Ecommerce Guide
Ecommerce Legal Documents

Ecommerce Privacy Policy

What is a Privacy Policy?

A privacy policy is a statement that explains how a company collects, handles, stores, shares and protects customer’s personal and often sensitive information gathered through their interactions with a website. For an ecommerce store, this is crucial as it not only seen as a sign of credibility and trust, but also ensures that website owners are protected, along with their customers, whilst also adhering to their legal obligations. In the United States, Canada, the United Kingdom, Australia, and New Zealand, a privacy policy on any website that collect data from it’s users is required by law.

Why do you need a Privacy Policy?

Ecommerce store owners need to both limit their risk as well as manage the expectations of their customers to avoid any misunderstandings.

As an ecommerce store, you will undoubtedly be collecting personal information from customers and visitors to your site such as name, age, address, email and credit card details. For obvious reasons, many will want to know that this information is in safe hands so an accessible privacy policy on the website will demonstrate your commitment to security whilst helping to build confidence in your website and business.

A privacy policy also serves as protection from potential lawsuits from customers as well as other businesses. If your ecommerce site is sued, you can show that you have in place a publicly stated privacy policy that clearly declares what you do with the sensitive information collected.

Also, If your store has a payment gateway, they will likely require that you to have a privacy policy before approval is granted.

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What should a Privacy Policy include?

A privacy policy should be written in a straightforward language so that it is easy to understand and helps to instill a sense of trust. A policy that is complex and full of technical jargon may scare off visitors to your site. Making your statement easy to read helps build trust. Ensuring that your policy addresses any questions a consumer may have about doing business with you and also addresses any issues that could potentially be of a concern.

A typical privacy policy on an ecommerce site might include:

  • What kind of information is collected from the visitor/customer and why it is required e.g. an email address is required for communication.
  • How the visitor’s/customer’s information is collected and securely stored.
  • Explain if data may be left on a user’s computer, such as cookies (which is often used to track the viewing habits of visitors, make it easier for returning customers to login and remembers what products were added to the shopping cart. If you offer the option of avoiding cookies, inform them of the website features that will not be available to them as a result.
  • What you will do with the information collected and in what circumstances will it be released.
  • How, if any, of the collected information is shared or even sold. If shared, it should include an opt-out option for those customers who don’t want their information disclosed to third parties.
  • How customers can review the information a website has collected from them and how they are able to change or delete that information
  • For what period of time is the information held for and who has access to the collected data.
  • The policy’s effective date and a description of any changes since then

How to Create a Privacy Policy?

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If you have the funds, you can hire an expert or a lawyer to help you draft your privacy policy. Many will often look around at competitor sites and tweak the policy to suit their own business. For those that barely have the time on their hands let alone the finances, there are many sites out there that provide privacy policy templates which helps businesses owners to generate one rather quickly and pain-free.

An  eCommerce Privacy Policy should be accurate, clear, concise and easy to find on a website.  Not only does it serve as a means of protection to the your online business in terms of addressing misunderstandings and potential lawsuits, it acts as an effective means of being transparent and credible, keeping you accountable for the sensitive data you collect, and building trust with your customers and visitors to your site.

Ecommerce Guide

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