In the modern world, there is rise in charity organizations which deal with donated product such as books, toys, ornaments and small household goods. Unfortunately, these charity organizations often encounter financial problems due to low prices on commodities of high value. The potential customers of these charity organizations are mainly low wage earners and the old age pensioners.
Due to these challenges, charity organizations have opted to use online marketing to increase their markets. With their resolution to online marketing come several challenges. Consequently, this paper seeks to analyze the possible risks to the charity organizations going online and also provide solutions to minimize the risks that will be encountered.
There are several risks that are related to the organization that opt to work online (Ottessen and Gronhaug, 2006). One of the major risk that is likely to be encountered is payment fraud (Li, 2003). With the use of credit, debit or personal cheque there is possibility of the charity getting defrauded through fake documents. Personal cheques are not reliable source since they might be bouncing therefore the business faces the risk in payment of commodity.
The server providing the charity organization with the internet also known as the internet service provider may break down bringing the activities of the business to a halt. The organization is therefore exposed to threat of making losses due to ineffective performance. The software of the computer may encounter some fault resulting in error or omissions. This permits unauthorized individuals to use the services of the charity organization without the notice of the owner and can result in loss of property due to online theft.
Another risk posed to the charity is the possibility of hacking (Shih and Wen, 2005). The computer system of the organization is likely to be infected by the viruses, botnets, Trojan or worms since it is exposed to insecure usage by potential customers. Therefore, the computer system is likely to break down which in turn will affect the activities of the charity i.e. the organization is likely to make losses.
To make matters worse, data stored in the computer system faces threat from the infection of the virus. The databases, software’s and files are likely to be affected by the viruses, Trojan or worms.
Besides, there is a risk of spoofing. Illegal sites purporting to have a relationship with the genuine charity organization are likely to sprout. There is great likelihood because of the low costs of website creation and the ability to imitate the original pages. Therefore, customers of the business have a greater risk of being conned from by scammers. As a result, customer loyalty is likely to be lost hence the charity will perform poorly.
Given that website development is much easier and cheaper, the copyright, patent and trademark names are likely to be infringed since the hackers can use the information about the business without authority from the owner (McKay and Marshall, 2004).
There is also the issue of libel about the information published on the web page (Smith, 2004). The information that is contained in the web page concerning the charity may be damaged or destroyed leading to decrease of fame of the organization.
Shipment costs are likely to be high since the organization has a responsibility of delivering the products to the doorstep of the consumer (Schienker and Crocker, 2003). This makes it to be an expensive business resulting to losses or minimum profit. To add on, the consumer can claim that the goods were not received or were of poor quality which may lead to compensation.
The link between the organization and the supply channel will be poor or not sufficient since the customer does not have physical and free interaction with the business. Consequently the commodities will not sell as required therefore the stock might be scrapped in order to pave way for the new stock.
Encryption is one of the ways that can secure the transaction between the consumer and the organization. The technology of encryption denies the unauthorized persons the information on the payment documents. This allows the information to be private and confidential therefore it can not be used without the knowledge of the owner.
Authentication is another way to minimize risks in the charity organization. This is the satisfaction of the customer security after obtaining trust in the authority of the organization. This encourages the customer to access the internet business without fear since security is guaranteed upon the use of the commodities in the online business (Li, 2003).
Digital certificates should be issued in order to secure communication of the organization from possible hackers (Reisnich, 2005). This involves the use of electronic files that distinguishes the genuine storefronts of the organization which are on line. Therefore the consumer is protected against the scammers.
Training the staff about the risks encountered is a way of managing the risks that are encountered in the organization (Pathak, 2005). This enables the staff to be aware of the risks involved in the online transaction and this will help to curb down the uncertainties that may be encountered.
The charity should be able to choose the right bank and proper payment methods in order to avoid defrauding and loss of property. It follows that the potential bank should be conversant with the risks associated with online transactions.
The website content about the charity organization should be sufficient and reliable in order to minimize the risks involved in the business. For instance, the web page should consist of shipping, refund and privacy policies. To add on, the page should be easy to use for their consumer.
Making of internal structures that prevent fraud and implementing them is another way to minimize the risks related to the charity organization. This includes the strategies that the business plans in order to counter fraud cases.
Tools that are meant to prevent fraud should be used in order to avoid fraud cases. For example, the use of secured codes in the master and visa cards can greatly reduce chances of being scammed. The charity organization should be vigilant in the use of the credit cards in order to avoid the fraud cases. This involves carefully screening the cards that are used in the online transaction to minimize the risks related to fraud cases.
Possible intruders to the account of the charity organization should be prevented (Shih and Wen, 2005). This is enhanced by protecting the account from unauthorized persons.
In conclusion, it is clear that the charity organization will be at risks when it goes online as compared to when it operates through the physical location. Both the charity organization and its potential customer are exposed to greater risk when the business decides to go online.
However, if the charity organization takes extra caution in order to minimize the risks, the performance of the charity is likely to be boosted up. This is because the sales are likely to increase due to the large number of customers purchasing from the charity.
Reference List
Li, S., 2003. Future trends and challenges of financial risk management in the digital economy. Managerial Finance, 29(5/6), pp.111-125.
Mckay, J. and Marshall, P., 2004. Strategic management of e-business. Singapore: John Willey & Sons Austria, Ltd.
Ottessen, G.G. and Gronhaug, K., 2006. Pursuing Opportunities: Why so many fail and so few succeed. European Journal of Marketing, 40(1/2), pp.100-112.
Pathak, J., 2005. Guest editorial. Risk management, internal controls and organizational vulnerabilities. Managerial Auditing Journal, 20(6), pp.569-577.
Reisnich, R., 2005. E-commerce: Managing the Legal Risks. Managerial Law, 47(1/2), pp.168-196.
Schienker, L. and Crocker, N., 2003. Building an e-business scenario foe small business: the IBM SME Gateway project. Qualitative Market Research: An International Journal, 6(1), pp.7-17.
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