When Data Breaches Become Loyalty Programs: How $1.17 Billion In...
Posted on Dec 29
• Originally published at harwoodlabs.xyz
This settlement doesn't just compensate victims; it fundamentally rewrites the economics of data theft. And the implications stretch far beyond one Korean e-commerce giant's balance sheet.
That last point isn't hyperbole; it's the canary in the coal mine.
Traditional breach remediation focused on making victims whole through identity monitoring services, credit freezes, or modest cash payouts. The goal was restoration, not enrichment. Coupang's voucher strategy flips this model entirely. Instead of external costs that drive corporate behavior change, breach response has become an internal marketing expense with potential positive ROI.
Consider the twisted logic this creates. A successful data breach now potentially delivers:
For the company: Massive customer retention through store credit that can only be spent on their platform. Unlike cash settlements that flow out of the business, vouchers represent future revenue with significant profit margins built in. If historical redemption rates for promotional credits apply (typically 60-80%), Coupang may actually spend far less than the headline number suggests.
For customers: An unexpected windfall that exceeds typical shopping budgets. The breach transforms from violation to reward, creating a perverse form of customer satisfaction. Some affected users report feeling "lucky" to have been breached.
For attackers: A proof of concept that certain types of data theft can generate massive economic activity. While criminals don't directly benefit from corporate voucher programs, they now have evidence that some companies will essentially pay customers to stay loyal after being victimized.
This isn't theoretical. I've already seen discussions in security forums questioning whether other e-commerce platforms might "accidentally" discover they need to issue similar settlements. The suggestion is mostly joking, but the underlying recognition is real: we've created a model where data breaches can drive customer acquisition and retention.
The effects ripple outward in ways that should concern anyone building or securing digital platforms.
Source: Dev.to
