Fix: Customer Can't log in their account in Magento Store
Source Image: www.huffingtongpost.com
Following an upgrade to magento 1.8.1 on our development servers , we noticed that customers are unable to login to their account.
The issue is raising because the custom login form does not contain any form_key and there is a form key validation happening in loginPostAction of Magento.
Here is the solution:
Go to template/customer/form/login.phtml and template/persistent/customer/form/login.phtml and under
<ul class="form-list">
add the following code in the login form
<input type="hidden" name="form_key" value="<?php echo Mage::getSingleton('core/session')->getFormKey(); ?>" />
Here is a screenshot: http://screencast.com/t/wOLw4OcONA
If you are using the login form in different templates then you use add the form_key to the other parts as well.
I hope this helps.
– We are aware that this issue also exists while updating the qty of cart items, the same solution applies there.
– Previously there was two methods in this blog to fix the problem but editing core files goes against Magento development standards hence that has now been removed.

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