5 privacy considerations to handle customer data in your e-commerce

Priya Jain



In today’s digital economy, handling customer data safely and securely is what drives an e-commerce wagon. Do you think that privacy consideration is the headache of only e-commerce giants like Amazon and Walmart?

If so, think again!

In 2014, eBay asked a whopping 145 million users to change their password after unearthing a data privacy breach.

Still not convinced?

In October 2020, when COVID-19 created worldwide havoc, cybercriminals made life miserable for many bookstores. In the cybersecurity attack, email addresses, shipping addresses, billing information, and phone numbers were compromised.

In the ever-changing digital landscape, a paradigm shift in e-commerce shopping and ever-increasing dependency on e-commerce has intensified the perplexities of privacy issues.

Whether small or big, e-commerce companies have lost customer trust and have been sued for their inability to handle customer data safely. You’re legal, if not morally, responsible for safeguarding every minute detail of your customers.

Contrary to popular belief, privacy considerations are not a financial liability. When done right, it builds a reputation, which eventually increases sales. Customers love doing business with brands that prevent personal information from leaking.

That’s why giving importance to customer privacy is paramount and a success ladder.

The frequent cyber attacks and security breaches have made even the most enthusiastic online shopper vigilant than ever. Gone are those days when your shopper would willingly share everything with you. For bringing back that golden era and ensuring customer trust, focus on these five privacy considerations.

customer data

5 privacy considerations to handle customer data in your e-commerce. Source: pexels.com

1. Ensure compliance with data privacy laws

As an e-commerce owner, you have to wear many different hats. From managing SEO to writing new product descriptions – you’re always busy and would hate to add another task under your feather.

But, compliance with privacy laws is as essential as other tasks you perform. With the cost of non-compliance being 2.71 times the cost of being compliant – spending a few hours from your busy schedule protects your e-commerce business from pricier penalties.

With people increasingly concerned about sharing their data, regulations like California

Customer Privacy Act (CCPA) and General Data Protection Regulation (GDPR) ensure e-commerce brands are mindful of their customer’s data.

The first right step towards ensuring compliance with data laws is understanding what the law states as it’s applicable throughout your organization.

Ways of ensuring compliance

  • Only collect data you require: If you don’t need information, don’t ask for it. But, if you want information, be clear on how you’re going to use it. For example, asking for marital status is not required for an e-commerce store selling baby clothes.
  • Ensure transparency: From placing an unsubscribe button in bold fonts to sharing the link of terms and conditions on every web page, transparency is the key to compliance. In short, put out everything in the open where it’s visible to your customers.
  • Ask for customer consent: Laws like GDPR and CCPA give privacy control to customers on how their data is used. For ensuring compliance, take out the guesswork and directly ask customers about their requirements. If you want customers to subscribe to your newsletter, take their consent instead of silently pre-ticking checkboxes at the time of signup.

Interesting fact: Due to GDPR, 47% of customers have started trusting businesses with their data.

2. Use SSL for enhancing protection

Why do you wear protective glass while swimming? Why do you wear a seat belt while driving?

For the same reason, your website requires a Secure Socket Layer (SSL) certification. In the digitally evolving world, SSL is no longer a luxury; it’s a necessity. A website implementing SSL has HTTPS in its URL instead of HTTP.

Cybercriminals leverage encrypted traffic to spread their malware and phishing campaigns.

That’s where SSL comes in.

It gives insights into security threats that are hidden in encrypted traffic. Using SSL, e-commerce can safely transmit critical information such as SSN, credit/debit card numbers, and login credentials. Without an SSL certification, this personal information is transmitted in plain text, leaving your data at the mercy of unauthorized personnel.

Benefits of SSL

  • Build a foundation of trust by providing a completely secure connection
  • Protect customer data
  • SSL encrypts all information that the intended server or browser can only decrypt
  • Confirms your website identity verification, which is essential for building trust
  • Enhance SEO as Google gives preference to HTTPS-enabled websites
  • Helps satisfy PCI/DSS requirements – essential for accepting online payments
  • Google flags the website without an SSL certificate

Interesting statistics: 93% of websites listed on Google have an SSL certificate. This makes SSL an essential aspect of privacy consideration.

3. Create a privacy policy

As an e-commerce business, you’re at the core of collecting a lot of personal information. From the name, email address, shipping details to payment card details and technical information like cookies – you collect information that is on the radar of every cyber-criminal.

Today, a privacy policy is no longer just a minuscule link at the bottom of your e-commerce website. With data breaches on an all-time high – a privacy policy is one of the most important texts on your website.

A privacy policy is a legal document entailing details on how your e-commerce business collects, stores, processes, shares, and eventually protects your data. This legal document tells a customer what information they can access and asks them whether they agree to the conditions or not.

Together with ‘Terms and Condition,’ privacy policy provides a 360-degree approach to ensuring compliance with CCPA, GDPR, and other national and international regulations.

Benefits of a privacy policy

  • Build trust by protecting your personal information
  • Safeguards you from hefty penalties and never-ending lawsuits
  • Help your e-commerce business show transparency
  • Proves your website is safe to-do business
  • Establishes rules which customers should follow when purchasing from your e-commerce store

Interesting fact: With one-in-five customers reading your privacy policy before agreeing, simply copy-pasting a boilerplate privacy policy will not serve any purpose.

4. Regularly update security patches

You may be using an open-source e-commerce platform to save money. But, did you know unlike paid platforms, the onus of running your e-commerce successfully lies on your shoulder.

With free installation and use, you bring home security vulnerabilities.

That’s where security patches come to your rescue. These patches easily identify weaknesses in the platform and ensure your customer data is safe. Failure to regularly update security patches results in disastrous consequences and makes you even more vulnerable to phishing attacks.

Benefits of updating security patches

  • Prevent hackers from stealing or altering your customer’s information
  • Failure to update makes you vulnerable as hackers try innovative ways to get your data
  • Enhance performance as every patch brings new features
  • Close potential security and privacy loopholes

Interesting fact: 70% of businesses receive significant benefits, including operational efficiency, innovation, and agility, when taking privacy considerations seriously.

5. Conduct a data privacy audit

As an e-commerce business that collects a plethora of customer information, you need to be wary of data your business needs, ways you collect, use, and store it. In the excitement of providing a hyper-personalized shopping experience, you may end up collecting more information than you need.

You may collect more information either because a third-party vendor is pulling more information or your advertising network is using codes to gather more personal data automatically.

Whatever may be the reason, paying attention to data collection methods helps your e-commerce business go miles. It also avoids sparking an unprecedented crisis of losing customer trust and frustrating customers by asking intriguing questions.

Benefits of data privacy audits

  • Help an e-commerce business remain compliant with laws of the land
  • Reduce liability of data loss due to potential breach
  • Build and maintains customer trust
  • Maintains integrity

Interesting fact: 81% of customers feel that the risk a customer faces because of data collection by companies far outweighs the benefits – conducting a data privacy audit could answer this misery.

 Wrapping up

Handling customer data is no rocket-science, but it has many facets which an e-commerce business should address one at a time. With the world of cybersecurity continually evolving and hackers leaving no stone unturned to get hold of your customer’s personal information – using robust security methods has never been more critical.

From ensuring compliance with privacy laws to getting an SSL certificate, e-commerce stores that focus on data privacy are the ones that don’t fall prey to digital Darwinism.

A completely protected and safe shopping environment is the backbone for increasing customer engagement and conversion rates. Unless your customers trust you, they will not make a purchase!

How are you protecting your customer data? What are your privacy considerations?

Do let us know in the comments section.