Did Macy’s Black Friday credit card fail cost it the holidays?

Photo: RetailWire
Nov 27, 2017
Tom Ryan

A credit card system glitch prevented Macy’s from handling credit and gift card processing both in-store and online from noon until early evening on Black Friday.

In addition to any lost sales on the day, Macy’s endured the wrath of social media and became retail’s lead story on Friday.

“Macy’s credit card system down nationwide,” Kenn White tweeted at 1:29 p.m. ET on Friday, according to Business Insider. “They are not informing shoppers standing in long lines. Getting ugly out there.”

“Hey @Macys just left $300 of items on counter because your credit card machines are down at State St. Chicago. Can’t even look up Macy’s account. What. A. Joke. #macys #blackfridayfail,” Meghan McCollough tweeted, according to Fortune.

“They’re down nationwide actually. I feel for the poor cashiers,” Nora Fogarty tweeted, according to Reuters.

Social media started populating with complaints from irritated consumers around noon eastern time and Macy’s began responding on its social channels after 1:00 p.m.

Management added associates to selling floors and some were able to put through card numbers manually, although many customers were told only cash payment was available. Customer service reps also were reportedly unable to provide assistance.

Shoppers trying to place orders on Macy’s website received the message: “We’re unable to verify availability of some item(s) in your order. Place your order now, and we’ll send you an email confirming availability and shipping when our system is back online, or please try again later.”

By early evening, Macy’s said it had “fully resolved” the situation, placing blame on a “capacity-related issue.” Macy’s said, “We highly value our customers and sincerely apologize for any inconvenience.”

Even though some reports downplayed the impact since it was the first official day of holiday shopping, a few felt a bad experience may lead less loyal Macy’s customers to avoid the retailer during the holiday season. Paul Argenti, a professor of corporate communications at Dartmouth’s Tuck School of Business, told CNBC, “I can’t think of anybody that needs this less than Macy’s.”

DISCUSSION QUESTIONS: Did Macy’s handle its credit card glitch as well as it could? Do you think it will impact Macy’s performance as the selling season progresses? What lessons should this incident offer retailers dealing with similar situations in the future?

Please practice The RetailWire Golden Rule when submitting your comments.
"Where is the back-up plan? Today, there is no excuse for this kind of hiding behind overcapacity."
"As someone who was stuck in line at Macy’s during the debacle ... the experience in-store was NOT a good one."
"It’s amazing what a 15% coupon and some acknowledgment can resolve."

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26 Comments on "Did Macy’s Black Friday credit card fail cost it the holidays?"

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Shep Hyken

There is no doubt that not being able to process a sale during the biggest selling opportunity of the year can be disappointing, to both Macy’s and their customers. It’s frustrating for both sides. Processing credit card purchases manually is an answer, even if it slows the process down. But that’s still a lot of lost business.

The big lesson is … Be prepared! What is the contingency plan for something like this? These scenarios must be played out in advance, so the retailer can deal with them if and when they ever happen.

Art Suriano

The credit card failure was quite disastrous. Even worse was the reason Macy’s gave for the cause; “overcapacity.” Today in a world that is dominated by technology and convenience letting customers know “we couldn’t handle the volume of business” is not something shoppers take lightly.

When you think about the sales volume other companies did on Black Friday, both brick-and-mortar and e-commerce such as Amazon, if overcapacity was the issue then shame on Macy’s for not being better prepared. Macy’s lost a lot of business Friday, and they will not get those sales back. I’m sure many happy customers will think twice before revisiting a Macy’s store, which is very unfortunate for a company attempting to do whatever it can to turn itself around.

Brandon Rael

The holiday selling season is a long one, and while this incident has created some frustration, along with the wrath of the social media networks, there is still plenty of time for Macy’s to recover and have an outstanding holiday selling season. Yes, in retrospect the incident could have been handled better, but this is certainly a learning experience for the company as well as the entire retail industry.

As we know, consumers are only so forgiving so it would be wise for Macy’s and all other retailers to ensure that they have the infrastructure and the right network bandwidth to support the incremental transaction volumes, and remove any friction from the shopping experience. The critical component here is to have contingency plans in place to avoid any incidents such as these occurring during the critical holiday season, and to provide a superior customer experience.

Dave Bruno

While this situation would be extremely challenging on any day of the year, having it happen on Black Friday complicates every aspect of the crisis by an order of magnitude. Judging by the reports I have seen thus far, it appears that Macy’s may not have been 100 percent transparent with their customers and, if true, that could be problematic.

In my opinion, in times of crisis transparency and authenticity are of utmost importance. Even if short-term sales are lost, if you are clear and transparent with people about the challenges you face, most people will understand, and most will forgive — if you don’t betray their trust. Not being transparent creates a great risk of betraying trust … and creating long-term issues.

Max Goldberg

As a society, we have come to rely on computers and electronics for many basic day-to-day functions. When the computers/electronics don’t work as expected, normality experiences a major hiccup. Macy’s responded as best it could. Many consumers were not happy, but that’s to be expected. With Black Friday becoming less important, this won’t have a major impact on Macy’s sales but, as Mr. Argenti said, no one needs this less than Macy’s.

Dick Seesel

“Overcapacity”? On Black Friday?? I guess Macy’s didn’t get the memo.

While I wouldn’t write off Macy’s holiday season based on this glitch, it’s certainly going to make customers skeptical about returning, especially on high-volume days. (And that starts with today, Cyber Monday.)

Charles Dimov

Wow — what a nightmare. Black Friday is such a crucial day for all retailers … this is just disastrous. This capacity problem emphasized the point that all retailers need ask their technology vendors tough questions about the load and scalability of their systems. From the comments about their inability to verify availability — this speaks to the order management system (OMS/DOM). It means more than one of their systems were challenged.

Frankly, Macy’s did not handle this crisis well. In-store staff should have communicated this to all shoppers, with rain-checks offered (come back later/tomorrow and we will honor the Black Friday price on your items). This is difficult to do in the frenzy of the moment — but it is the right thing to do to make the best of a very difficult situation.

In a year of tough retail data, Macy’s did not need this. Again, it goes back to my initial point. Retailers need to scrutinize their tech vendors much more aggressively. Ask the difficult questions!

Anne Howe

Another nail in the coffin. Where is the back-up plan? Today, there is no excuse for this kind of hiding behind overcapacity. How many shoppers do you think called it quits for good? I would have.

Michael La Kier

As both a long-time industry veteran, and someone who was stuck in line at Macy’s during the debacle, I feel qualified to comment on this.

The experience in-store was NOT a good one. First, the store layout remains a cluttered mess with poor navigation and too much inventory which overwhelms even the most hardy shopper. Second, a lack of communication deepened Macy’s problem. They relied on untrained cashiers to communicate with frustrated shoppers which made matters worse. Macy’s — as is the case with most department store retailers — does not have enough to differentiate themselves to keep shoppers loyal (especially after a #retailfail like this). This is a lesson to other retailers to have redundant and backup systems and to immediately communicate with shoppers (and, perhaps, even communicate with them after the fact).

Lee Kent

I certainly feel for Macy’s however I agree with others. Where was the backup plan? We all know these things can happen but we also know that we need to be able to serve our customers. For my 2 cents.

Neil Saunders

From our early consumer and retail data, this issue did harm Macy’s. For most retailers, Black Friday sales and transactions were up over last year; however, the relative rates of increase for Macy’s were less than for many of its peers. This was especially noticeable on Black Friday, the day of the outage.

The briskness of Black Friday trade this year may mask the issue, but there is no doubt Macy’s fell short of its potential. A great shame given the effort it put into Thanksgiving and Black Friday.

Paula Rosenblum

The worst.

Bob Amster

I don’t think we know the real reason for the problem so it is difficult to say if/how it could been averted. The longer-term impact on customers I believe to be negligible. Customers can forgive and I don’t think they take a card authorization failure as a condemnation of the retailer. It has happened to airlines too and people still fly them. It may have had a financial impact on Macy’s but, then, it was only the first day of a longer selling season.

Gene Detroyer

This is a hiccup on the trail of the demise of Macy’s.

Steve Montgomery

Macy’s failure to be ready to handle Black Friday volume is like landing at the airport and not having anyone in place to handle the jet bridge. There was plenty of warning the event was going to occur. How many Black Fridays does it take to alert Macy’s that their volume is going to spike?

People will not forget that they had the items that they wanted to buy only to be told, no you can’t because our system is down. They had planned to shop at a Macy’s, found a parking spot, etc. and then at the last minute were told, we won’t take your credit card, but we’re happy to take your cash.

As Dick stated, it is a long season and people might be willing to take a chance on Macy’s again during this season, but the sales that were lost on Black Friday will remain lost.

Camille P. Schuster, PhD.

The credit card glitch is just one more event in a series that indicates Macy’s inability to implement and manage technology as well as their inability to deal with consumers. For more than a year I have stopped shopping at Macy’s because their online system does not work well and their system for managing my credit card purchases does not work well. Their response to consumer problems has not been satisfactory for years. Now another major glitch — it is just more of the same.

Leo Archambault
2 years 4 months ago

Macy’s overall credit process is clogged with too many additional features. For example, every coupon you receive is recorded on your account. Even when their credit processing system is working, the sales process in the store gets slowed down to a crawl because of the savings coupons attached to each account. The clerk can spend up to 10 minutes during a transaction explaining to the customer which coupon is best. Their system of providing coupon savings to credit card customers is cryptic and time-consuming.

Also, prior to Black Friday, I was making a purchase in a Massachusetts Macy’s. I was behind a customer who wanted the best coupon option for her purchase. after 10 minutes the transaction was completed and then voided, because the clerk thought of another coupon that the consumer had on file that would reduce the price of the previous transaction. They need to rethink their credit sales promotions for transparency and ease of use.

Georganne Bender
This was tragic for both Macy’s and shoppers. The parade puts people in a feel-good Macy’s space, and in the mood to shop. We’re all hyped up about saving big on Black Friday and then this happens. God love Macy’s store associates because tired, cranky and put-out shoppers can be brutal. That being said, where was the contingency plan? I am sorry to say that I have been in too many chain stores when a technology glitch shut down the registers and store personnel had no idea what to do. (Indie retailers would pull out a cigar box to take your money and phone in your credit card number to save a sale.) I wish Macy’s management had reacted faster to let shoppers know what was going on; keeping it quiet only makes it worse. We all know how quickly negative word spreads over social media. There’s a lesson to be learned here: Every retailer needs a technology glitch disaster plan, coupled with sufficient staff training of what to do if — and when —… Read more »
Kenneth Leung

The holiday shopping season is a long one and I can’t see one day derailing the season. Yes it will hurt and if the retailer doesn’t do well it will be used as part of the reason. I wonder if something else is going on and where the failure is: POS? Link to processor, etc.? If the link to the processor goes down usually store point of sale can go in “offline” mode and just approve under a certain limit to clear the lines. The fact that both online and in-store went down is probably a worst case scenario.

Glenn Cantor
2 years 4 months ago

There would have been no way for a company like Macy’s to effectively notify their stores and customers about this credit card processing issues as it was occurring on Black Friday. Sure, they can apologize and they can even mail out more coupons. However someone, somewhere in Macy’s stores must have had earlier difficulties with their credit card processing system that would portend potential holiday season difficulties.

This is the kind of store-level issue for which there has to be a process in place to identify and properly address. As Macy’s is finding out, it is also the kind of thing that gets ignored by top management.

Seth Nagle

Not ideal but this is why you have a PR team and a stellar customer nurturing program. If managed correctly shoppers will look past this debacle as it’s a long holiday season.

It’s amazing what a 15% coupon and some acknowledgment can resolve.

Brian Kelly
2 years 4 months ago
I was in Macy’s-Woodfield on Black Friday. I didn’t experience the glitch. Black Friday shoppers tend to be different, aka “bottom feeders” and not representative of the balance of the selling season. So I do not think the “stink” will stick. What I did see at Macy’s is a greatly reduced promotional stance. We were there for the annual “Frango” giveaway, but the brand wasn’t on sale. We walked. While I did see lines at the cash wraps, overall traffic and buying was down to YA. Lesson? Make sure your systems are fully functional BEFORE you open. There isn’t any simple remedy for a credit-meltdown at an automated cash wrap. Manual transactions are impossible. Right now, a DTC campaign should be in the works to all credit card and loyalty members. I agree with Argenti. Once a legacy brand with relevance issues goes under siege, any miss is exacerbated. Walking Woodfield, there are plenty of options to Macy’s assortment. Without “coupon a go-go,” unique and relevant value is under severe strain. As Scrooge reminds us,… Read more »
Craig Sundstrom

I think Mr. Argenti speaks for America. As for how Macy’s “handled” this, it doesn’t really sound like they handled it at all … not that I’m sure response is a meaningful thing to measure since “not letting it happen in the first place” is what really matters. So the lesson to other retailers is pretty simple: “Don’t let it happen (to you) in the first place.”

Karen McNeely

I’m speechless. In a season where they could not afford any mistakes, this is a big one. I’m the director of a museum store which does under $2 million a year. We have a failsafe for if our credit card processing goes down, so it’s transparent to our visitors. That Macy’s does not is inexcusable and the timing couldn’t be worse.

Ricardo Belmar

This must have been a nightmare scenario for Macy’s — unable to process credit transactions on the busiest shopping day of the year! Declaring it a “capacity problem” however, is an unacceptable explanation. It is clearly masking what ever the real issue was, which in my opinion was a networking/connectivity problem in Macy’s store network. One that I suspect is sorely in need of upgrading at most of their stores. This situation reinforces why retailers need to have more than just “connectivity” at stores — they need to have systems that control and manage the performance of all applications in the store, including the POS, so that issues can be identified before they become customer experience impacting such as this event.

Min-Jee Hwang

This is beyond unfortunate for Macy’s. The news has been plagued with Macy’s stores closing down around the country and a healthy holiday season is a requirement for this department store. The last thing they need is lost sales when they have already done the hard work of getting shoppers to their site or stores and ready to buy. What Macy’s does to remedy this will determine how much of an impact it has. After all, a successful resolution can lead to positive word of mouth, instead of shoppers telling anyone who will listen about the negative experience they had. Preparation is key and there’s no going back in time to prevent this. Now the ball is in their court to find a way to soften the blow and move forward to make the most out of the holiday season.

"Where is the back-up plan? Today, there is no excuse for this kind of hiding behind overcapacity."
"As someone who was stuck in line at Macy’s during the debacle ... the experience in-store was NOT a good one."
"It’s amazing what a 15% coupon and some acknowledgment can resolve."

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