(This post was originally published in April 2015 and updated in November 2017. We’ve updated it for accuracy and completeness.)
We spend a lot of time talking about things that build our eCommerce business; things like marketing and SEO and data analysis. But, most people who expand their business to the web forget about some of the fundamental ethical issues at hand.
Josiah Stamp, an early 20th century economist, said, “It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.” That was a century ago, but in a modern world, which is more transparent than ever, business ethics remain extremely important.
If you run an eCommerce business, you need to understand the ethical implications of your business. Ethics are good for the soul. But, they’re also good for the bottom line.
This post dives into the ethical issues in eCommerce that you should be thinking about.
Online Data Theft & Security
Data theft is a hot topic these days, especially in the eCommerce/retail space. Data breaches happen on a daily basis, but some are bigger than others. Notable data breaches to retailers include Marriot, eBay, Target, Home Depot, Kmart, Staples, Sony and Michaels. (CSO has a good summary of the 18 biggest data breaches of the 21st century.)
Selling products online is the new norm and must-have for retail. It’s a huge convenience for consumers and becoming their preferred way to shop. It’s an affordable way to an enter or scale in the retail space, relative to opening a whole bunch of physical stores.
Online sellers though have a responsibility to their customers. They must ensure that their eCommerce transactions do not result in data theft or security breaches. Customers give you a lot of sensitive information to complete an eCommerce transaction:
- Credit card numbers
- Personal information, like their address
- Email addresses and a password, which they may share across many accounts
- Purchase history (particularly important if you sell sensitive products)
Hackers can do a lot of damage to your customers with that information. You certainly don’t want to lose your customers’ trust. You don’t want to violate any consumer protection laws. Sellers don’t want to get booted from selling on eBay or Amazon for violating their terms. The European Union has particularly strict guidelines about data protection and consumers’ online rights and recently rolled out GDPR compliance requirements.
You could write a book on protecting your business from data theft, but here are some of the most important things you should be doing:
- Use HTTPS/SSL for your eCommerce site, especially the pages that collect sensitive information
- Add additional layers of protection like a web application firewall
- Ensure you always adhere to PCI compliance guidelines
- Only store customer data you need to store
- Protect the customer data you need to keep with extra layers of defense
- Use trusted platforms for financial transactions, data storage, etc.
Remember, it’s your responsibility as a seller to protect the information that your customers give you.
eCommerce Best Practices for Ethical Selling
Here are some of our best practices for ethical selling online.
Choosing the Right eCommerce Platform
The first step in creating a secure site is using a platform that has the right resources and functionality to protect your data. Do your due diligence on platforms like Shopify, Magento, WordPress and Bigcommerce on your available tools to safeguard customer data. Understand how your site is hosted and what security best practices and protocols you should be following.
Then, stay up to date with security patches, firewalls, and plug-ins. As time goes on, some eCommerce platforms and their servers will face end-of-life. When this happens, security patches won’t be maintained, leaving your site vulnerable. Be prepared to deal with changes like this.
For example, Magento 1.x is facing end-of-life so PHP server software that often hosts and secures these sites is also being discontinued. It’s your responsibility to know these dates and be prepared to move or upgrade technologies accordingly. If you don’t, you’re leaving your site vulnerable to attacks until you do.
Accurate Product Listing
Picture a car salesman–specifically, try to picture the stereotype. What does he look like? Plaid suit? Creepy mustache? Lots of cheap cologne?
You don’t want to be that guy. You shouldn’t bait-and-switch your customers under the guise of a cheesy smile. You don’t want to sell low quality products under the premise that they’re the best. (If you do, then why are you reading this article?)
You don’t want your eCommerce site to sell like a sneaky car salesman, either!
eCommerce is different from traditional retail. Your customers can’t touch the product they want to buy. They’ll look at pictures and videos that show the product in ideal lighting, Photoshop processing, and artistic touch. They’ll read descriptions that may say very little (or may say a ton) about the product.
eCommerce customers don’t get to see the exact item they’ll receive. In a store, you take the item off the shelf and you carry it to the register. An eCommerce transaction is instead “send me one of those”.
Therefore, it’s important that you make the effort to list your products accurately, completely, and honestly.
You have an opportunity to surprise an eCommerce customer with every transaction. You can delight them with unexpected quality, beautiful packaging, or even little extra surprise like a handwritten note or a small freebie. But, there’s also a chance to surprise them negatively…
Your customer is excited to see a box on their porch. They tear into it looking for the awesome thing they bought from you. They are disappointed that it fails to meet the expectation set by your product listing. Surprise!!!
Lower quality, inaccurate attributes, whatever…it doesn’t matter. If your product listing isn’t accurate, you’ll disappoint your customer and probably lose them as a customer. You may garner complaints on social media or offline to friends from that customer. You add just a little bit more to a bad reputation. (And, on marketplaces like eBay or Amazon, you may be violating their seller’s terms of service.)
For most eCommerce vendors, inaccurate product data is probably not intentional. It’s the result of challenges with managing data or lack of experience writing product descriptions and sales copy. It’s your responsibility to collect feedback from your customers. If they indicate inaccuracies in your product listings, you need to fix them. And, you need to fix whatever organizational problem caused it to happen in the first place.
Following Online Selling Laws
I’m not a lawyer. You probably aren’t either if you’re reading this blog post. But, we both know that it’s important for any individual and any business to follow the law. You need to make sure that your online business does.
These are some of the online selling laws you need to worry about are:
- Data compliance and privacy laws
- Tax regulations (think about selling across state and national borders)
- Online marketing laws like the CAN-SPAM act and laws about advertising disclosure
- International regulations, like those in the European Union
- Product-specific regulations (for example, you can’t sell alcohol to customers under 21)
It’s important for you to understand these regulations. There are several technology platforms help you adhere to them. (For example, platforms like Mailchimp help you adhere to the CAN-SPAM act.) You should also have a lawyer ready to address specific concerns or for dealing with weird edge cases.
To learn more about some of the laws that may affect your eCommerce business, here are a few helpful resources:
- Electronic Commerce: Selling Internationally A Guide for Businesses (from the FTC)
- Collecting Sales Tax Online (from the U.S. Small Business Association)
- E-Commerce Directive (from the European Commission)
Selling Counterfeit Products
I already talked about making sure your product listings are accurate. But, what about the products themselves? Do you know if you’re actually selling authentic products? Let me tell you a story…
A few years ago, my dad bought a new set of Taylor Made golf clubs on eBay. He’s an avid golfer and was quite excited to receive them. When the clubs arrived, he called Taylor Made to register the clubs and activate the warranty. Surprise! They were counterfeit.
Obviously, he wasn’t happy. When he called the seller, that seller was just as surprised. Turns out he had been selling counterfeit golf clubs from a supplier in China and he didn’t even know it!
Utilizing third-party suppliers, drop shipping, and some of the dynamic order fulfillment tactics that are available today can bring your business a lot of value. But, they also introduce some risk. When you buy from someone who isn’t the manufacturer, how do you know where the product is coming from?
You need to take action to ensure you sell authentic products. You’ll get the blame if the customer finds out. (Oh yeah, it’s illegal too!)
Here are a few things you can do to protect your business and your customers from counterfeit goods:
- Check what you’re selling. You may not physically handle most of the goods you sell, but at least buy a few and check them out before you start fulfilling orders. Look for these common signs of counterfeit products.
- Verify with the manufacturer. The manufacturer should be able to identify if a product is fake. Usually an item or serial number will be enough, but they could also help you with aesthetic identifiers, too.
- Only work with trusted suppliers. I’m not insisting you don’t work with other suppliers. But, make sure you can trust them. Look for validation from real organizations like the Better Business Bureau. Verify their credibility with other buyers. Prove to yourself they can be trusted.
- Be extra careful with international suppliers. There are significant reasons to work with international suppliers: price, broader markets, etc. But, be extra careful with international deals. Suppliers are harder to check up on and sometimes they are pretty loosely regulated. Be open to international business, but be aware.
Most importantly, if you learn that you are selling counterfeit products, make it right with your customers. The man that sold my dad fake Taylor Mades apologized, immediately sent a refund, and insisted that he had an angry conversation coming with his supplier. This was the right way to handle it.
Most people take their ability to use a computer for granted. What if you had a disability that prevented you from experiencing the Internet the way that everyone else does? Wouldn’t you still want to buy the same awesome goods as everyone else?
Web accessibility is not a new concept, but it’s often overlooked. It’s a set of standards that websites can adhere to make their sites useable for people with certain disabilities. For example, the visually impaired can use screen readers, which audibly dictate the contents for a web page.
Here’s the W3C’s take on why web accessibility is important. (W3C is the governing body for web standards.):
The Web is an increasingly important resource in many aspects of life: education, employment, government, commerce, health care, recreation, and more. It is essential that the Web be accessible in order to provide equal access and equal opportunity to people with disabilities. An accessible Web can also help people with disabilities more actively participate in society.
The government does not regulate that commercial websites adhere to accessibility standards (it does for government sites), but ethics can go beyond law. Do you think it’s fair that someone with a disability can’t buy your products?
Making your eCommerce site web accessible isn’t really that difficult. It’s just a matter of knowing what guidelines to follow, then ensuring your site developer (or the theme you pick) adheres to them.
Accessibility and SEO
Having an accessible site isn’t just an ethics issue, it can actually improve your SEO!
Many of the basic web accessibility guidelines are the same best practices that search engine optimization experts will provide.
- Clear and accurate <title> tags and headlines
- Using the “alt” and “title” attributes for images
- Using clear and logical HTML to structure your content
- And, the list goes on…
If you want to get started with understanding web accessibility and figure out how accessible your site is, check out the resources that the W3C provides. They are very easy to understand and very helpful.
More eCommerce Best Practices
Being an ethical sellers is the only way to win more customers and keep them overtime. Don’t overlook strategies to safeguard your eCommerce site and provide access to all.
Interested in more best practices to help you improve your eCommerce business? Check out these articles: