Common Risks With Ecommerce (And How To Avoid Them)


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 like Magento 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, security regulations, and customer service issues.

Risks and Vulnerabilities

  • Breaches to Online Security, Privacy, and Fraud: Hackers are becoming more and more sophisticated every day. Breaches and attacks include phishing attacks, malware, and email spam. The average cost of data breaches is around 3.86 million USD, but the damage to your brand’s reputation could cost you even more. Customers want to believe their personal information is safe and secure. Once hackers have your customers’ credit card information, it’s easy for them to use that information to make purchases on your site. Malware attacks, known as ransomware, lock users out of their store and often delete data unless large ransoms are paid. From a less technical perspective, there is always the risk that a disgruntled employee or rogue contractor will alter or delete your data.
  • Downtime: Every ecommerce business has to consider the risk of their site crashing. You may think because you use a third-party platform like Shopify, you are protected from this issue. But even Shopify sites run the risk of experiencing downtime. To protect your business, be very picky about your hosting and software solutions. Do your research and pick companies you trust with good track records. Make sure you have a solid data backup strategy in place so that if something goes wrong, you can restore the data needed to get your store up and running again.
  • Digital Regulations: There are some things you have very little control over. When there are changes to online retail regulations or data protection compliance laws, your ecommerce store could be at risk. Be sure that you are securely storing your customers’ PII (personally identifiable information) in accordance with your local laws. If you are doing business in multiple jurisdictions or states, make sure you understand all of the rules and regulations that apply. If you are selling internationally, make sure your business follows the Organization for Economic Cooperation and Development’s ecommerce policiesYou will also want to stay current on any changes to ecommerce laws and policies. Our friends at BigCommerce put together an excellent round-up of ecommerce news sources here.
  • Customer Disputes and Returns: There are bound to be issues affecting your customers. Perhaps they never received an order, or their credit was double charged. These can be harder to address in the digital space. The same goes for product returns, as they increase your supply chain costs. It also becomes challenging to resell the goods at the same price. Excellent customer service helps mitigate some of these issues, but not all of them.

Mitigating the Risks

Ensure your security protocols are updated and institute strong security policies around passwords and work devices. Regularly monitor for suspicious or fraudulent activity. Use security platforms and firewalls, and educate your staff on how to detect incoming threats.

When looking to reduce risk, it can help to work with a company that understands what could happen in an ecommerce environment and knows how best to mitigate the situation. Whether you are a large company or a small business, protecting your ecommerce website and digital assets means you are also protecting your customers and their data.

Rewind is the leading provider of BaaS apps. Since 2015, Rewind has helped over 80,000 businesses back up their data on Shopify, QuickBooks Online, BigCommerce, GitHub, Trello, and more.


Special thanks to our friends at Rewind for their insights on this topic.
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