The theft is the second-largest credit card breach in U.S. history, exceeded only by a scam that began in 2005 involving retailer TJX Cos. That incident affected at least 45.7 million card users.
Target disclosed the theft a day after reports that the company was investigating a breach. The retailer's data-security troubles and its ensuing public relations nightmare threaten to drive off holiday shoppers during the company's busiest time of year.
Christopher Browning, of Chesterfield, Va., said he was the victim of credit card fraud earlier this week and believes it was tied to a purchase he made at Target with his Visa card on Black Friday. When he called Visa on Thursday, the card issuer could not confirm his suspicions. He said he hasn't been able to get through to Target's call center.
On Monday, Browning received a call from his bank's anti-fraud unit saying there were two attempts to use his credit card in California — one at a casino in Tracey, Calif., for $8,000 and the other at a casino in Pacheco, for $3,000. Both occurred on Sunday and both were denied. He canceled his credit card and plans to use cash.
"I won't shop at Target again until the people behind this theft are caught or the reasons for the breach are identified and fixed," he said.
Customers who made purchases by swiping their cards at its U.S. stores between Nov. 27 and Dec. 15 may have had their accounts exposed. The stolen data included customer names, credit and debit card numbers, card expiration dates and the embedded code on the magnetic strip found on the backs of cards, Target said.
There was no indication the three- or four-digit security numbers visible on the back of the card were affected, Target said. The data breach did not affect online purchases, the company said.
Eric Hausman, a Target spokesman, said the company is continuing "an ongoing investigation."
Target hasn't disclosed exactly how the breach occurred but said it has fixed the problem.
Given the millions of dollars that companies such as Target spend implementing credit-card security measures each year, Avivah Litan, a security analyst with Gartner Research said she believes the theft may have been an inside job.
"The fact this breach can happen with all of their security in place is really alarming," Litan said.
Other experts theorize that Target's network was hacked and infiltrated from the outside.
Whatever the case, Jason Oxman, CEO of the Electronics Transaction Association, which represents the payments technology industry, said data breaches like Target's are generally "heavily organized and sophisticated."
Annual losses from global credit and debit card fraud are on the rise. Last year, it reached $11.27 billion, up 11.4 percent from the previous year, according to The Nilson Report, which tracks global payments. Even so, Nilson's publisher David Robertson pointed out that fraud still accounts for less than 6 cents of every $100 spent.
Target, which has almost 1,800 stores in the U.S. and 124 in Canada, said it immediately told authorities and financial institutions once it became aware of the breach on Dec. 15. The company is teaming with a third-party forensics firm to investigate and prevent future problems.