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Common Risks with Ecommerce (and How to Avoid Them)

by Sarah Bader | May 31, 2021

Ecommerce is booming. Online shopping has evolved considerably over the past several years, but it’s become an essential service in the wake of the global pandemic.

In 2020, reports estimate that retail ecommerce sales grew 27.6%, which equals $4.280 trillion in annual growth. Online sales are sometimes the core business model, but it’s also become a viable alternative for businesses seeing a decline in brick-and-mortar shoppers.

But along with the advantages, there are caveats to consider.

While an ecommerce platform may avoid the risk of customers stealing merchandise from the shop floor, there are a host of potential problems and risks that are unique to digital businesses.

These risks include the unlawful sharing of data, fraud, malware, and other security breaches, not to mention vulnerabilities related to working with third-party platforms, data privacy laws, online security regulations, and customer service issues.

10 Ecommerce Risks You Need to Know About

Ecommerce businesses are unique in many ways. Their focus is all about selling online, so it is absolutely critical that their site is secure, and their data protected in every possible way.

Any downtime at all can be disastrous and costly for an ecommerce store. Today’s online shopper will quickly move on to a competitor if they feel that the ecommerce store is not secure or if the customer experience (CX) is poor.

Ecommerce vendors have much to protect, but knowing the risks makes it easier to shore up the defences. As always, a reliable backup solution is imperative.

Though online backups won’t protect you from every possible ecommerce risk, they will give you some peace of mind and help you get back up and running quickly.

So let’s start by outlining the top 10 ecommerce risks and look at some actionable tips to help you solve them.

1. Data Privacy and Online Security Risks

Hackers are becoming more and more sophisticated every day. It’s easier for malicious actors to find their way into your systems from the inside, obtaining employee credentials through phishing, or by deploying malware and ransomware in fraudulent links in emails. The average cost of a data breach is around $4.24 million, but reputational damage could cost you even more.

Solution

The best way to avoid a data breach is to prevent it. Establish and enforce a strong data privacy and online security policy, train your staff, and incentivize them to become data security champions. Implement protocols like two-factor authentication (2FA) to add an extra layer of accountability.

2. Risk: Unauthorized Access

Not everybody needs to have access to all company files. Unauthorized access accounts for a significant amount of data loss. Sometimes it’s innocent, sometimes not so much. Fortunately, there is a lot you can do to prevent unauthorized access, and these strategies should be a part of your overarching data security posture.

Solution

Here are a few things you can to do prevent unauthorized access:

  • Restrict access. Employees should only be able to access files they need. For example, your content creators do not need access to your back-end code.
  • Implement two-factor authentication (2FA). 2FA gives you an added layer of accountability and prevents people from using login credentials that do not belong to them.
  • Use a single-sign-on solution. Single sign-on enables you to restrict and monitor access to company files.
  • Implement role-based access. Most file systems can be configured to restrict access by role or by credentials. Look for a single-sign-on solution that offers these features, like 1Password.
  • Change passwords regularly. Enforce password updates across your network to mitigate unauthorized access.
  • Revoke credentials when employees quit or are let go. Be diligent in managing credentials and revoke immediately when an employee moves on.

3. Risk: Exploitation of Vulnerabilities

Malicious actors are always standing by to take advantage of any vulnerabilities in your network. Unpatched software, legacy systems, and lax endpoint protection leave you open to attack.

Solution

Keep software, SaaS, and plugins up to date. Remove and uninstall incompatible plugins and themes immediately. Enable firewalls and virus protection—but don’t rely 100% on your device settings. Look into more comprehensive solutions based on your data protection needs.

Larger organizations might consider a periodic security audit or penetration testing to understand their vulnerabilities.

4. Risk: Human Error

We’ve all deleted a file or “lost” a folder at one point or another. Human error is still the most common cause of data loss and most of the time, it’s just an innocent mistake.

Solution

Deploy a backup and recovery solution like Rewind. Rewind online backups allow you to restore and recover quickly after an error, minimizing downtime and helping you get back to work faster.

5. Risk: Platform Downtime

Even the world’s most reputable platforms, like Shopify, BigCommerce, and QuickBooks Online, need to schedule downtime to update servers, security, and maintain their code. However, lengthy or frequent downtime will impact your productivity and reputation.

Solution

Do your homework and choose wisely. Look at what others are saying about the company, both through reviews and on user forums. Check comparison sites so you understand the pros and cons of each platform. Choose a company with a good reputation and high uptime.

This also extends to any third-party apps or SaaS you choose. Dependencies between apps could cause your site to lose functionality if an app were to fail.

6. Risk: Bad CSV Files

CSV files are a great way to upload high volumes of data quickly, but they don’t always work. The problem is, you often won’t know where the error lies. If you’re on a timeline, this can be a major problem, impacting sales and causing a great deal of stress.

Solution

Installing a backup and recovery solution won’t fix your bad CSV files, but it will help you get back to a pre-error state until you find the issue.

7. Risk: Non-Compliance

The regulatory framework for data privacy and protection is stringent—and comes with massive financial penalties for non-compliance. The risks are manifold here, as outlined in HIPAA, the GDPR, PCI, and other regional and international data privacy legislation.

Essentially, these policies state that if you do business online, you must adhere to their mandates. Data protection is serious business and if you continue to operate without regard, you are risking your business continuity.

If you are selling internationally, make sure your business follows the Organization for Economic Cooperation and Development’s ecommerce policies.

Solution

  • Be sure you understand your obligations under all applicable data privacy laws.
  • Do not assume that the GDPR does not apply to you.
  • Update your websites and online properties to ensure you are using current versions.
  • Fully vet and qualify all vendors as the question of who controls data and where it is stored may become an issue if there is a breach or complaint.
  • Ensure all third-party SaaS is compliant with international data privacy and security laws.

8. Risk: Incompatible Software or Plugins

We all rely on third-party SaaS to make our lives easier, but not all apps are created equal. You might read up on a solution and get excited about the possibilities, but if it’s incompatible with your platform, theme, or other apps on your system, you might be in for an unwelcome surprise when suddenly nothing works or looks as it should.

Additionally, new app companies go out of business at an alarming rate. The app might still work but if there is no support or updates, your ecommerce store might be vulnerable.

Solution

Use software plugins and add-ons from reputable vendors. Do your research before you deploy. Update and audit regularly to ensure there are no issues.

9. Risk: Poor CX

Customer experience (CX) is everything these days. If your site is slow to load, if visitors can’t find what they’re looking for, your site is difficult to navigate or understand, or if your content (images, descriptions, blogs, etc.) is low-quality, most won’t hesitate to click away—and they probably won’t return.

Solution

  • Invest time and effort into improving your website and store design.
  • Make sure your ecommerce store is responsive—meaning it is mobile friendly and looks and performs the same on any device.
  • Put your most popular products up front and create landing pages for all your ads.

Basically, the idea is to make it as easy as possible for your customers to do business with you. Good CX translates to loyalty, which means more sales. And that’s always the bottom line.

10. Risk: Loss of Premises Due to Disaster

Disasters happen, and they come in many guises. Fire, flooding, building collapse, electrical grid failure, power surges, internet failure—and the list goes on. Having the right protections in place will help you get back up and running so your ecommerce business can carry on.

Solution

Design and implement a disaster recovery plan (DRP) that covers every possible scenario.

Every company operates differently, so it’s critical to look at your business model and determine what makes sense for you. You can find DRP templates on the web to get you started, but these are just a jumping-off point. An effective DRP is a dynamic document that you’ll update as needed throughout your business lifecycle.

One significant aspect of any comprehensive DRP is cloud backup and recovery software. With your ecommerce store and all its data secured in the cloud, you can be confident that none of your vital data is lost, no matter what happens.

Mitigating the Risks

We’ve outlined many different scenarios and talked about ways to reduce the risks involved with running an ecommerce store.

Risk mitigation is an ongoing practice, meaning you can’t let your guard down for a moment. Today’s burgeoning threat environment is just one among many concerns, and none should be taken lightly. Smaller ecommerce operations tend to think that they aren’t attractive to malicious actors, but the opposite is actually true.

Ransomware targets businesses of all types and sizes. Cybercriminals often know that smaller operations are easier to gain access too—often because companies with only a handful of employees do not have or enforce a security policy or train their staff as to the risks of security threats.

Summing Up Today’s Ecommerce Risks and Advice

If you don’t want your company to be part of the statistics, take the necessary steps to protect yourself. Implementing the solutions outlined above will reduce risk, lower liability, and help you recover quickly if you do experience an incident.

  • Ensure your security protocols are updated.
  • Institute strong security policies around passwords and work devices.
  • Regularly monitor for suspicious or fraudulent activity.
  • Use security platforms and firewalls.
  • Design, implement and enforce a strong security policy.
  • Educate your staff on how to detect incoming security threats.
  • Implement regular security training sessions for all employees and contractors.
  • Work on your DRP and update regularly.

When looking to reduce risk, it helps to work with a company that understands the ecommerce environment and knows how best to mitigate any situations that arise. Whether you are a large company or a small business just starting out, protecting your ecommerce website and digital assets means you are also protecting your customers and their data.

Rewind is a leading provider of BaaS apps. Since 2015, Rewind has helped over 100,000 businesses back up their data on Shopify, QuickBooks Online, BigCommerce, GitHub, Trello, and more. Start your trial today.


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Sarah Bader
Sarah Bader is a content writer, tech enthusiast, and passionate supporter of the Oxford Comma. When she puts her pen down, she can often be found riding her bike around Ottawa or watching trashy reality tv with her dog (he’s a big fan).