HTML and CSS Reference
In-Depth Information
Risks of E-Commerce
There are risks involved in any business transaction, and e-commerce is no exception.
Possible risk issues for businesses include the following:
Loss of Sales if Technology Fails. If your Web site isn't available or your
e-commerce form processing doesn't work, customers may not return to your site.
It is always important to have a user-friendly, reliable Web site, but when you
engage in e-commerce, reliability and ease of use are critical factors in the success
of your business.
Fraudulent Transactions. Fraudulent credit card purchases or crank orders placed
by vandals (or thirteen-year-olds with time on their hands) are risks that busi-
nesses need to deal with.
Customer Reluctance. Although more and more consumers are willing to purchase
on the Web, the target market of your business may not be. However, by offering
incentives such as free shipping or a “no questions asked” returns policy, your
business may be able to attract these consumers.
Increased Competition. Because the overhead for an e-commerce site can be much
lower than that of a traditional brick-and-mortar store, a company operating out
of a basement can be just as impressive as a long-standing organization if its Web
site looks professional. Because it is much easier to enter the marketplace with an
e-commerce store, your business will have increased competition.
Businesses are not alone in needing to deal with risks associated with e-commerce.
Consumers may perceive the following risks:
Security Issues. Later in this chapter you will learn how to determine whether a
Web site has Secure Sockets Layer (SSL) for encryption and security of informa-
tion. The general public may not know how to determine whether a Web site is
using this encryption method and be wary of placing a credit card order. Another,
possibly more important issue, is what the site does with information after it is
transmitted over the Internet. Is the database secure? Are the database backups
secure? These questions are difficult to answer. It's a good idea to purchase only
from sites that you consider to be reputable.
Privacy Issues. Many sites post privacy policy statements. These describe what
the site will do (or will not do) with the information they receive. Some sites use
the data for internal marketing purposes only. Other sites sell the data to outside
companies. Web sites can and do change their privacy policies over time.
Consumers may be leery of purchasing online because of the potential lack of
Purchasing Based on Photos and Descriptions. There is nothing like holding and
touching an item before you purchase it. Consumers run the risk of purchasing a
product that they will not be happy with because they are making purchasing
decisions based on photographs and written descriptions. If an e-commerce site
has a generous return policy, consumers will feel more confident about
Returns. It is often more difficult to return an item to an e-commerce store than
to a brick-and-mortar store. Consumers may not want to risk this inconvenience.
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