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Data Privacy in eCommerce: What You Need to Know

Blog Post
How do retailers ensure their customers’ data is private and secure? We’ll look at 3 ways in this post.
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As eCommerce has risen in popularity, we’ve also seen a major uptick in fraudulent activity, particularly in the realm of business and customer data theft.   

This has put a lot of pressure on retail and eCommerce businesses to safeguard their customers’ information. But, as you might expect, finding the right fraud protection tools and strategies can be difficult — especially as fraud continues to evolve.  

So, how do retailers ensure their customers’ data is private and secure? We’ll look at 3 ways in this post.  

Ask for Data, Don’t Just Take It 

While it’s become commonplace for businesses to passively collect data on their website and request it from third-parties, it isn’t necessarily the best way to gather customer information from a data privacy standpoint. Not only does it take the control of customer data away from your customers, but the use of cookies can also put your customers at greater risk of data theft.  

Asking customers to share their personally-identifying information — like names, email addresses, phone numbers, and business information — directly, allows you to gain access to the information you need while respecting your site visitors’ personal privacy and protecting their online activity and identity from fraudsters.  

Here are just a few ways you can ask customers nicely for their data: 

  • Trade access to valuable gate-kept content in exchange for their information 
  • Request their information directly during live chat conversations with your sales team and customer support agents, being careful to explain your reasoning for collecting it 
  • Send out surveys to your customers to gather targeted pieces of information — like product preferences  

Partner with Payment Processing Platforms 

Since eCommerce businesses can’t accept payments at a POS system, it isn’t possible to operate without a payment processor. But that doesn’t mean the software (or the data) has to be stored in-house. In fact, by partnering with payment processing platforms like Stripe, Square, and WePay, you can actually hand off data protection to those third-parties.  

This means that if you are hacked and your data is compromised, your customers will continue to be protected from the fraudster.  

Use Customer Data for Its Intended Purpose, Nothing Else 

When customers share their data with you, they trust that you won’t abuse it. But unfortunately, that trust isn’t always honored. Sometimes businesses (or their affiliates) sell the data to interested parties. And other times, it’s used by the asking party for unrelated initiatives and services. In either case, this puts customer data at greater risk, as it’s shuffled around organizations and shared with corporate partners who have their own privacy policies and rules. 

What does all this mean? Simply that if retail and eCommerce businesses are serious about protecting their customers’ privacy and safeguarding their personal data, they need to make sure that data is only used for its intended purpose.  

With growing demands for better data privacy, eCommerce businesses need to take the lead in protecting their customers. Thankfully, it’s easy to do. By asking for your customers’ data, partnering with payment processing companies, and only using the data for its intended purpose, you can both build trust with your customers and effectively guard your business against any potential liability risks.