Regulatory Compliance for Commerce Corporations
Welcome back to our next installment on regulatory compliance. Over the past few weeks, our team has provided an overview of the importance of regulatory compliance, as well as an industry-specific piece regarding regulatory compliance practices for state and federal government agencies. Today, we will be continuing our compliance series for a sector that has a significant emphasis on regulatory compliance, commerce corporations. As your business grows, hundreds of tasks require your attention, and legal practices such as compliance can easily be overlooked. However, failing to be proactive in your understanding of regulatory compliance can lead to extensive legal and financial repercussions for your organization. That’s why we’re taking a deep dive into all things regulatory compliance so that you can learn with confidence, strategize compliance practices with your team, and foster a vastly successful business. Today, our team of facility and operations software experts at SCLogic will discuss laws and compliance regulations specific to e-commerce corporations of all sizes.
Commerce Compliance: From Brick & Mortar to Web
If there is one sector of business that has changed exponentially as technology continues to advance, it’s the commerce business. Brick and mortar stores are quickly shifting to an e-commerce focus, and although this comes with many benefits, it also comes with additional compliance considerations. From marketing and advertising laws to shipping, purchasing, and data requirements, commerce businesses of all sizes must be well-versed in compliance laws. Below, we will outline some of the most compliance regulations for e-commerce businesses.
Marketing & Advertising Claims
Marketing, especially digital marketing, has become an integral part of many businesses’ growth plans. However, you should be aware of many compliance laws under the Federal Trade Commission (FTC). Besides the requirements for advertising claims to be truthful and not deceptive, there are additional requirements for specific commerce sectors, such as marketing to children, environmental marketing, and health claims. For companies marketing children’s products, all websites must comply with COPPA, or the Children’s Online Privacy Protection Act. Additionally, with the growth of environmentally-friendly or “green” companies, claims must be backed by specific evidence to fall in line with regulatory compliance standards.
Shipping Practices Under Mail Order Rule
As a company focusing on package tracking, shipping practices are something our team is excessively passionate about (and no, we’re not embarrassed by that)! One rule that all commerce businesses shipping physical products must abide by is the Mail Order Rule. This rule requires merchants who accept orders from U.S. customers to ship each order within the time advertised, or if there is no time advertised, within 30 days of customer purchase.
Furthermore, your company must have a reasonable basis for stating shipping times and provide buyers with any delay notices and options to cancel their order. Not only does this rule apply to traditional commerce businesses, but fulfillment centers as well. Now, if you think that this rule is not excessively important, we hate to break it to you, but you’d be wrong. Just last year, a major online retailer was fined $9.3 million for failing to comply with this law, leading to excessive financial strain and a dent in their company reputation.
Data Compliance: Protecting Information & Preventing Breaches
There are hundreds, thousands, and even millions of transactions between corporations and customers for any business. With these extensive transactions moving online, this, unfortunately, brings the opportunity for data breaches to occur, leaking customers’ personal and sensitive information to hackers. To help combat this, payment gateways have been established to protect consumer information. Additionally, multiple compliance laws have been enacted internationally to ensure that each business is taking the proper precautions regarding their customers’ financial information.
We spoke about PCI-DSS compliance in our last regulatory compliance article specific to government entities; however, this compliance law is just as crucial for commerce businesses. The Payment Card Industry Data Security Standard was created to protect the information of consumers who are purchasing through major card corporations such as American Express or Mastercard. Protecting cardholder information is vital and can be costly if your business is exposed to hackers. Not only will you have to notify those affected by the security breach, if found that you were not compliant, but you can also face excessive fines and repayments to affected consumers.
GDPR Compliance for Selling in Europe
GDPR, or the General Data Protection Regulation, is one of the largest data privacy regulations in Europe. This regulation was put in place to transform how companies handle consumers’ data and how they are used if collected. While this was created for European businesses, any U.S. company that does business with European partners and consumers must abide by these regulations. The GDPR protects many kinds of consumer data, including basic identity information, web data, health and genetic data, biometric data, and racial, political, or sexual orientation data. Additionally, to avoid non-compliance, U.S.-based companies selling in Europe must designate a representative in the EU as a point of contact.
Furthermore, there is a time limit set on when you must send in a report in the event of a breach. Generally speaking, companies must report a data breach within 72 hours of the incident, and if not reported within that span, your company may face hefty fines. Speaking of non-compliance fines, the GDPR has established extremely high penalties for non-compliance, which can be as high as 4% of global turnover, or $24.4 million, whichever is greater.
See How SCLogic Promotes Compliance Through Intra
Regulatory compliance can be an extremely complex area of business to understand. With heavy legal focus and extensive penalties for non-compliance, it’s no wonder many businesses feel overwhelmed with staying proactive in their compliance practices. At SCLogic, we understand the importance of protecting consumer, employee, and business data, especially with the continued increase in technology. Our team prioritizes compliance heavily in our operations and facilities management software, Intra, so that you can invest in a modern solution with confidence that it fits your industry’s unique compliance standards. For commerce businesses, distributors, and more, utilizing Intra can help solve your organization’s daily pain points. Stay tuned as we continue to dive into compliance practices for other industries we commonly serve, and email [email protected] or schedule a demo with us today to learn more about our software! [/vc_column_text][/vc_column][/vc_row]