THROUGHOUT human history, retail was always one of the most important elements of our lives. We would barter, buy and exchange things so we could gain access to the things that we didn’t have. It made a difference in various aspects of our lives by allowing people to get seeds, animals, food, tools, or anything else they needed to make their lives easier and more comfortable.
E-commerce presents a new step in the evolution ladder of the retail industry. You no longer have to go to the physical stores to get what you need or spend hours looking for that 1 item you wanted. Now you can take a seat on your comfortable couch and find just what you’ve been looking for with a few clicks. Even better, you usually don’t have to wait a long time to receive the items, as most shops now offer fast or even next-day delivery. In recent years online shopping has been rapidly evolving at a faster rate than before, with an increase of 8% in 2020 and 30% in 2021. It is expected to reach $111 billion by 2024 and $200 billion by 2026. It would be impossible to imagine our lives without it. But where there are advantages, there will always be some disadvantages.
These are the most common dangers eCommerce businesses will most likely have to face.
1. Growing worries around data privacy and online security
The growth of the e-commerce business has also resulted in the increase in online danger they face. Cybercriminals and hackers decided to use this growth to their benefit as a successful attack can bring them a double gain. Not only do e-commerce businesses have access to financial data, but also to other sensitive and confidential data cybercriminals and hackers can use to perform other malicious actions. The consequences of this can be disastrous for the company. Not only will they have to face a significant financial loss, but the attack will also result in reputational damage causing long-term consequences. The best way of dealing with cyber attacks is to prevent them from happening by taking necessary security steps such as:
- Protect your devices
- Implement strong and strict security policies
- Use all necessary cybersecurity tools to protect your business
- Don’t store unnecessary customer data
- Raise cyber awareness
2. Platform downtime
The secret to the success of online shopping is its availability. Customers don’t want to be limited by the working hours of physical shops, which is why they prefer using online shops that are available 24/7. How likely would it be for a customer to return to your website after it was down when they were trying to purchase an item, especially with all the competition offering similar products? This is why you must ensure your platform doesn’t experience unnecessary downtimes that might impact your revenue. This is especially important for new or small businesses who still don’t have an established customer base as they are facing the higher risk of those customers never returning.
3. Online Disputes and refunds
One of the biggest challenges e-commerce businesses face are customer disputes and refund requests. Some customers might demand a chargeback or a refund due to logical reasons such as the product not matching the description or because the product never arrived, but often this can be a tool fraudsters use to steal your money. This can become a big issue for the company as they will lose the revenue from the sale while also having to pay the chargeback fee, and if this happens often, their bank might block their account as they consider it a high risk. While all eCommerce businesses should be preventing card fraud & chargebacks with specialist software, there are additional steps they can take to stay protected. Provide accurate product descriptions, ensure the merchant descriptor matches the business’s name, and use tracking numbers for every order to reduce chargeback risk.
4. The rise of credit card scams
Any business dealing with payments faces the risk of fraudulent transactions. Fraudsters can use your site to test out stolen credit card details, use stolen information to purchase products from your site, or even gain access to a user’s account and purchase products through it. All of these credit card scams will end up the same for the e-commerce business – with chargeback requests from legitimate card owners. You should always watch out for any suspicious transactions to protect your business and its customers. Ensure your business stays PCI compliant, use multi-factor verification, and implement proper cybersecurity tools such as device fingerprinting or phone lookup to minimize the risk.
5. Human factor
The human factor is still the most common cause of data loss, according to the 2022 DBIR Report (Data Breach Investigations Report). The human element is responsible for 82% of the breaches and 13% percent of them directly resulting from human error. This can range from losing a device or document, leaving a computer unlocked and unattended to using an unsecured Wi-Fi connection or even choosing simple and easy-to-guess passwords. Luckily, this danger to the e-commerce business can be prevented just by using a few simple steps:
- Organize cybersecurity training
- Restrict employees’ access to only files they need
- Use multi-factor authentication
- Implement password policy
- Ensure all devices are protected
- Back-up your files
- Educate your customers about account security
Conclusion
The popularity of eCommerce businesses will continue to grow as our online presence increases. This also means these dangers will not go away anytime soon, but that doesn’t mean we can’t do anything about them. To ensure your business remains safe, you need to ensure that risk mitigation becomes a part of your everyday business operations. This doesn’t only mean implementing solutions that will help you prevent them but also staying informed about any new dangers that might occur. Knowing your business environment and the risks you face will allow you to be prepared and quickly mitigate any situations that arise. The biggest mistake most companies make is staying dormant while everything around them is evolving from the market, competition to cybercriminals. If you don’t want your company to become a victim of any of these dangers, you need to ensure that you take the necessary steps to protect yourself, your customers, and their data.
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