I was kind of shocked when I just received my confirmation mail from the shop where I just registered myself: they sent my username (which is my email address) and the password I typed in.  The password was not partially replaced with *s or similar; it was the naked, blank password I picked.

This does mean people who can check the emails the shop sends could theoretically see my login data, does it not? I believe this is the first time I get a confirmation with my full login information so this seems really weird and somehow concerns me. Should it?

From the fact that I received my password by email, I am guessing that the shop does not encrypt my password.  Is this a valid inference?

Sending you the password in plain text does not necessarily mean the database stores it in plain text, especially if they sent you the email before encrypting and storing the password. However if you ask for the password later on (e.g "forgot password" mechanism) and they do send it to you like this, it implies that they are either storing in plain text or they're using an easily reversible encryption. In either case, there is reason to be concerned unless they only send you the password on registration and before storing it on their server in encrypted format.

In particular:


If they have a "forgot my password" link that sends you the password you had previously set up, then yes, there is reason to be concerned: they are storing the password in plaintext or using reversible encryption.
If they send you a new password, then it doesn't necessarily mean they are storing the password in plaintext or using reversible encryption.  In that case, you don't have enough information to know whether there is cause for concern.


A separate issue is that, in any case, email is not a safe medium for sending passwords.  Thus, even if they aren't storing the password in plaintext, if they are sending it to you by email in plaintext, that does pose some risk.

according to plain text offenders:


  Man in the middle attacks are easy to pull off between server and the
  comminucation protocol in itself is not encrypted.

