Understanding GDPR and How It Affects Your Online Store

Adhering to personal data regulations, meaning the General Data Protection Regulation (GDPR), has become one of the defining features of how a business should work in 2023, especially if that business is an online store. General Data Protection Regulation (GDPR) is a regulation that applies to individuals in the European Union (EU) and the European Economic Area (EEA) as of May 2018. It also regulates transfers of personal data out of these locations.

If you run an online store, it is essential to understand how GDPR compliance will impact you. You might also consider this if you collect personally identifiable information such as email addresses, names, payment details, and browsing behaviour. Lack of compliance can make you pay the fines and ruin your face in the industry. This guide summarises the key points of GDPR, why it matters for your online store, and how to ensure you’re compliant.

1. What is GDPR?

Overview of GDPR

The General Data Protection Regulation (GDPR) is a set of laws designed to protect personal data and ensure privacy for individuals in the EU and EEA. It establishes strict guidelines on how businesses collect, store, and use personal data.

GDPR mainly applies to EU businesses but also affects any company that processes the personal data of individuals in the EU. If your online store targets EU customers or processes their data, you must comply with GDPR, regardless of location.

Personal Data Defined by GDPR

Personal data is any information that can identify a person, directly or indirectly. This includes:

• Contact details: Names, addresses, email addresses, phone numbers.
• Financial information: Credit card numbers and bank account details.
• Behavioural data: Browsing history, IP addresses, and user preferences.
• Health data: Any health-related information, if applicable.

GDPR treats this data as sensitive and requires businesses to protect its confidentiality.

2. Key GDPR Requirements for E-commerce Stores

To comply with GDPR, online store owners must follow specific rules for handling personal data. Here are the main GDPR requirements for your e-commerce business:

Data Protection by Design and by Default

GDPR requires businesses to implement strong data protection measures, known as data protection, by design and default.

This means you need to:

• Build data protection into your e-commerce website’s design and operations.
• Collect only the necessary data from customers.
• Limit the use and retention of personal data to what is essential.

For example, do not collect unnecessary details, like birth dates, unless they are vital for a transaction. Also, stores personal data securely and limit access to those who need it.

Informed Consent

Under GDPR, you must obtain explicit customer consent before collecting personal data. This means clearly explaining why you are collecting their data, how it will be used, and how long it will be kept.

The consent process must be:

• Clear: Customers must easily understand what they are consenting to.
• Unambiguous: Consent should come from an explicit action, like ticking a box (no pre-ticked boxes allowed).
• Revocable: Users must be able to withdraw consent anytime, and you must provide an easy way to do so.

For example, ask for explicit consent for marketing communications when a customer signs up for your e-commerce site, and keep a record of that consent.

Right to Access and Data Portability

Customers have the right to access their data at any time. They can request a copy of the data you hold about them. You must respond promptly to these requests.

Additionally, customers have the right to data portability. They can ask for their data in a structured, commonly used format to transfer it to another service provider. For instance, if customers switch e-commerce platforms, they can request their data in an easy-to-move format.

Right to Erasure (Right to be Forgotten)

A core principle of GDPR is the right to erasure or be forgotten. This allows individuals to request the deletion of their data under certain conditions, like no longer wishing to use your services or if their data is no longer needed.

As an e-commerce business, you must have procedures to delete customer data upon request and ensure all data is permanently erased, including backups.

Data Breach Notification

If a data breach occurs, GDPR requires you to inform the relevant authorities and affected individuals. A data breach is when personal data is accessed or disclosed without authorisation, risking harm to individuals.

You have 72 hours to report the breach to the appropriate supervisory authority. You must notify the affected customers if the breach poses a high risk to individuals’ rights and freedoms.

3. How GDPR Affects E-commerce Operations

Customer Communication and Marketing

GDPR significantly affects how you communicate with customers, especially regarding marketing. You cannot send unsolicited marketing emails or messages without explicit consent.

This means:

• You must ask for consent to use email addresses for newsletters or promotions.
• Do not send marketing materials to customers who have opted out.
• Provide customers with the option to manage their marketing preferences or unsubscribe easily.

Payment Processing and Financial Data

If your e-commerce store processes payments, you must handle payment information securely and in compliance with GDPR. While payment processors like Stripe or PayPal often secure financial data, you must ensure your website’s payment process is secure and store personal data only when necessary.

For instance, avoid storing credit card details directly on your website, as this poses security risks.

Third-Party Vendors and GDPR Compliance

Many e-commerce businesses work with third-party providers, like shipping companies and payment processors. Under GDPR, these vendors are data processors, and you must ensure they comply with the regulation.

Make sure any third-party vendors you use have proper data protection measures. Also, a Data Processing Agreement (DPA) should be established with them to outline how they handle personal data.

4. How to Ensure GDPR Compliance for Your Online Store

To ensure GDPR compliance for your e-commerce store, follow these steps:

Review Your Data Collection Practices

Audit your data collection practices to confirm that you only gather necessary data for your business. Remove any unnecessary fields or personal data that aren’t crucial.

Update Your Privacy Policy

Your privacy policy must reflect GDPR requirements. Clearly explain how customer data is collected, processed, stored, and shared. Include how users can access, update, or delete their data.

Implement Secure Data Storage and Protection Measures

Ensure customer data is stored securely with proper encryption and access controls. Also, have protocols for data breaches, including incident response plans.

Obtain Explicit Consent for Marketing Activities

Always ask for explicit consent before sending marketing communications and allow customers to quickly opt in and out of marketing lists.

Train Your Team

Train your team on GDPR compliance, including everyone handling customer data, from marketing to customer support. Establish clear policies for data handling and access.

Ensuring GDPR Compliance for a Secure Online Store

GDPR compliance is essential for any e-commerce store that processes personal data, mainly if it sells to customers in the EU. You’ll minimise legal risk and earn trust by abiding by GDPR’s principles and protecting customer data.

Ensuring your online store is protected and that you are not potentially accruing fines for non-compliance may be one of those things you need to do. Still, this protection will reach far beyond the basics of your online business and visit the core where you value your customers’ rights. Stay updated with GDPR guidelines and adopt data privacy best practices to run a compliant and customer-centric e-commerce store.