Take Johnna Horn. She stopped shopping at Target for two months after its breach was disclosed. Yet when she heard the news about Home Depot, she wasn’t alarmed.

“With Target, it was more shocking,” said Horn, who lives in Wentzville, Missouri. “With Home Depot, it’s like here we go again.”

To be sure, analysts say it’s too early to estimate the impact the breach will have on Home Depot’s business because there are many details that are unknown. But they say there are at least four reasons Home Depot’s breach may not matter to shoppers:

TIMING

In addition to the fact that Home Depot’s breach follows a thefts at other retailers, the chain may benefit from timing in another way.

Target Corp. disclosed its breach a week before Christmas, the final critical stretch of the two-month holiday season, the busiest shopping period of the year for retailers like Target.

But Home Depot’s disclosure came in September, months after the spring season, which is the busiest time of year for home-improvement chains.

“September is not a peak season for Home Depot, while Christmas at Target is critical,” said Greg Melich, a retail analyst at International Strategy & Investment Group LLC.

CUSTOMERs

Home Depot’s customers are more likely to react differently to the breach because of who they are.

About 37 percent of Home Depot’s sales come from professional and contractor services — or commercial customers, Melich estimates. Analysts say that group is loyal to Home Depot, and they often shop there several times a week.

By contrast, Target caters to the middle-income customers, who tend to shop around for the best prices. By nature, they tend to be less loyal to one store.

GROWING BUSINESS

Unlike Target, Home Depot’s business was solid before the breach.

Home Depot has been benefiting from a turnaround in the housing market that has enticed shoppers to spend more on their homes. Its revenue for the six-month period that ended last month was up 4.4 percent. Meanwhile, profit rose 13.5 percent, and the company raised its annual profit forecast.

Conversely, Target has had disappointing sales and profit declines during the economic recovery as its middle-income shoppers have remained frugal. It also has struggled to restore the reputation it’s lost among some shoppers that it has cheap chic fashions.

For the nine-month period that ended a little more than a month before Target disclosed the breach, the discounter’s sales rose just 1 percent, while profits fell nearly 29 percent.

LACK OF CHOICES

Home Depot customers see the chain as a necessary place to shop.

When Target’s breach was announced, customers had their pick of plenty of other stores that have the same merchandise that it carries at low prices, from Amazon.com to Wal-Mart.

On the other hand, Home Depot has fewer competitors. Shoppers can go to Lowe’s or Ace Hardware and small hardware stores, but that’s about all, analysts say.

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Follow Anne D’Innocenzio at http://www.Twitter.com/adinnocenzio

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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