Thursday, September 28, 2023
HomeretailCostco has 'limited exposure' to card breaches: Former CEO

Costco has ‘limited exposure’ to card breaches: Former CEO

While questions about retail security measures abound after data breaches at Target last month and now Neiman Marcus, wholesaler Costco has a "limited exposure" to credit card hacks because of its purchasing policies, a former CEO told CNBC on Monday.

"Obviously, I'm sure that Target and Neiman Marcus had taken the precautions that were necessary," Costco co-founder James Sinegal said on "Squawk on the Street." "We have a limited exposure to credit cards because we only accept American Express at our warehouses."

Sinegal said that stores affected by the breach most likely thought they were doing enough to deter hackers, which is why Costco will re-examine its security practices.

(Read more: Retailers reporting weak profits, outlooks abound)

Also asked about the busy holiday retail season, Sinegal said those gift buyers rescued retailers this year, but that consumers still seem nervous about spending.

The holidays "kind of saved the season for us and a lot of other retailers as well," said Sinegal, now a Costco board member. "So we had a good reaction at the end, but of course a lot of anxiety up until that last minute. … There's a little apprehension on the part of the consumer, certainly, when there is anxiety about what's happening with the economy."

Last week, the National Retail Federation honored Sinegal for his years as Costco CEO, where he helped transform shopping habits by offering 5-pound cans of coffee and other wholesale items.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."


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