Cracked Egghead Yields E-Commerce Omelet

Egghead.com now says that the credit card numbers that were in its system when it was hacked over the holidays were not stolen.

The bad news is that it took Egghead more than two weeks to assure its customers of this fact. On a scale of 1 to 10, this customer service disaster has to rate at least a 9.

Egghead issued a statement apologizing for "any inconvenience" caused to its customers, especially those who scrambled to cancel credit card accounts as a hedge against fraud. The apology seemed heartfelt, even if it's too little, too late. The cat is not only out of the bag, it's running for its life.

But guess what -- there's even better news. E-commerce will benefit from this latest hack. That's right. It's strong, nasty medicine for Egghead, but good for the overall industry.

Smart is Good

An old TV ad campaign for a clothing or furniture store carried the tagline: "An educated consumer is our best customer."

Nothing could say it better for e-tailers. Need evidence? Check out the recent survey of Web users from NPD Group on how the holiday shopping season went.

Consumers were happy, the survey found, even though many of them encountered at least one of the typical online problems: site outages, broken links, late shipments and failed businesses.

But here's the best part: Consumers knew those hassles might exist and adjusted their shopping habits accordingly. People bought items early. They made sure to visit a site soon enough in the shopping season so that they could always click back later if it was out of commission. And they had realistic expectations, one can assume, about the levels of customer service they would receive from busy e-tailers in an even busier season.

Spreading the Knowledge

Now, security is a whole different ballgame in many ways. People are not as forgiving when it comes to their credit card information being exposed to theft. That's just plain carelessness on the part of the e-tailer. And loss of trust is not easily fixed.

However, if we apply the education model to the Egghead situation, we're likely to see progress in maintaining trust in the first place.

Smart consumers -- not just those directly affected by Egghead or CreditCards.com, the other recent hack victim -- are likely to explore the options already out there to protect themselves, such as the growing family of one-use credit cards. Some may turn to alternative payment methods. Others may just be more judicious with their credit card information, handing it over only to the most reputable and trusted e-tailers.

While that may be bad news for some startups, think of how important it is to be able to say that those trusted companies exist.

In E-Commerce They Trust

A year from now, many consumers will have forgotten about Egghead's woes. But some will take the lessons from the event with them, and will become even better customers for e-commerce.

Best of all, smart customers can make even not-so-smart companies look good.

What do you think? Let's talk about it.