Does My Online Store Need a Privacy Policy?

Privacy Policy Service Documents

Does My Online Store Need a Privacy Policy?

Of the top 10,000 e-commerce sites, approximately 87% use Google Analytics—and for good reason. Google Analytics offers access to robust analytics and usage data, plus advertising features. One of those advertising tools is remarketing, which lets you use data and metrics to create lists of site visitors for any targeted ad campaigns you may want to run. 

However, deploying remarketing features in Google Analytics does more than support your marketing efforts. It also triggers a legal requirement to inform your users about website performance via a privacy policy. 

Before we answer the question of whether you need a privacy policy for your online store, let’s examine what, exactly, a privacy policy actually is. (Because let’s be honest, there are a lot of definitions floating around out there!)

What is a privacy policy?

A privacy policy is a document detailing what kind of personal information an organization (such as a business, non-profit, educational organization, etc.) collects, uses, stores, and shares from its users, customers, or clients. 

This information can include data such as:

  • Names
  • Email addresses
  • Physical and/or shipping addresses
  • Birthdates
  • Payment information
  • And more

But a privacy policy covers more than just what information you collect—there are a number of other important privacy issues it should cover. Below are a few (though not all) critical pieces to include. (And if you have any questions, never hesitate to reach out to a privacy expert!)

How personal data is used

You’re gathering personal information from website visitors—okay. But why? Your privacy policy should clearly spell out the intended purpose for gathering this data, such as marketing purposes, product development, or improving your site’s functionality.

Whether you share or disclose personal information

Does consumer data travel outside the ecosystem of your e-commerce business? (Hint: if you use plug-ins, widgets, or any other third-party software solution to run your business, it probably does.) 

In your privacy policy, you’ll need to cover whether you: 

  • Share personal information with third-party service providers
  • Sell or rent information about consumers (hint hint, ad-tech and digital analytics is likely considered a sale of data under the California Consumer Privacy Act) 
  • Share with affiliates, subsidiaries, or acquirers 

Individual rights

Use your privacy policy to spell out what rights your users have to their data, including how they can access, amend, or delete their data. Make sure you provide specific methods and contact information for exercising those rights. 

Security measures

While privacy regulations don’t detail specific security measures, they do require that you take “appropriate” ones. Your privacy policy should affirm that you implement necessary measures to ensure data security (while also reminding consumers that there is always the risk of data breaches and data loss—transmitting data is always at their own risk.)

Cookies

From a privacy perspective, cookies have special requirements. You may need to include a privacy notice and opt-out mechanisms. Moreover, use of cookies may constitute “sale of data” and vendors may specifically state they need to be listed.  

In short: cookies can get complicated, quickly. If your website deploys cookies to extend functionality or gather data, stay on the safe side and make sure you’re creating thorough disclosures. 

Should my e-commerce store have a privacy policy?

If you run an e-commerce store, then chances are, yes. But why, exactly? There are two general reasons why you would need a privacy policy for your online business: legal obligations and best practices.

Legal obligations to display a privacy policy

When it comes to privacy requirements, there are “letter of the law” mandates that apply to all businesses, including e-commerce. In other words, there are certain triggers that require businesses to establish a privacy policy. 

For example: 

  • Your e-commerce business collects personal information from customers, website visitors, employees, and/or vendors
  • You operate in a jurisdiction that requires businesses to comply with privacy regulation(s)
  • Your customers or website visitors live in a jurisdiction that requires businesses to comply with privacy regulation(s)
  • You implement marketing practices or tools that track user information via remarketing or cookies (like Google Analytics, Meta, or other social media advertising platforms)

Keep in mind that individual privacy regulations have unique triggers. What’s more, there is an increasingly long list of privacy regulations out there, both at the state, federal, and international level. 

Any new online business would do well to familiarize itself with privacy regulations like these:

Another point to consider: the Federal Trade Commission (FTC) requires businesses to implement privacy policies. If you don’t, it could be considered a deceptive practice. While the FTC isn’t a privacy authority, they are an authority that requires it. 

Best practices and privacy policies

There’s the letter of the law, and then there’s the spirit of the law. And in the case of data privacy, the spirit of the law is important to heed. 

In a highly competitive digital economy, your data privacy practices can make or break consumer trust—which can, in turn, make or break your business. 

Customer trust is priceless. In fact, 59% of consumers report that just one data breach at a company would negatively impact their chances of purchasing from that company again. 

A privacy policy can help build trust with your customers by showing that you take privacy practices seriously and are committed to protecting consumer data and maintaining transparency as part of your business operations. 

If you don’t have a privacy policy, here’s where to start

If your e-commerce business doesn’t have a privacy policy—or if you haven’t updated it since last year—make it your priority for 2023. If it helps motivate you, call it your belated New Year’s resolution. 

Not sure where to start? Here are the basics. 

Perform a data inventory

Your privacy policy should describe in detail the data you collect and processes surrounding that data…but do you actually know what you collect or what your processes are?

If not, you’re not alone. It’s easy for data collection and management practices to drift. Performing a data inventory can help you accurately describe your activities—as well as make any necessary changes to data collection. 

Understand the components of a privacy policy

Although understanding what goes into a data privacy policy may seem overwhelming, you can prepare by becoming familiar with their key elements.

These elements include:

  • What data you collect
  • How the data is used 
  • Sharing of data 
  • Data security 
  • Data retention 
  • Customer rights
  • Contact information 

Identify stakeholders

Don’t silo your privacy policy (or any other aspect of your privacy program, for that matter). Privacy impacts your entire business, so make sure you have full buy-in from stakeholders. Team members from different departments—from legal to marketing, IT to customer service—should be engaged in reviewing, approving, and communicating your privacy policy.

Establish a plan for maintaining your privacy policy

Even if you write the most engaging, user-friendly privacy policy, it’s still just a snapshot in time. The data landscape is constantly changing, from the information that you collect to how it’s used and the laws and regulations governing it. 

For this reason, you need to maintain and adapt your policy regularly. At minimum, you should be reviewing and updating your policy at least once a year if you: 

  • Collect, use, or share new data or do so differently
  • Introduce new features
  • Implement new marketing activities
  • Shift business operations

What it comes down to: you should make sure that you’re always saying what you do and doing what you say. 

Train team members on your privacy policy

Whether you’re a 100% remote team or work in a traditional office, you need to train your employees on your privacy policy. They should know the ins and outs of how it impacts customers—as well as their job functions. 

For example, if you have a customer support specialist that fields incoming emails from customers, they should know how individual rights requests need to be handled. If you have a lead generation specialist sending out email campaigns, they should know what your privacy policy means for their email lists, drip campaign strategies, and more. 

To train your team effectively, remember:

  • Training isn’t a one-and-done activity. While having a comprehensive privacy training session for everyone can be a great introduction, they won’t remember your talking points if you don’t reinforce them with regular communications about privacy.
  • Teach people what they need to know for their jobs. Training will be most effective if you give them useful information that pertains to the work they do.
  • Lead from the top. Don’t expect employees to prioritize privacy if your leadership doesn’t.

Distribute your privacy policy

Once your privacy policy is drafted and approved, it’s time to share it—with everyone. The core function of a privacy policy is to communicate with users, so don’t make it hard to find. 

Your privacy policy should be in an easily accessible place. Site-wide footers have become a default location for privacy policy access, but you also need to make it available anywhere personal information is requested, such as in contact forms, downloadable forms, landing pages, or payment centers. 

Consider the language of the California Consumer Protection Act, for example, which states that privacy policies must be displayed “clearly and conspicuously” and that the link to your privacy policy must actually contain the word “privacy.”

Ready to get started?

Privacy policies are important, and their content depends on many different variables. There’s no one-size-fits-all approach to privacy—that’s why the experts at Red Clover are here to help businesses and online stores of all sizes maintain privacy compliance. 

Contact us to get started on your privacy policy today.