Online security shortfall set to hurt retailers over Christmas: Report

Businesses are being urged to ramp up their online security measures in the lead-up to Christmas, with research revealing only a third of businesses have a risk management procedure in place.

The research, commissioned by NSW Fair Trading, offers insight into Australian consumers’ and businesses’ attitudes towards online shopping and their knowledge of security precautions.

Two surveys were conducted – one with 1,000 NSW consumers and the other with 200 NSW SMEs.

The second survey shows businesses are falling short on security measures and shopping information, which is worrying as consumers gear up for the pre-Christmas spending rush.

From a list of eight different security measures to protect consumers who shop online with them, the majority of businesses (90%) have some in place.

However, little more than half have any given measure in place as routine. The most common was providing a physical address and phone number (58%).

Only 52% of businesses use a secure webpage for payments or collecting consumer information, while only 33% have a risk management procedure in place in the event of a security breach.

The research suggests the lack of security measures is due to limited knowledge and awareness of online security.

For example, a quarter of the businesses surveyed were unable to name any measures they could take to indicate to customers their site is safe and secure to shop with.

Similarly, 41% were unable to name any warning signs that might make consumers suspicious of an online shopping site.

When asked to name security indicators and warning signs, 15% of the consumers surveyed look for “secure payment options or certification” while 11% look for the “padlock symbol”.

The warning signs that indicate to consumers that a site may not be safe are “negative feedback” (16%), an “unfamiliar site” (12%) and a lack of contact information and policies (11%).

According to Anthony Roberts, NSW Minister for Fair Trading, retailers have a responsibility to improve their online transaction security.

“Australian consumers spend more than $11 billion every year online and it is vital those transactions are secure,” Roberts said in a statement.

“Seventy-three per cent of all online sales are within Australia, and local retailers need to repay that faith by ensuring consumers are protected.”

The same survey shows businesses could also be doing more to make their online customers aware of their rights and responsibilities.

More than half (59%) of the businesses surveyed publish terms and conditions on their website, while a similar percentage (52%) publish a returns policy online.

Only 45% publish delivery times and costs, despite this being “a simple measure which could help mitigate the most prevalent negative experience online shoppers reported – goods taking longer than expected to arrive”.

The most common challenges for the businesses surveyed were consumers reporting that the goods did not arrive at all (13%) and consumers wanting to return unsuitable goods (13%).