Importance of getting privacy policy for ecommerce website

Importance of getting privacy policy for ecommerce website

If you already own an e-commerce store or are thinking of coming up with one, there are thousands of things that you are trying to put together. However, the most important aspect is to establish customer credibility and legal compliance by setting up a privacy policy for your ecommerce website.

Often, e-commerce websites lack well-thought and GDPR-compliant legal policies to be displayed prominently on your store. To start with, every online store requires a Terms of Service and a Privacy Policy. Moreover, there should also be a Returns Policy that clearly articulates how you will handle returns, cancellations or refund requests.

Usually, these website policies explain what users can expect from the store, when they choose to interact with it or buy something from your store. For e.g. you need to let your visitors know whether you are collecting their information or not and if yes, then how are you using it? The absences of such policies might not generate a high level of trust among customers. And, they might end up choosing your competitors over you.

Basically, having a privacy policy is just like a contract with your website users that establishes accountability and trust. So, here is everything you should know about it.

What is Privacy Policy?

privacy policy for ecommerce website

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A privacy policy is one such legal document that defines different ways through which the website is collecting, processing, storing, sharing, and protecting the data of its users. Also, it even discloses the purpose behind this activity and the rights that users have in this regard.

In one way or the other. All websites are interacting with users and collecting their data. Typically, e-commerce websites collect personal data, like email address, names, IP addresses, session activity, payment details, and much more. Keeping this in mind, a privacy policy is extremely important as it safeguards the owner of the website. And, the customers alike along with ensuring that the website is adhering by legal responsibilities

What Does the Law Say?

When it comes to designing a privacy policy for ecommerce website, the rules and regulations differ as per the country laws. For those based in the US. There is no specific data protection or privacy law for e-commerce websites or stores.

However, the California Online Privacy Protection Act of 2003 necessitates that the operators of the commercial website should display a privacy policy on the sites. Under this legal agreement, one must add.

  • Kind of data collected by the website
  • How the data is disclosed or shared
  • Process for customers to review and edit the information that the website has
  • The effective date of the policy and any changes made since then

If based in the US, there are high chances of you receiving customers from California.

It’s essential to comply with this state law.

Coming to the laws of the UK and Europe, they’re quite similar but broader. So, if your customers are coming down from the UK or Europe, you must make sure that you follow the privacy laws. The European Union has outlined the EU Data Protection Directive 1995. And, states like the UK have applied the same in their native laws. In both of this legislation, business owners must cover the following points.

  • Notification to customers whenever their data is being collected
  • Personal data should only be obtained or certain and lawful reasons
  • Collect data should be up to date and accurate
  • Personal data shouldn’t be stored for longer than the necessary time period
  • Cautious security measures to protect the data
  • No transfer of personal data to a country or territory outside the European Economic Area unless the appropriate level of protection is maintained

Further, even Canadian law is similar to their law comprises the Personal Information Protection and Electronic Documents Act 2000, which requires business owners to:

  • Get consent whenever data is collected, used or disclosed.
  • Supply products or services to the customers even if the consent is denied.
  • Gather information through lawful and fair means.
  • Display understandable, readily available and clear information policies.


Ultimately you can use WPlegalPages for creating those policies with just a plugin

Why Do You Need Privacy Policy?

At this point, it’s pretty clear that a privacy policy is fundamental. So, if your e-commerce website is intended to collect visitors’ data. It’s mandatory for you to display a privacy policy. Having said that, here are some reasons that will tell you more about the importance of privacy policy for ecommerce website.

It is the Law:

There are innumerable federal and state privacy laws that every website should be complying with. Even if you’ve just published a contact form where visitors are entering their phone number, name, or email address to be in touch with you.

Or, if you’re collecting any sort of other data. It’s essential to make visitors familiar with all the activities that will be taking place with their data. And, it can only be done through a privacy policy.

It Saves you Money

Apparently, you stepped into the business world to make a significant amount of money, isn’t it? Hence, you shouldn’t be squandering it by getting stuck with a hefty fee or fines just because you failed to follow the laws.

In 2012, the California Attorney General’s Office specially applied CalOPPA for tablets and smartphones mobile applications, collecting personal information. Several app providers were found violating the laws. And, they were given 30 days either to comply with the rules or submit a fine up to $2500 every time their app was getting a download.

Similarly, for an e-commerce website or store, not complying with the privacy policy can bring innumerable troubles and huge fines. Would you bear the penalties or comply with the law? Surely, the latter, isn’t it?

It Established Credibility & Trust:

 privacy policy for ecommerce website
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With a striking increase in corporate data breaches and identity theft issues, online users are way more cautious and interested in safeguarding their personal information than ever before. Hence, savvy customers would demand to know that their data is protected with you.

You should be answering questions like:

  • Are you going to resell the data?
  • If there is a breach, will you notify the users?
  • Is there any way they can opt out of mailings?

With this, you establish trust and credibility among users, and they commit more with you, without any regrets.

Third Parties Require It:

If you’ve integrated third-party companies to your e-commerce stores, such as Google and Amazon, you must display a privacy policy so as to use, distribute, advertise, and more through their websites. Out there, you will find several treaties, international laws, and pacts that are governing data transfers and privacy policies between different countries.

As a consequence of not adhering by this law, you risk the chances of getting sued. Over the period of time SnapChat, Google, Delta Airlines, and many other huge companies had to bear the brunt of not displaying clear privacy policies.

Conclusion: privacy policy for ecommerce website

As clear as it can get, the value of a privacy policy for ecommerce website cannot be denied or ignored at any cost. So, even before you think that your e-commerce portal is ready to go live and make transactions, ensure that the privacy policy is at its place and has clear and understandable information.

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