A newly discovered vulnerability on Sears.com could have allowed attackers to raid the retail giant's gift card database.

Alex Firmani, owner of Merge Design and a researcher, this week revealed a major security hole on Sears.com that could allow an attacker to easily steal valid gift cards -- a heist he estimates could be worth millions of dollars. Firmani says he alerted Sears about the flaw, and that Sears has since "plugged" the hole by removing the feature that let customers verify and check their gift-card balances.

The vulnerability was a business logic flaw in a Web application that handles gift card account inquiries; Firmani was able to stage a brute-force attack that could grab all valid, active Sears and Kmart gift cards from the company's database.

Firmani says the site wasn't auditing verification requests, which allowed him to verify gift card and PIN combinations using a homegrown PHP script that automatically submitted the requests. "I wrote a PHP script to hammer their verification server. It happily replied with thousands of verification responses per minute," he says.

The Sears application relied on client-side cookies to halt brute-force verification attempts, which Firmani says wasn't effective. "They should know where the verification requests come from, log them all, and be able to disable the verifications when they have a malicious attack," he says. "It doesn't appear to me that they had any server-side control over how many verifications were done."

Jeremiah Grossman, CTO of WhiteHat Security, says this type of flaw is probably fairly common on retailer Websites. And unlike a cross-site scripting or SQL injection bug, this business logic flaw is different: "It basically lets an attacker defraud Sears.com directly," Grossman says.

Firmani's discovery came on the heels of reports of multiple cross-site scripting (XSS) vulnerabilities on Sears' Web pages that were abused by an attacker to deface the Website.

"I thought this was notable with Sears being a Fortune 50 company," he says. "I have not tested many other large retailers, but I would hope most of them take better care than this. For smaller sites that write their own gift-card verification code, I'd expect just as many are vulnerable."

Firmani, who says he discloses Website flaws to site owners in order to highlight common Web application security issues, suggests that Sears require a valid user account login before allowing a verification request to be sent. "You could then record the number of verification requests and lock out any offending accounts automatically and without relying on client-side cookie," he wrote in his disclosure paper. "Recording requests server-side would be a more reliable way of handling repeat request offenders."

Another option is recording to a server-side database IP addresses of users verifying their gift cards, he said, as well as using a "number-used once" scheme in the verification form or logging all verification requests and using a script to shut down the response server if more than a specifically designated number of requests arrive per minute, he said.

"Security these days is less about what version of Apache you're running and more about custom-written Web applications. With Web apps given unfettered database access, it becomes a simple matter of exploiting less-than-solid Web application programming," Firmani says. "Finding holes in home-brewed Web app code is much easier than exploiting a root-escalation bug on a Linux server, but both often have similar database access."

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