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How to Create a Privacy Policy for Your Business (with Template)

This is the third entry in our series of policy explanations and template to get your ecommerce website setup properly and best serve your customers. If you haven’t already, go check out our other articles about Creating a Shipping Policy and Creating a Return Policy. Unlike those previous articles, a privacy policy is a necessity for all sites and not just ones with eCommerce fulfillment concerns.

If your business hopes to expand its operations to include eCommerce or improve the online retail options it already has, you should be familiar with what a privacy policy is and why your business needs one. Presenting the privacy policy clearly and prominently on your website fulfills several prerequisites for running a professional, credible online retail site.

A privacy policy accomplishes two things: it reassures your online customers and it keeps your website compliant with online commerce laws. Privacy protection codes differ depending not only on your region but on your customers’ as well. To offer customer assurance that increases your credibility and keeps your business within the legal jurisdiction of privacy protection laws, your site needs a concise but informative privacy policy.

This article explains in detail why you need a privacy policy and what should be included in one.

Define “Privacy Policy” for Ecommerce

Your eCommerce site likely contains several documents that clarify your relationship with your customers. The privacy policy explains to customers how your business interacts with their data.

On any eCommerce site, users need to either login or input personal information at some point in their business transaction. This information differs depending on the kind of eCommerce business you manage, but it commonly includes:

  • Name and address
  • Gender and date of birth
  • Email address and phone number
  • Employment and education history
  • Credit card payment information
  • Social media accounts and other contact details

Today, customers know how vital online protection has become when offering this user data. Therefore, they want assurance that your site knows how to handle their information safely. Not only do they want to know that you will use and store their data safely, but they also need to see in writing how your eCommerce site handles online functionality.

For example, customers may be nervous about allowing cookies on your site. However, cookies enable shopping cart applications and customer orders. They improve the customer experience using online analytics. Privacy policies communicate this information so that your eCommerce site can establish transparency with your customers.

In many cases, these policies are required by privacy protection laws as well.

A Brief Guide to Privacy Policy Laws

Privacy policy laws exist to protect customers, who use eCommerce sites under the assumption that their payment and personal information will be protected. Your region’s laws should be referenced when creating your site’s privacy policy to ensure that it covers the basics of protection and regulation set up by the government to protect online shoppers.

For instance, eCommerce businesses that cater to customers in the European Union need to keep their privacy standards up to code with the General Data Protection Regulation. Businesses that need to process financial data, such as an eCommerce site, need to know the FTC’s Gramm-Leach-Bliley Act, which has been enforcing mandatory privacy policy requirements on websites since 1999.

To figure out which laws your site needs to uphold, you need to know where your customers live and the jurisdictions your site must comply with based on those locations. Thankfully, most laws, such as CalOPPA’s requirements for eCommerce businesses in California, are similar.

If you clearly post your privacy policy and include the relevant information, you will likely fulfill the requirements of privacy protection in your region. Use these basic privacy policy requirements and simply shift this information to include your region’s requirements.

What Should Be Included in a Privacy Policy

While legal jurisdiction may make privacy policies sound complicated, the information included in them can be simple and straightforward. In fact, this is the best way to use your policy to simultaneously cover your eCommerce business against legal repercussions and reassure your customers.

First, skip the legal and technical language that could confuse customers and write plain text in a format that’s easy to read. Separate it into sections that cater to customers’ main concerns. For instance, include sections for information disclosure and online tracking protocols. State in plain terms how your customers’ data is collected and what it’s used for.

Customers will be concerned with giving out their personal and payment information, especially when it seems like more information than they “need” to give. If your site asks for more basic information than just a credit card number, explain what that information is used for as part of the basic functions of your site. If you share customer information with other parties, link to their privacy policies in yours. This creates a network of transparency that’s even more reassuring for your customers.

If customers have choices on your site regarding how much information they give out and who has access to it, state these choices. Tell them the extent to which they can refuse to offer identifying information and how this changes the services they can use on your site.

Finally, make sure customers know where to contact your company if they have privacy policy questions.

Customizing Your Privacy Policy for Your Business

The little details of your privacy policy should change depending on your business. For instance, if minors can use your store, you should enumerate the privacy policy regarding children with its own header. If you allow Google Analytics (and others) access to your customers’ data, you need to specify this. By law, your privacy policy must contain your business’s specific practices when it comes to 1. Who can access a customer’s information and 2. What those with access can do with that information.

The Takeaway for Ecommerce Sites

A privacy policy dictates what information your eCommerce site collects from it, who has access to that information once you have it, and what they use it for. Privacy policies have a dual purpose for a modern eCommerce business: maintaining compliance with local and federal privacy protection laws and keeping your customers informed.

A policy displayed prominently on your site gives customers the ability to see where their identifying information goes, which allows them to make an informed decision when offering this information. To encourage customer assurance and for potential legal issues down the road, a clear privacy policy is an eCommerce site’s most vital protection.

Get The Privacy Policy Template