6 eCommerce Risk Management Tips to Stay Secure

Thanks to the global pandemic, which saw many consumers shift to online shopping, the world of eCommerce retail is booming and continues to grow in popularity.

However, like all aspects of business, it possesses a unique set of risks that must be appropriately assessed and managed with the right eCommerce risk management practices before they become costly and potentially devastating.

By investing in and implementing practical, high-performing risk management software and solutions, you can significantly mitigate the impact of realized and potential risk, guaranteeing smoother business operations and overall success. 

eCommerce Risk Management Tips

Security Breaches

Online security breaches and cyberattacks are frequent and unwanted issues in the eCommerce industry.

Nearly one-third of all successful online hacking attempts are conducted on eCommerce sites. This statistic highlights the importance of constant vigilance and regular assessments to ensure customer data security, as any breach can destroy a business’s reputation and expose it to costly liability. 

A proven way to overcome security vulnerabilities is to add additional layers and use trusted security tools on your website. SSL certificates should be used for all transactions.

Additionally, you should also select to operate on a trusted and secure eCommerce platform using an object-oriented programming language and continuously monitor and assess your website and servers for suspicious or malicious activity. 

Non-Compliance

The regulatory standards for data protection and privacy are extremely strict, and non-compliance carries heavy penalties and legal repercussions. These risks are upheld by organizational, regional, and international data privacy legislation. 

Regulatory policies state that if your business operates online, you must protect the information of your own company and, more importantly, the sensitive information of your customers.

Ensure you are properly educated about all compliance and privacy laws that apply to you. Regularly update your websites and online platforms to current versions. Thoroughly assess all vendors used to ascertain who controls data collection and where it is stored.

Guarantee that all third-party SaaS comply with international data privacy and security regulations. 

Unauthorized Access

Not every employee needs to have access to all company files. Unauthorized access is one of the biggest contributors to data loss, whether done accidentally or on purpose.

Thankfully, there are multiple solutions to prevent unauthorized access, which should be part of your overall data security setup. 

These strategies include:

• restricting employees to only the files they need or work with;
• allowing higher management extended access as required;
• implementing two-factor authentication, which prevents any employee from using login credentials that don’t belong to them;
• changing passwords regularly;
• automatically revoking credentials to employees who quit or are fired;
• using single-sign-on solutions to better restrict and monitor access. 

Refunds & Client Disputes

Frequent refunds and client disputes have become a common and unwanted occurrence in the world of eCommerce. That’s mostly due to issues relating to incorrect product delivery, defective items, or customers being charged multiple times for the same product.

However, the more serious risk is when a customer goes beyond simply asking for a refund and proceeds with a ‘chargeback,’ which involves the payment provider reversing the funds from a business back to the customer. 

These processes are bad for business, primarily because the company loses the initial payment and is required to pay an additional fee for each reversed transaction.

Also, most banks set monthly chargeback limits, which, if exceeded, can result in higher costs and limited borrowing opportunities. 

To mitigate the risk of customers opting for chargebacks, ensure your business website has a clear and easy-to-understand return and refund policy. Prioritize top-quality customer service and implement strict policies that guarantee customer complaints are addressed and properly handled in a timely manner. 

Poor Customer Service

Customer service and satisfaction are the backbone of any retail business, particularly eCommerce.

When customers are satisfied with their shopping experiences, the chances of repeat purchases increase, helping your products reach more potential customers. 

However, should their interactions be overshadowed by rude, unprofessional, or unresponsive customer service, you risk damaging your company’s reputation.

Unhappy customers will not make repeat purchases, are unlikely to recommend you to people in their lives, and could turn to the internet to leave negative and damaging reviews of their experience on your business website and social media accounts, further affecting business operations. 

Quality customer service includes prompt response times, well-trained service agents who actively listen to complaints and resolve issues in as few steps and transfers as possible, and high-performing customer relationship management software that unifies and centralizes all customer and customer support communications. 

Currency Exchange Risks

If you are a global eCommerce business, you will need to manage transactions across multiple countries, each with its respective currency. Currency exchange rates are not static, and their constant fluctuations can put your company in danger of losing valuable profits or losing money on transactions themselves. 

You can reduce this financial risk by creating your invoices exclusively in one currency, which should ideally be your local currency.

Many modern payment platforms and software allow customers to pay in their own currencies and then convert the money into their chosen currency for a small fee. By ensuring your operational currency stays in one denomination, you can mitigate the risk of lost profits due to changing rates. 

Conclusion

eCommerce comes with its fair share of risks, but with the right strategies, you can safeguard your business and ensure smooth operations.

By following the eCommerce risk management tips we shared and using reliable tools, you can build a trustworthy brand, protect your profits, and create a seamless shopping experience for your customers.