How and Why to Develop an Effective E-Commerce Privacy Policy

An e-commerce privacy policy is an official statement crafted by an online company to explain how it collects, handles, stores, shares, and protects its customers’ personal and sensitive information. This is the information that is collected through the customers’ interactions with the company’s website.

Why Should You Create an E-Commerce Privacy Policy?

There are many reasons why it is important for your e-commerce company to have a privacy policy, including the following:

• To give your customers the opportunity to opt out of having their information collected—they must be given a choice
• To give your customers the assurance that their private and personal information won’t be sold to third parties or used for malicious reasons
• To let customers know that you are taking their privacy seriously
• To offer customers the opportunity to access their personal data so they can change and delete the information as they feel necessary
• To build trust
• To comply with privacy regulations

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Put simply, e-commerce privacy policies increase consumer trust.

It can be quite unnerving for anyone to submit banking and personal details on an e-commerce site. Bigger companies have the reassurance of being a well-known brand, but smaller e-commerce companies who are still trying to build their name cannot afford to break their customers’ trust by not complying with privacy laws. Compliance shows that you are serious about protecting your customers and giving them a good customer experience. If your business can be trusted with the privacy of customer information, it’s easier for potential clients to trust the quality of your products and services.

The Importance of Complying With the GDPR Privacy Policy

The General Data Protection Regulation (GDPR) came into effect in 2018 and imposes strict privacy rules for companies that operate within the European Union (EU). If you intend on expanding your e-commerce business to the EU market, or want to show your customers that you are serious about protecting their privacy, it is your best bet to get in line with the GDPR as soon as possible. The bottom line is that if your customers trust your business, your sales will increase.

What Should Your E-Commerce Privacy Policy Include?

Since no two businesses are the same, you will need to tweak this step-by-step guide to work for your unique needs. That being said, these are the general steps that you need to follow to write your privacy policy:

1. Specify the type of information you want to collect from your customers Be transparent and upfront—list all the information you’ll need from your customers. Don’t collect data that is not necessary for your website or application to operate.
2. Give your customers an explanation of why you need the information that you have requested Just telling them that you want to customize their experience so that they get more targeted posts will help them to have a better understanding of what you are trying to achieve.
3. Explain how you will be collecting their information If you will be using cookies, tell them how the cookies will work in a way that they will understand.
4. Let your customers know how long you will keep the information It’s important to include these details so that your customers can learn to trust you.
5. Explain the update process to them Every policy will organically change as a business grows, which means that your privacy policy will need to change every so often. Tell your customers how you will let them know that you’ve made changes to your policy so they can read the updated version.
6. Give them a full breakdown of how you will be protecting their information Tell them what security practices you will be using, how you plan to keep up to date with the rapidly changing cyber industry, how the software works, and how it compares to other products on the market—any details that will give them the peace of mind to shop with you.

And for goodness sake, all of this needs to be explained as simply as possible so that your customers can actually understand how you will collect their information. Using jargon and highly technical words will just drive them away. Make the information accessible to them with easy-to-understand headings and short, punchy explanations. And finally, make it easy for them to contact you if they have any questions or concerns.