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Online shopping brings the world to our fingertips but also invites cyber threats that can turn convenience into a cost. Personal data is at stake with each transaction, and a single breach can have far-reaching consequences beyond immediate theft, impacting chargeback rates and customer loyalty. This article explores the vital measures online retailers must embrace to safeguard their operations and customers' peace of mind.

Online Stores Collect Tons of Your Details

Consider the scenario in which you wish to purchase a pair of sneakers. You visit the website of the store. Create an account by providing your name, email address, phone number, and physical address – to set up an account!

Once you've done that, you add the sneakers to your cart. When it comes time to complete your purchase, you enter your credit/debit card details, such as card number, expiry date, and security code – allowing the store to process the payment from your account.

Furthermore, the website also captures information about your device type, browser used for shopping purposes, and location data as insights into your shopping preferences. On average, each customer is associated with more than 2000 data points gathered by a store! This vast data collection necessitates robust cybersecurity defenses to safeguard customer information and maintain trust. Protecting this data is paramount; a breach here can increase chargeback claims.

Hackers Love to Attack Online Shopping Sites

All this customer data makes online shopping websites a very juicy target for hackers. Criminals are always looking for new ways to steal personal and payment information. They sell this on the dark web to make money.

In the first quarter of 2023 alone, more than 6 million customer records were leaked in data breaches across the world. That's more than double the entire world's population! This escalation not only compromises personal information but also feeds the cycle of chargebacks affecting the bottom line.

Out of all industries, the retail business takes the hardest hit from data hacking. The more people shop online, the bigger the bullseye on eCommerce companies grows.

Famous Stores That Got Hacked and What Got Exposed

Some well-known chains have suffered massive attacks where customer details were stolen:

1. JD Sports breach 2023: In January 2023, hackers stole personal data and order details of 10 million customers from 2018-2020 purchases. This raised concerns about JD Sports' data management.

2. Bonobos breach 2021: A hacker stole a 70GB customer data file from a third-party cloud provider, exposing 7M addresses and 1.8M accounts. This showed retail supply chain risk.

3. CVS Health breach 2021: A misconfigured 1.1 billion record CVS customer database was left publicly accessible. It exposed emails, IDs, and search data until access was restricted.

But it’s not just huge companies that get hacked. Even small online stores are vulnerable.

Magecart Attacks involve hacking shopping sites that aim to steal credit card numbers from customers. In 2019, over 570,000 small eCommerce sites were impacted by Magecart attacks. The lesson is clear: small or large, any store can be a target, and the result is often a costly chargeback.

All the Sneaky Ways Hackers Get Your Data

Hackers are smart. They use clever tricks and attacks to steal data from online shopping websites. Here are some examples:

  1. Employees Stealing Data

Employees working at eCommerce companies often have access to customer information and payment data. Some dishonest workers misuse this access to steal data and sell it illegally. About 39% of data breaches happen this way with an internal person involved.

  1. Guessing Weak Passwords

You need a password to log in to shopping sites. But many people set very easy passwords like '123456' or just 'password'. Hackers can easily crack these common passwords. This allows them to break into accounts and access private details. Proper OT cybersecurity practices like enforcing strong passwords can help mitigate this risk.

  1. Fake Emails (Phishing)

Watch out for emails that pretend to be from your favorite shopping website! These phishing emails try to trick you into clicking links and revealing login details and credit card numbers. Over one-third of data breaches begin with someone falling for a phishing email.

  1. Installing Malware

Hackers use malware or malicious software to infect shopping websites, which then silently collect and send customer data back to the hackers.

woman sitting on couch while using laptop computer

How to Know if Your Data Was Breached

Sometimes data breaches happen without the company even realizing it. How can you as a customer know if your personal information was stolen from an online store you used? Here are some signs to watch out for:

  • If you suddenly start getting more spam emails, text messages, or phone calls asking for personal details, your contact info may have been leaked. Always be suspicious of unsolicited messages asking for private data.
  • Keep a close eye on your credit card and bank account statements. Look for any charges you don't recognize. Small test charges are common if your card number is stolen. Call your bank immediately if you see fraudulent transactions.
  • Many companies are required to notify you if your data is exposed to a breach. So watch out for letters, emails, or texts from retailers admitting a hack took place. Engage with your retailers' security updates to stay informed about new threats and recommended preventive measures.
  • Monitor your credit report for any accounts or loans opened without your permission. Regular checks can be instrumental in the early detection of identity theft. Get a free copy of your report every 12 months from each of the three credit bureaus. This allows you to spot any theft of your identity.

How to Protect Yourself After a Data Breach

Uh oh, a company you have used just announced a data breach. What should you do right away to protect yourself and reduce any risks? Here are some smart steps to take:

  • If passwords have been exposed, change them immediately on that site and any other sites that use the same password. Don't reuse passwords across sites.
  • Call your credit card company and bank to inform them of the breach. They can watch for fraudulent use and issue new card numbers.
  • Put a fraud alert on your credit reports. This makes it harder for anyone to open new accounts in your name.
  • File your taxes early before a scammer tries to claim a refund in your name. The IRS offers an Identity Protection PIN to prevent tax identity theft.
  • Be extremely cautious of any calls or emails asking for your personal information. Hackers may pretend to be from the breached company.
  • Limit the damage by acting quickly when you learn about a breach. Sign up for credit monitoring as well to notify you of suspicious activity. Stay vigilant for the next 12 months or more.

All the Ways a Data Breach Can Destroy an Online Business

When an eCommerce website gets hacked, it can ruin the business in many ways:

Huge Financial Hit

Dealing with a breach costs retailers a lot of money. They have to hire cybersecurity experts, notify customers, settle lawsuits, refund stolen money, and more. In 2022, the average data breach cost for a US retailer was a massive $9.44 million! Furthermore, the subsequent fraudulent chargebacks and the need to automate the dispute process become part of the spiraling costs associated with a data breach. These financial repercussions often extend to include chargebacks resulting from fraudulent transactions made with stolen data.

Brand Reputation Gets Ruined

Data hacks severely damage the brand image and reputation of online retailers. People view them as sloppy and unsafe. These stains can impact the business in the long run.

When customer payment card data is leaked, the cards can be used to make fake purchases online. Real customers then dispute these fraudulent transactions. This leads to a lot more chargebacks, refunds, and payment disputes for the hacked store.

How a Data Breach Can Hurt You as a Customer

When an online store suffers a data breach, customers like you can become victims too. Here are some of the bad things that can happen if your personal information gets stolen:

  • Identity theft - Hackers use your name, address, social security number, and other details to pretend to be you. This allows them to open accounts or get loans in your name.
  • Credit card fraud - Your card number can be used to make unauthorized purchases online or in stores. Or money can be stolen from your bank account if it's linked to the card.
  • Account break-ins - With your login info, hackers can access your accounts on shopping sites to view purchase history and personal details.
  • Junk mail overload - Your contact information like email and phone number can be added to lists and then sold to companies. This results in a flood of unwanted spam.

While businesses take the biggest hit, data breaches can create big headaches for customers too. So be vigilant in watching for any signs your data was misused.

How Online Stores Can Stay Safe from Hackers

The threat is real. However, e-commerce companies can and must take steps to guard against data breaches. Implementing strong security protocols not only protects against data theft but also reduces the risk of chargebacks stemming from fraudulent activities. Here are some good ways to be proactive:

  • Use a super-secure eCommerce platform like Shopify, which has built-in safety features against hacking. Platforms with strong security measures can serve as a critical foundation in preventing data breaches and their associated costs.
  • Encrypt all data between the store and customers. Encryption can render data useless to thieves and help maintain the integrity of the transactions, reducing the likelihood of chargebacks due to fraud. Enable SSL encryption at a minimum.
  • Only gather the customer details you need to operate. Avoid collecting unnecessary personal data.
  • Install anti-malware programs that constantly scan for threats and prevent hacking.
  • Train employees about safety practices when handling customer data. Educated employees are your first line of defense in spotting and preventing potential breaches that could lead to chargebacks. Monitor for unauthorized data access.

How Companies Can Regain Your Trust After a Breach

For retailers impacted by a data breach, rebuilding customer trust is crucial. But how can hacked companies get back in your good graces? Here are some ways they can show they deserve your business again:

  • Be upfront about the breach by notifying all customers on time. Explain what data was taken and how they're protecting customers moving forward. Transparency is key.
  • Offer free credit monitoring for affected customers. This shows the company is serious about protecting you from potential identity theft.
  • Have regular, independent audits to assess security practices, then be open about the findings and fixes. Ongoing audits indicate continued commitment to improvement.
  • Reward loyal customers who stay with discounts, free products or services, and other perks. Small tokens of appreciation can help smooth things over.
  • Highlight expanded security measures and cybersecurity staff/training. Educate customers on how data is now being protected.
  • Make amends but don’t be overly pushy. Go above and beyond to restore trust for customers who remain uneasy. If you’re transparent and demonstrate meaningful change, customers will respond.

Summed Up

If you've ever wondered why cybersecurity jobs are spiking now, it's because cybersecurity is not just a technical issue. It’s a business imperative that encompasses everything from preventing fraudulent chargebacks to building a trustworthy brand. The safeguarding of customer data is integral to maintaining the financial and reputational stability of eCommerce businesses. Automating the dispute process can be an integral part of a comprehensive cybersecurity strategy, helping to mitigate the impacts of fraud on revenue and customer trust.

Online shopping may be quick and convenient. However, eCommerce companies have a huge duty to keep customer data safe from hackers. The importance of cybersecurity spans from the very introduction of an e-commerce platform to the conclusion of each transaction. Ignoring cybersecurity can sink an online business. The costs of fixing a data breach are massive - both money-wise and reputation-wise.

The good news is that by being informed and vigilant, companies can prevent most attacks. For the safety of their business and loyal customers, online retailers must make cybersecurity their top priority.

Common Questions about Data Breaches

What is a data breach?

A data breach is when hackers illegally access and steal private customer information from an online business. This data can include names, addresses, credit card numbers, and other sensitive details.

How often do data breaches happen to eCommerce companies?

Very often. Out of all industries, the retail business is the #1 target for cyber-attacks and data hacking. As more sales move online, the threat grows bigger.

What can online stores do to avoid data breaches?

Key things like using secure eCommerce platforms, encrypting data, limiting unnecessary data collection, having anti-malware software, training staff on security, and monitoring for unauthorized access.

About the Author: Dani Martin has had hands-on experience in digital marketing since 2007. He has been building teams and coaching others to foster innovation and solve real-time problems. In his previous work experiences, he has developed expertise in digital marketing, e-commerce, and social media. When he's not working, Dan enjoys photography and traveling.


What is a data breach?

A data breach is when hackers illegally access and steal private customer information from an online business. This data can include names, addresses, credit card numbers, and other sensitive details.

How often do data breaches happen to eCommerce companies?

Very often. Out of all industries, the retail business is the #1 target for cyber-attacks and data hacking. As more sales move online, the threat grows bigger.

What can online stores do to avoid data breaches?

Key things like using secure eCommerce platforms, encrypting data, limiting unnecessary data collection, having anti-malware software, training staff on security, and monitoring for unauthorized access.

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