CNBC News Releases

CNBC Exclusive: CNBC Transcript: Target Chairman & CEO Gregg Steinhafel Speaks with Becky Quick Today on CNBC

WHEN: Monday, January 13, 2014

WHERE: CNBC's Business Day programming

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Target Chairman & CEO Gregg Steinhafel. Excerpts of the interview will run throughout CNBC's Business Day programming today beginning on "Squawk Box" (M-F, 6AM-9AM ET). Following is a link to the video on

All references must be sourced to CNBC.

BECKY QUICK: Gregg, thank you very much for taking the time to sit down with us. We appreciate it.

GREGG STEINHAFEL: Welcome to Minneapolis and--

BECKY: Thank you.

GREGG STEINHAFEL: --thank you for coming to Target.

BECKY: I want to go back to-- really recreate. Tell me what happened. When did you f-- first find out that there was a problem with the security breach?

GREGG STEINHAFEL: Let me just start by saying it's been a challenging time at Target. But throughout this period, there has been a singular focus on doing the right thing for our guest. And, so, we want them to know there's zero liability on their part and we're offering free credit monitoring to any guest that wants an additional peace of mind. Just as importantly, we want to make sure that our guests know that we're being accountable, responsible, and I'm personally very sorry that this whole event even happened.

BECKY: When you say that there's zero liability, what does that mean? Is Target paying for that? Are the credit card companies paying for that? The banks?

GREGG STEINHAFEL: Yeah, zero liability is zero liability, which means that Target is paying for any-- fraudulent-- any possible fraudulent activity on anybody's credit card. And we're providing the -- free credit monitoring service. So the guest has no liability whatsoever.

BECKY: One of the frustrations that I've heard from people, because obviously this impacted a huge swath of the American public, one of the frustrations I've heard from people is they've had trouble getting through on the call center lines. What are you doing about that?

GREGG STEINHAFEL: Yeah. The call -- center experience initially was unacceptable. And for that, I apologize for that. We had an-- overwhelming number of calls, as you can-- appreciate. But we've made fantastic progress since then. And as of Friday, our wait times were only eight seconds. So, we've worked around the clock to make sure that we added as much resources as we possibly could to reduce those wait times. But initially, you're exactly right. It was unacceptable and we apologize for that.

BECKY: Tell me again. When did you first find out about this? Was it a phone call? Was it someone came into your office? What happened?

GREGG STEINHAFEL: Yeah, let me put the—kind of the timetable in context. I found out on Sunday. Sunday was really day one. It was in the morning.

BECKY: Sunday. What was the date?

GREGG STEINHAFEL: Sunday, December 15th.

BECKY: Okay.

GREGG STEINHAFEL: And that was the day that we confirmed that we had an issue. And, so, our number-one priority was do the right thing for the guest. So, it was about making our environment safe and secure. We worked very hard on that. And by 6:00 at night, our environment was safe and secure. We eliminated the malware and the access points. And, so, we were very confident that coming into Monday, guests could come to Target and shop with confidence with no risk.

Monday was about—or the -- day two was really about-- initiating the investigation work and the forensic work. And we initiated that. That moved in and that has been ongoing. Day three was about preparation. We wanted to make sure our stores and our call centers could be as prepared as possible. And day four was notification. So, throughout that four-day process, to some people it probably felt longer than that, we worked around the clock to try and do the right thing, to be transparent, truthful, and then share what we knew as quickly as we could.

BECKY: Some people will say that it was a blogger who put out something on day three, December 18th, that pushed you to make the announcement on December 19th. Is that true?

GREGG STEINHAFEL: Well, part of that -- timetable all along was for us to make that announcement on day four. And we were working around the clock to try and get the right-- get-- to prepare our stores and to prepare our contact centers. I mean, you can appreciate we want guests that come in, once they hear that news, we want to be able to answer questions. And we want our call centers to be able to function appropriately. So, we were fully prepared to make that announcement-- on day four.

BECKY: Bill George, who is a former Target board member, also a professor at the Harvard School of Business, said, "This is a retailer's worst nightmare." Is it?

GREGG STEINHAFEL: Well, it's-- very challenging times for Target. I can tell you that. It's a real punch in the gut. But throughout this entire crisis, we've had a singular focus on really doing the right thing by the guest. I mean, we're a company that has been here for 51 years.

And we've focused on the guest. And we've made the guest our priority for that entire time. So, we knew that-- we know that our guest trust in us is shaken. But we also know they love our stores, they love our brand, and we're going to learn from this experience and work really hard to become-- even a better retailer-- over time.

BECKY: You talk about what this means from the shopper's perspective. And-- you recently put out some numbers that suggested that after this news first came out-- shoppers dropped off. They weren't coming into the stores frequently. They weren't-- coming in the same amount of traffic numbers. And they weren't spending as much money. Tell me a little bit about what the immediate impact is.

GREGG STEINHAFEL: Well, the immediate impact -- was pretty immediate. I mean, clearly customers were confused. They were frustrated. They didn't really understand. But we really want to assure them that Target's environment is safe and secure. So, there was an immediate dip. But over time, we've seen our business rebound back to almost normal, pre-breach levels.

BECKY: How big was the impact, let's say in the first couple of days after--

GREGG STEINHAFEL: Well, it was a pretty big impact. And we disclosed -- through 8-K last Friday-- some of the data around-- the impact of the breach.

BECKY: And since that time, you said that it had come back up. It was almost on the same levels. But on Friday, again, you did put out some more information. Did that impact shopping and trends on Friday, Saturday, or even today? I know it's early.

GREGG STEINHAFEL: Well, we don't look at it-- really-- as a day-- day-by-day basis. We know that we have to earn our guests' trust back. It's going to take a little time. There'll be some up and downs along the way. But we're in it for the long haul. We let our guests down.

There's no doubt about it. They have a lot of confidence and faith in our brand and they hold us to a very high standard. And we didn't live up to that standard. So, we're going to have to figure out how we can elevate our game. We're going to have to give better value, better experience, better service, more inspirational merchandise in our store. And we honestly believe that if we do all of that and we rebuild that trust, we will win back our guests sometime in the future.

BECKY: Gregg, I still don't understand what happened. What can you tell us? What-- how did this happen? What was the breach? I'm confused, and I'm a Target shopper, too.

GREGG STEINHAFEL: Well, we're in the middle of a criminal investigation, as you can appreciate. And we can only share so much. But as time goes on, we are going to get down to the bottom of this. We are not going to rest until we understand what happened and how that happened.

Clearly, we're accountable and we're responsible. But we're going to come out at the end of this a better company. And we're going to make significant changes. I mean, that's what you do when you go through a period like this. You have to learn from it and you have to apply those learnings. And we're committed to do that.

BECKY: What can you share? Was it a point-of-service situation? Was it an outside vendor? What happened?

GREGG STEINHAFEL: We don't know the full extent of what transpired. But what we do know was there was malware installed on our point-of-sale registers. That much we've established. We removed that malware so that we could provide a safe and secure shopping environment. This investigation is ongoing and it's going to take some time before we really understand the full extent of what's happened.

BECKY: Who do you think did it?

GREGG STEINHAFEL: I have no idea who did it. I think-- well, I hope that we find out in time. And we are working closely with law enforcement to try and determine who did it, when did they do it, and how did they do it.

BECKY: Do you think it was cyber terrorism? Is that fair to say?

GREGG STEINHAFEL: I don't really want to speculate. The one thing that I've learned throughout this crisis is share what you know, be honest, and don't speculate on what you don't know. And I just don't know that.

BECKY: Obviously, as you're going through and doing this, it's going to take some time. You were trying to tell people what you knew when you knew it. That information has changed over time. At first, it was the 40 million debit and credit card accounts.

Then, we found out the pin numbers could be-- accessible in some situations. And then, we just found out that you're looking at 70 million shoppers whose personal information, whether that be email, whether that be phone numbers, home addresses, some of that was compromised. How confident are you that this is everything that was compromised at this point?

GREGG STEINHAFEL: We're very confident that our safe-- that our environment is safe and secure. And we have no evidence that there's any other guest information that-- was removed from our-- environment. As you said, we-- we've tried to be transparent and timely in our communication.

And, so-- initially, in the forensic investigation, we were informed that pin data was not at risk. And, so, we -- seeded along those assumptions until the investigation informed us that pin data did leave our environment. And we immediately disclosed that.

So, as we have learned more, we have been truthful and timely in all of that communication. I mean, that's the heart of Target. That's part of our value system. And we take that very, very seriously. So, we've wanted to be as truthful as we possibly can and share what we can, recognizing it's an ongoing criminal investigation.

BECKY: I can completely appreciate that. But I can also say, as a Target shopper who was here during that time period and used my own credit and debit card-- it just makes me wonder. Is there any more information that could be stolen? Or is this all the -- it just makes me wonder is there something you're going to find out next week or the week after?

GREGG STEINHAFEL: Well, I can tell you this, Becky. You and all of our guests have been our number-one priority. And we have been-- as aggressive as we can to try-- and notify you that. Clearly, we are accountable for this. We're responsible for this.

And I can't tell you how sorry that we are that this happened to you or any one of our guests. And we're going to have to learn from this. And we can't speculate on what we don't know. But we believe in our heart. We know in our heart of hearts, our environment is safe and secure. And everything that we've learned as it relates to guest data, we've disclosed. And we don't believe that there-- and there is any other -- evidence that speaks contrary to that.

BECKY: If I'm someone who did shop here, and I am, who shopped here during that time period, I've been monitoring my account. I've been looking for anything along the lines. I just wonder-- what percentage people actually have had their information, what percentage of that 40 million and the 70 million. Do you add those two numbers together, the 40 and 70? Or is—there a lot of overlap?

GREGG STEINHAFEL: Well, there is overlap. But I can assure you that from a guest standpoint, there isn't any number that's acceptable. It's unacceptable if the number is one, right. So-- but we've -- we're trying to be proactive. So, it's zero liability for the guest. It's free credit-monitoring services.

It's notification by email, where we have the notification. It's working with law enforcement and other social-- service agencies-- we've already taken down 15-- 13-- phishing sites. So, we're actively involved in trying to educate the consumer and take down fraudulent-- activity. And we're providing tips along the way. Monitor your--

BECKY: What kind of tips?

GREGG STEINHAFEL: --well, monitor your account. If you have concerns, change your pin number. Ask for a card to be reissued. So, if there's any concern, there's some things that you can do as a consumer.

BECKY: I can monitor my account. But what-- how can I know that someone hasn't done one of these phishing sites and set up an alternate identity and is using a credit card they've taken out in my name -- somewhere else that I'm not going to find out till down the road?

GREGG STEINHAFEL: Well, you know, we don't know. But what we're really trying to do is educate the guest. And we're trying to be super transparent and make-- transparent in making sure that our guests, there are no liabilities for anything related to this fraudulent activity, whether it is-- happened now or down the road. We think credit monitoring helps. We think the tips. We think taking on the phishing sites. We think all that in combination. And I think just the awareness of the consumer is going to help a lot.

BECKY: What's to say-- I mean, you're offering crediting-- credit monitoring for a year. What's to say at 14 months from now I'm safe? What-- if my information is still the same and hasn't changed, what's to say that somebody doesn't rip me off down the road, even after a year from now?

GREGG STEINHAFEL: Well, I think that -- if you look at some of the tips, if you have an concerns whatsoever, change your pin or request a new card. And that really restarts the clock again. And we will send you a new card. If you want it expedited, we'll do anything that we possibly can do to alleviate future concerns.

BECKY: What have the banks and credit card companies said? I mean, normally my credit card company would be the one who's responsible for picking up-- fraudulent charges that would show up. That happened to me right before this, too. What's J.P. Morgan had to say about this? What's Wells Fargo had to say? What's -- what do Visa and MasterCard have to say about it?

GREGG STEINHAFEL: Well, again, we're in the middle of this investigation. And we haven't-- got to the end of the time -- table. But there's a process that plays out. And the issuing banks work with-- networks and processors. And ultimately, we're responsible and we're accountable for this. There's no doubt. And, so, we will incur the losses associated with that. And there'll be package and aggregated and brought to us.

BECKY: How big do you think those charges could be? I mean, from one perspective is the shopper's--


BECKY: --perspective. The other is the investor's perspective. What should investors expect down the road? How big of a problem will this continue to be?

GREGG STEINHAFEL: Well, the liability is going to play out over time. We know that from prior breaches. And, so-- we don't have a time table and we really don't have-- amount. What we're focused on is running the business and taking care of the guest. That is the priority, is to win back those shoppers, invest in them, and make sure that we can rebuild the relationship and the trust that they-- that we want them to have in Target.

BECKY: In your 8-K, you disclosed that sales dropped off, but had been-- started to pick back up, at least in the last several days. You also disclosed some information about the Canadian stores. The problems there are much bigger than a lot of investors had expected. Is that because of weather? Is it one-time charges? Or is this going to be a continuation? Because there are some investors who say, "Hey, this has been much worse than we had anticipated over a number of quarters."

GREGG STEINHAFEL: Yeah. We are still highly confident that the right long-term strategy of going to Canada is correct. The trade areas are fantastic. We've invested in new stores. We have hired 20,000 team members. We had a record opening number of stores in Canada.

We've never opened 120 stores in the history of Target. We opened 124 in Canada this past year. The business started softer than we expected. There is no doubt about it. And we've been focused on clearing out of that excess inventory. We're--

BECKY: Was it the wrong inventory? What happened?

GREGG STEINHAFEL: It was too much of the right inventory. So, we-- we're big believers in the long-term potentials of the market. And we believe that the trade areas can support the stores where they are. But there's a lot of variability in our business in any new store when we first start out.

There was just more variability in Canada. And because of all the hype and excitement about Target coming to Canada, we wanted to make sure that we captured every sale and we just overdid it. And, so, we have to-- we have to work through all of that inventory, which is what we're doing right now, kind of reboot that plan, and then we're going to grow from there.

So-- we're trying to enter 2014 in a good inventory position. That's our goal. And then, we really want to strengthen the business over time. The good things that we've seen in Canada is we have a fantastic team and we have a guest that loves our home and apparel. That part of our business has been fantastic. So, they're very style-conscious consumers up there. So, we love that. Our big challenge is going to be how do we break their weekly shopping habits to other retailers?

And, so, it's that frequency business and it's that weekly trip that we're going to really work hard to try and get that conversion to Target. Now, we announced when we went to Canada, we gave all of our competitors a two-year notice. (LAUGH) So, in that last two years, they've upped their game. They've cleaned up their stores. They've added more service. They've lowered their prices. And they've-- strengthened their loyalty program.

So, the Canadian consumer is winning big because of Target coming to Canada. So, they got better. We're going to have to get better. And that's what we're focused on in Canada. It's running a great retail operation. And we're committed to do that. And we're very confident in the long-term outlook.

BECKY: Long term, does that mean next year--


BECKY: --things will look good a year from now?

GREGG STEINHAFEL: -- long term is a three-to-five-year program. I mean, this is going to have-- a ramp up. But we're very confident that over five or seven years, we're going to meet the market potential.

BECKY: Five to seven years from now, or five to seven years from a couple years ago?

GREGG STEINHAFEL: Well, five to seven years from the starting point of l --year when we first started the market entry.

BECKY: If you take a look at Red Card, that has been-- a really strong-- category that you've introduced. It's been a great--


BECKY: --way to bring people in, use loyalty. But you -- also disclosed that because of these data-breach issues, you have some concerns about what happens there. My guess is shoppers may look at that and say, "Wait a second. Do I really want to give Target all of my information when they've had this problem with it?" How does the data breach impact Red Card?

GREGG STEINHAFEL: The Red Card product is something that our guests love. And we have grown that penetration. And it's a key strategy for it. Because our guests get five percent off every shopping visit that they come. So, it's simple. It's powerful. It's easy to understand. And, so, they love it.

They also love shopping in our store. Initially, it shook their confidence a little bit and we did see a dip. And then, it's rebounded back. And it's almost back to the same level that it was pre-incident. So, I think it was very understandable that they were-- they were frustrated and they were concerned initially.

But it's a really powerful product. And we've really hard to communicate with our Red Card holders. So, we're sending out notifications. We're telling them they're not liable. We're telling them about the free monitoring. And as we've added more of those reassurances and reinsurances, they've said, "Oh. I get it." And we've seen the-- we've seen the uptick.

BECKY: Going back to the banks-- the banks dealt with this in very different ways. My bank, PNC, has told me, "Don't worry about it. Just watch your account and tell us what happens." Then, you had-- J.P. Morgan Chase, which was putting limits on how much people could spend. Has that been frustrating for you? And what has your interaction been with the J.P. Morgan Chase versus some of the others?

GREGG STEINHAFEL: That-- that's a good question. And every bank has taken a little bit of a different approach. And as we thought about that and what should we do on our own Red Card-- we sat down-- we came down on the side of the guest. We said, "Let's not-- let's not make a decision for our guests. Let's give our guest choices."

And I think different banks have -- different things. So, if you're concerned, change your pin. If you want a new card, we'll give you a new card. If you want it expedited, we'll do that. So, we came down on the side of let the guest decide what's best for them. And in some cases, the guests are like, "This is no big deal. I'm not affected." And in other cases, there's banks that are reissuing.

Most of the industry came down on choice, like we did. And J.P. Morgan and a few others took a different approach. I don't think any approach was wrong. I think everybody is just really well intentioned to try and do the right thing. We just put guest at the center of everything we do and we just thought choice was right.

BECKY: Did you get frustrated by J.P. Morgan's approach to this whole issue? Because it made a lot of consumers made who were caught in the middle of the holiday shopping season, or when they were traveling, or when they had issues that came up and they couldn't use their cards, and the backlash all comes to Target.

GREGG STEINHAFEL: No, I mean, we're accountable. I mean, clearly we're accountable for what happened and we're responsible for that. So, it's not up to us to-- you know, to decide what policies are correct for any financial institution.

We want to do the right thing. I mean, that-- that's been the history of Target. It's been the 51 year of this-- company. It's been do the right thing and support the business and support-- partners the way that they want the business to support it. And that-- that's our approach.

BECKY: There's a lot of confusion out there with consumers, I think. When you hear from numbers like 40 million, and then 70 million, and maybe you add those up and you get to 110 million. How many people have actually seen fraudulent activity on their accounts to this point? I-- because I know about five people, personally, who have had it happen.

GREGG STEINHAFEL: You know, I can't speak to what the other cards have seen. But we have seen almost no fraudulent activity on our Target Red Card. But again, I come back to the priority is on the guest. Every guest, whether you're a Red Card holder or a non-Red Card holder will have zero liability and the free credit monitoring. So, we want to make sure that it's crystal clear out there that regardless of where you shop or what card you have, there's no liability on your part.

BECKY: -- almost zero-- on the Red Card? Because-- I've read reports that suggested that the number of these-- credit and debit accounts that are out there on the black-market websites-- increased by ten to 20 times right after this announcement.

GREGG STEINHAFEL: Well, we have three credit card products in our Red Card portfolio. We have a debit card and a proprietary credit card. We've seen zero activity on those cards. And we continue to monitor--

BECKY: Not a single person--

GREGG STEINHAFEL: Not a single person--

BECKY: --whose had information--

GREGG STEINHAFEL: --that we are aware of. Not a single person. Now, we have some very low-level activity on the Legacy Target Visa card. That's the only place that we've seen anything to this point. But, again, this is ongoing. We're going to continue to monitor--

BECKY: But I know-- like I said, I know-- at least five people who had incidents that came up and they're tying this back to Target. Is that incorrect?


BECKY: No, not on a Red Card. One was on an American Express. One was on a Visa.

GREGG STEINHAFEL: Right. I'm only addressing the Red Card portfolio. I can't address any of the potential fraudulent activity that happened in any-- other accounts. We don't get access to any of that-- information.

BECKY: But that makes it sounds like there's nothing that has led to fraudulent activity from this. I-- is that what you're suggesting, or?

GREGG STEINHAFEL: No, I'm not -- I'm not suggesting that at all. There is clearly some fraudulent activity. I think the important thing is regardless of what the fraudulent activity is, and-- that may change over time, there is zero liability for the guest. Zero. I mean, we are responsible. We're accountable for all of it. And we want to make that crystal clear to everybody that's shopped in our store. They have zero liability.

They get the free credit-monitoring services. We're working on notification. We're giving them tips. We're working with law enforcement. We're trying to do everything we possibly can. But the key thing is it's zero liability for any guest that was impacted.

BECKY: Has anyone in your family been impacted by this? Were-- was anyone in your family shopping at Target over that time period?

GREGG STEINHAFEL: Well, we -- I shop at Target, my (LAUGH) family shops at Target all the day-- all the time. And I have a Target Visa program. And I've seen no fraudulent activity on my or my family's account.

BECKY: Has anyone, friends or family, come back and complained to you, like, "Hey, wait a second. I shop there"? What do you tell them?

GREGG STEINHAFEL: I-- I've had none of that. I've-- I think what--

BECKY: No one's come up to you and said--


BECKY: "--Wait a second. I shop there"?

GREGG STEINHAFEL: Well, no. They come up and they shop there and they say, "Can you explain what happened?" And I think--

BECKY: Yeah.

GREGG STEINHAFEL: --I think there's a lot of misinformation and there's confusion of the -- frustration. And that's understandable. So, what we're trying to be is we're trying to be as clear as we possibly can. This is what happened. This is what didn't happened. And here's some tips. If you have any concerns whatsoever, change your pin.

BECKY: What didn't--

GREGG STEINHAFEL: Get a new card.

BECKY: --happen? What are some of the big misconceptions that you hear from people that you have to set them straight on?

GREGG STEINHAFEL: Well, I think there was-- misconceptions as it relates to pin data, for example, and when we-- when did we hear about it, or when did we not-- hear about it. And-- you know, it's just everybody kind of interprets the story a little bit different. So, we've tried to be very transparent and very clear in terms of what we know happened and what we didn't know what happened.

BECKY: Neiman Marcus just came out and said that they were-- hacked into as well--


BECKY: --that they had a data breach. We've just heard another story that suggests at least three other smaller retailers were hit at about the same time. And there are some security experts who think it might all be related. Do you think it's related?

GREGG STEINHAFEL: You know, I don't know that it's related. But I do think there's a better way. In the United States, we're using mag-stripe technology. And that's old technology. And-- there's a better way and it's called EMV technology.

BECKY: Is that the chip?

GREGG STEINHAFEL: And that's the chip technology that's very pervasive. And it's a well-established standard globally, throughout the world. And we think it's time for America to make that commitment to get to that standard. There's been some discussion about end of 2015.

We think it's important that we get there as a nation. And we want not only to participate in that conversation, but we want to lead in that conversation, too. We think it's really important that we have safe and secure environment. And that EMV chip technology is the right technology. And we should adopt that.

BECKY: Target used to use that technology in the past. What happened? Why did you stop using it?

GREGG STEINHAFEL: We had that technology over ten years ago. And-- we were ahead of our time. We were trying to set the trend that -- to say, "This is where the industry needs to go." And we were out front of the industry. And the industry didn't -- follow. But I think the industry is ready now. So, I think we're ready to have a different conversation.

And I think the-- based on the sensitivity of what happened at Target and other-- retail institution, I think that-- I think we're at a different time. And I think the fact that this is such a well-established standard globally, I think we're ready to move.

BECKY: Why didn't it get adopted before? Is it more expensive? What was the problem with it? 'Cause it's picked up in Europe. It is the way Europe does it.

GREGG STEINHAFEL: It is the European standard. But you have to-- this is one of those where it takes a village. Everybody has to participate, all retail, all networks, all financial institutions. Everybody has to participate in making this the national standard. And we tried to take a leadership position and there wasn't enough of the village that came along at that time.

BECKY: Where was the holdup? Was it the banks?

GREGG STEINHAFEL: You know, I'm not exactly sure. I don't recall specifically what the holdup was. But I think the-- where we are today, I think that conversation is going to be far different. I think everybody's going to be far more receptive. Because they're seeing a vulnerable-- the vulnerability of the system. They see that the technology that's being used today is analog technology and we're operating in a digital world.

And other countries have moved ahead of us. America should be the leader in this kind of technology. We shouldn't be following everybody else. We should be at or-- the global technologies. So, I think the time is really right to take a leadership position and move forward.

BECKY: I have to admit that this has my friends and I all thinking about just the safety and security of the system overall. Is your money safe in the bank? Are you safe making transactions? Are you safe using your card anywhere? My guess is you've been having those same -- kinds of conversations inside the board room, inside-- your offices with your staff. What do you think about the state of our security right now?

GREGG STEINHAFEL: Well, I can tell you that we are highly confident that Target's environment is safe and secure.

BECKY: Not just Target. I'm talking beyond that. I'm talking about-- America overall. I think your concerns about moving to the chip probably show that you do have some concerns about--


BECKY: --where we stand.

GREGG STEINHAFEL: --well, I think what we've seen is vulnerability in our system. And I think if we are proactive and really engage and move it forward, we can accomplish this. We can accomplish anything. We're a nation of prosperity and we can solve any problem if we put our minds to it. So, I'm very optimistic that we're going to get everybody to the table and we're going to move forward in this -- chip technology. And by the end of 2015, this will be the stand in the U.S.

BECKY: I've talked to bankers who will tell you off the record that-- they get these kind of attacks, these cyber attacks, pretty consistently, constantly. They are constantly getting hit, sometimes multiple times a day. My question is if some of those guys have started looking down the chain at other places, the bankers are spilling-- spending billions trying to protect us.

They have some frustration, saying that this is a job that maybe the government should be stepping in and doing. Because sometimes, it is foreign governments who are leading some of these hacks and some of these attacks. What do you think about that entire argument?

GREGG STEINHAFEL: Well, I think this is an all-in effort. I think this is a public-private-- kind of a relationship where we have to collectively work together in a collaborative way to make this work.

BECKY: Gregg, I want to -- just go back to this again. When did you first find out what happened? Did somebody call you on the phone? Did somebody walk into your office? Who told you?

GREGG STEINHAFEL: You know, I was-- I was at home. It was a Sunday morning and I was having coffee with my wife. And I remember it. I remember it distinctly. Because I got a call. And upon that notification, I mean, my heart sunk. I mean, I -- it's hard for me to describe the feeling that came over me.

I mean, I was devastated. I mean, how could this-- this happen-- to Target? And-- it was really a moving moment for me. Because we're all about the guest. We're all about the trust and the relationship. This is what we've built the franchise on.

And to have something like this happen was really-- was-- you know, was really-- it was really moving to me, and still is. I mean, I'm still shaken by it. But I will tell you it increased my resolve to say, "We are going to put the guest first and continue to make the guest the number-one priority. And this particular incident is going to be my number-one priority." And it has been some-- since that time.

And I will also tell you that I'm really proud of the way the Target team has responded. Since that confirmation, we've been all in. This team has worked seven by 24, around the clock, Christmas Day, you name it, everybody's been all in-- throughout the organization. And while we're not proud that-- that it happened and we're deeply sorry that it happened and accountable for it, I'm super proud of the way the team has responded.

Because we've lived up to our internal value system of be honest. Tell you-- what you know and what you don't know. Be truthful and be timely in the communication. That's been the lens. That has been the-- that has-- the way that we have looked at this from the very beginning. So, I'm proud of the way our team has responded.

Did we let the guests down a couple places along the way? Absolutely. And again, I'm-- I can't state enough how sorry I am that that happened. But this team is all in to make it right. We are not going to sleep until we get it right and we regain the trust of our guest. And we're going to be better as a result of this. We're going to be a better retailer. We're going to be a better thought partner-- over time.

BECKY: There was a lot of frustration, particularly when this first happened. I saw some angry blogging comments. I saw-- people interviewed, man-on-the-street type of stuff, talking about it. Have you had one-on-one-- face-time situations with-- customers, where you're trying to explain -- what happened, where you're on the phone with them? How much interaction have you had with the-- with the shoppers?

GREGG STEINHAFEL: No one screens my email. (LAUGH) So, I have read every single email that has come to me. And it has-- as you described, it has run the gamut of emotions, from, "I'm with you, Target. I-- I'm with you. I trust you. I know this is a criminal act against your company, your team, your guest."

And I've had the other side of that equation, too, where there has been some-- fairly poorly chosen words to describe-- Target and myself. And I read every one of them. And-- I understand they're upset. They're frustrated. And they have every right to be. And we have to do everything possible to make it right by every guest and earn that trust back.

BECKY: Have you had sleepless nights since then--


BECKY: --I guess?

GREGG STEINHAFEL: --sleepless nights.

BECKY: Do you feel like you're starting to come out the other end? Do you feel like there's still a lot of work that has to be done?

GREGG STEINHAFEL: Well, I think there's still a lot of work to be done. We're in the middle of this criminal investigation. It's going to continue to take-- some time until we really understand what happened, how it happened, and all that. So, we're committed to make sure that we get to the bottom of this and we really thoroughly-- understand it.

Then, we're going to apply those insights. We're going to apply those learnings to our business. And if we can share those insights with others, we'll be glad to do that, too. But we have to-- we have to get better from this. We have to learn from this, and that's our commitment.

And then, we're going to work hard at rebuilding the trust with our guest, short term, medium term, long term. We're laser focused on the guest. And we want to make sure that over time, they understand how important they are to us.

BECKY: You've mentioned the criminal investigations. Both the Secret Service and the Department of Justice are looking into it. Is there anything you can tell us about either of those investigations at this point?

GREGG STEINHAFEL: Well, I can tell you that working-- we are working in partnership with them to try and determine what happened and who did this. And that's all I really know at this-- at this time.

BECKY: Okay, great. I think that's fantastic. Gregg, thank you for being-- so open with us. We appreciate it.

GREGG STEINHAFEL: You're welcome. I mean, it's an event that really has hurt everybody, right. And we're a great company. And we're going to continue to do the right thing. We have our -- my sincere commitment that -- you know, we're all in on this and we're going to make it right with every guest that brings anything to our attention, whether it's today or in the future. That's what we do at Target.

BECKY: Okay.

GREGG STEINHAFEL: We are that kind of company. We are that kind of team.

BECKY: Thank you for your time.

GREGG STEINHAFEL: You're welcome.

BECKY: I appreciate it.

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