Russia Suffers Holiday Retail Nightmare as Cash Registers Crash

(Bloomberg) -- Russian retailers were left counting the cost of a holiday-season glitch that may have caused billions of rubles in lost sales after the failure of some internet-connected cash registers required by the government to cut down on tax avoidance.

“A retail nightmare came true today, when cash registers refused to work and sales stopped,” Dmitry Alexeev, head of electronics retailer DNS Digital Store, said on Facebook Wednesday. “Retailers across the country are cursing. What could be worse than losing the chance of trade in the days leading up to New Year?”

The crash affected about 9 percent of the market and cost companies as much as 10 billion rubles ($170 million) in lost revenue, according to Russian online retail lobby group AKIT. The company that produced the registers, Shtrikh-M, said in a statement that some of its machines failed to work properly on Wednesday and that technicians were trying to resolve the problem quickly.

Businesses that reported difficulties included Magnit PJSC, Russia’s second-largest retailer, which said some stores halted work for a time on Wednesday. Rosneft PJSC, Russia’s largest oil company, and Gazprom Neft PJSC said some of their fuel stations also halted sales temporarily after cash registers failed.

The government obliged retailers from July to use internet-connected registers produced by a range of companies, which transmit sales data to the authorities to improve tax collection.

The problems may have been caused by a glitch in the registers’ software and there’s no evidence that it was related to a computer virus, according to officials at two Russian cybersecurity companies, who asked not to be named as they’re not authorized to discuss the matter. 

--With assistance from Stepan Kravchenko

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net, Elena Mazneva in Moscow at emazneva@bloomberg.net.

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Tony Halpin, Gregory L. White

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