Why Your Online Store Needs a Privacy Policy

As you start to build your business website, you probably have a checklist of features you want to include. From an intuitive search feature to easy ordering, you likely spend a great deal of time looking for ways to make your site as attractive and functional as possible.

But in addition to dynamic sales copy and an array of products, your website must meet certain legal conditions — not the least of which is a comprehensive and easily understood privacy policy.

Privacy is a hot-button issue these days. It seems like every day headlines reveal yet another data breach, or another organization or agency that is accessing user or customer data for analysis. While most people realize their actions online are most likely being tracked and used for marketing or other purposes, the vast majority of consumers are wary about any personal information being shared among businesses without their consent — and are trusting you, as a website operator, to protect their sensitive data.

For that reason, developing a privacy policy for your online store is a vital step you cannot overlook. In fact, you may be legally bound to do so. Even if you use a web store builder, it’s up to you to ensure that you have a privacy policy in place, or you could face serious and expensive consequences.

“But I Just Sell Old Books!”

Many times, small-business owners who open a Web store think that they are exempt from privacy issues. After all, if you are launching a site to showcase your handmade accessories or sell antique books you collect from the flea market, your customers won’t be sharing any data like Social Security numbers.

However, your customers may feel differently. Most people consider their credit card or other financial information vital, especially when paired with their names and addresses. And anyone who’s been deluged with piles of junk mail or spam emails after sharing his contact information with a company will attest that no one wants his or her personal details shared at random.

That’s why legally, if you collect any type of financial information from your customers, you are required to post a privacy policy explicitly outlining what you will do with that information. And in certain circumstances, the requirements are even more stringent; for example, the Children’s Online Privacy and Protection Act places strict limits on how you can collect and use information about minors under age 13.

Creating a Privacy Policy

Because your privacy policy needs to meet certain criteria if you’re collecting financial data, even if you are using a template or language provided by your Web developer, it’s a good idea to have a qualified attorney review the language to ensure it meets legal standards.

For example, some websites include well-meaning but inaccurate language in their privacy policies that can get them into trouble should things go wrong. Promising not to share any information with any third party sounds like it would be the noble thing to do, but it’s an empty promise. When someone makes a purchase, his or her information must be shared with a number of third parties, including the Internet service provider (ISP), a database vendor, the shipping company and your credit card processor. That’s why asking a legal professional to review your policy is an important step, as he or she will craft a policy that allows for such legitimate sharing while still enacting adequate protections.

Seeking guidance in adhering to rules and regulations can also help you adhere to additional requirements, such as the placement of the policy. For instance, you may not realize that Texas law requires businesses operating in that state to post a privacy policy on their sites in a conspicuous location.

Beyond meeting legal requirements, your privacy policy should at minimum specify what types of data you are collecting and how, where you will store it, how you will use it, who it will be shared with, how long you will keep it and who has access to the data.

Once Is Never Enough

Don’t fall into the trap of believing your privacy policy is a “one-and-done” proposition. Review your privacy policy every few months to ensure accuracy, and make changes as necessary. Your policy should always match your practices, and vice versa.

Developing a privacy policy for your website is not a difficult task, but it’s a vital one if you want to remain compliant with current e-commerce laws and best practices, in addition to protecting you and your customers.


About the Author: Veronica Marshall has been an online entrepreneur for nearly 15 years. She blogs about e-business best practices and management for several sites. She recommends using www.ebizwebpages.com for easy and user-friendly Web design.

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