How to Create Privacy Policy for Ecommerce Website: A Complete Guide

All eCommerce stores collect personal data from their customers. In the past few years, there has been an increase in the number of businesses going online.

It has also resulted in increased personal information collected and shared online.

Privacy laws are established to monitor data collection and prevent information leakage. One of its requirements is to have an eCommerce store privacy policy.

This article will help you write your eCommerce store’s Privacy Policy. It will also explain why your business needs it.

5 Steps to Add a Privacy Policy for an Ecommerce Website

A lawyer ideally writes a Privacy Policy. However, this would take time and money, which may not be ideal for starting a small business.

You can also get a template online. These would usually have businesses fill in the blanks regarding their details.

However, the quickest way to get a Privacy Policy is to use a generator.

Here are the steps to make a clear and transparent Privacy Policy for your business.

Add a Privacy Policy for an Ecommerce Website

Step 1: Open a Privacy Policy Generator Website

There are plenty of generators online. One of the well-known generators is Shopify’s Privacy Policy generator.

You can also find other generators that may be more general or detailed. Each has everything you need to create a Privacy Policy for your business.

Step 2: Select Your Platforms

Depending on the generator, you may be redirected to a page where you must state the platform you’re using.

A Privacy Policy for mobile apps may be different from a browser website.

Step 3: Provide Your Business Information

The next section focuses on the general information about your store. Remember to include the country or state where your business is located.

It may be requested in this part of the generator or the later parts.

Source: Privacy Policy Generator

Step 4: Provide the Information You’ll Collect

Some generators may be more specific, recommending you state the specific information your customers will provide.

The MORE SPECIFIC you are, the BETTER.

Generators will also ask regarding analytics tools that your website might be tracking.

Step 5: Send Your Privacy Policy to Your Email

The generator will email your generated policy to you.

While generators use a general template, ensure you proofread your Privacy Policy before having it up on your website.

It helps ensure that the Privacy Policy will have everything you need for your business.

What Is a Privacy Policy?

An E-Commerce Privacy Policy is a legal agreement between businesses and their customers. It discusses how an eCommerce business collects, manages, and protects its customers’ data.

The information collected by an eCommerce site is personally identifiable information. If not protected, a business can face legal problems.

By having a Privacy Policy, businesses already lay out the information collected. They also inform the public what they do with this information.

It encourages transparency and lessens their liability as a business.

If your eCommerce store caters to more than one territory or state, you must follow all its privacy laws.

A common example would be Amazon and how they’re bound by international privacy laws to have a Privacy Policy.

It’s supposed to state that they protect ALL personal data. It is regardless of where that consumer is.

Why Should You Have a Privacy Policy for Your Ecommerce Store?

Privacy Policies can be treated as more than just your business’ legal requirements. This legal agreement can protect businesses and their customers in many ways.

What we do online results in data. There may be systems or bots in place to automatically collect personal information.

We need proper regulation to keep this information protected. Otherwise, unknown or dangerous individuals can use collected data in harmful ways.

Registered guests and website visitors are usually required to provide personally identifiable information.

There is a risk to their own personal data and businesses if websites don’t follow privacy laws.

Here are the reasons why your online store should have a Privacy Policy.

Legal Obligation

Privacy Policies are generally considered a legal requirement for businesses. It’s because of the privacy laws in place.

They ensure that every eCommerce store can manage and protect sensitive data.

The law requires Privacy Policies as it involves data collection. Businesses must protect these personal data according to privacy laws.

The National Conference of State Legislatures (NCSL) has made a guide in the United States.

It applies to all 50 states and US territories. It helps legislators create laws, including those which protect personal information.

There are also several global privacy laws affecting our local Privacy Policies.

An example would be the General Data Protection Regulation (GDPR) used to protect the private data of European Union (EU) citizens.

Since the EU actively participates in the global market, this regulation affects everyone. It includes businesses and customers tied to the EU.

Customers also have the right to opt-out of data collection. It can limit access to the benefits of the eCommerce store. It allows users to choose which information sites can collect.

Protection for Minors

Privacy laws take into consideration the online presence of minors. The requirements for this clause may vary depending on your country or state.

However, there is a growing global concern for the activities of minors online. It’s an increasing issue, especially for websites catering to adult or sensitive products.

It helps to add a separate clause for minors. It is applicable even if your business doesn’t cater to these products.

It informs parents that the eCommerce site is not liable for a child’s actions on their site.

It helps businesses as they can’t track every user online. Not only does it promote transparency on the site’s limits, but it also lessens its liability.

Required by Third-Party Services

Businesses usually partner with third-party services, especially with payment processors. One of their requirements is a Privacy Policy to follow the Payment Card Industry (PCI).

Third parties deal with any personal information, including credit card details. In cases of recurring payments, sites have this information collected automatically.

Privacy laws require all eCommerce stores to inform users of this arrangement. Other third parties may get involved in collecting data.

They can track customer browsing information. Sites like YouTube, AdSense, and more can track a customer’s data and behavior.

These third parties use them for marketing products and services to your customers.

Your Privacy Policy should include a clause on other third parties. It is applicable whether your site is currently doing this or in the future.

Upholds Transparency

Your Privacy Policy informs its consumers of how you collect, manage, and protect their personal data.

This effort to inform them helps in being open with your processes as a business.

Collecting personal information needs the trust of the consumers. They should be made aware of what happens to their personal information.

It encourages consumers to be open to sharing this information, making transactions seamless. The clearer your Privacy Policy is, the less liability you have.

A proper policy informs the users of your eCommerce store of their privacy concerns. Your customers must also agree to your Privacy Policy before using your services.

Required for Remarketing Purposes

As stated, third-party services may observe how consumers behave on your site. It includes the links your customers click, the products they view and buy, and more.

These third parties use that behavior to show ads and suggested products. It’s a system to encourage customers to buy similar products or accessories.

It also provides these third parties with statistics. Then, they use these to analyze the business’ performance. They collect information to see how the business can further improve.

What Should Your Privacy Policy Contain?

What Should Your Privacy Policy Contain

All data collection usually means providing personally identifiable information. Privacy laws require businesses to have policies and security measures.

How can you properly disclose the Privacy Policy of your online store?

You can do this by itemizing the data your site collects into a comprehensive list. Detail everything your customer needs to know to minimize liability and establish transparency.

Considering these different factors is important when writing a Privacy Policy for eCommerce businesses. For this part, we will use Amazon’s Privacy Policy as an example.

Type of Customer Data Collected

A Privacy Policy tells the customers about the personal information you collect. It aims for complete transparency, especially if you’re collecting sensitive information.

It can include information like a person’s shipping address, contacts, and financial details. Itemizing the different information you collect is a great way to do this.

It makes the information easier to understand for different readers. It’s important to be specific and transparent, especially in this area.

A great example would be Amazon’s list. While some factors may seem vague, they supply examples.

These can help the customer understand their point.

How You Use Their Personal Information

It’s important to inform your customers about how you use their personal data. It will always be applicable, whether sending products to them or improving their user experience.

It’s also important to disclose if you share their information with other services. These are services that help your business.

However, they may also collect information for their statistics.

It’s great to practice having a structured list and explaining each point. This method helps your customers better understand how you use their data.

How and Why You Share Their Personal Information

It’s important to state which third-party service providers are connected to your business.

The most common example would be how businesses partner with PayPal. Payment processes require payment information that businesses shouldn’t disclose to others.

They also include the business transfers section. It would state how customer information is handled. It’s an important clause if your business merges or is fully acquired by another.

Cookies and Similar Technologies

Websites may use cookies and web beacons to collect device information. Websites use this data to personalize your customer’s experience on your site.

You can have a separate Cookies Policy. However, it’s also important to state these technologies in your Privacy Policy. They still collect and store data for eCommerce businesses.

Opt-Out Options and Privacy Rights

It’s important to remind your customers about their right to privacy. It includes an opt-out of giving some information, which adheres to privacy laws.

They also promote trust between the business and customers. By having this, you’re giving your customers the freedom to choose their privacy.

However, it’s important to specify which information will be required. Sites would need some information for customers to use their services.

How You Handle and Collect Personal Information From Minors

Having this clause is important if you have visitors under the age of 13. It becomes more applicable if you collect information from them.

You also need to explicitly state that those under 18 also need parental consent to buy a product.

You’ll have less liability if you accidentally collect their information.

How You Protect Personal Information

An eCommerce store should also inform its customers of protection details. It ensures customers that there is a system in place for their personal information.

Lack of security would be an offense to Privacy Laws.

You can implement security measures to keep sensitive information protected. These can include firewalls, encryption, and more.

Contact Information

An eCommerce business needs to include a clause about how customers can express their concerns. This section would include the following:

  • Email addresses
  • Physical address
  • Phone numbers

If there are other ways to reach out to the business, it needs to be included in this segment.

It also includes information about the site’s support team and a data protection officer. These are parties that people can reach out to regarding their privacy issues.

Why Is the Data Collected?

There are many reasons sites collect data, especially for an eCommerce business. These reasons mostly focus on marketing and statistics.

Here is how businesses and third parties normally use customer data.


Advertising methods, like remarketing or retargeting, use collected data. It’s when the algorithm makes suggestions based on past purchases or views.

It’s why you would see ads for products you may have bought even on a different website. Businesses need to disclose this in their Privacy Policy.

These are also used for marketing communications. ECommerce stores do it through emails and other forms of communication.

People have the right to opt out of these marketing tactics.

However, the general information is still counted as statistics for the website’s performance. It shapes how an eCommerce store can change its strategies.

Online Purchases

Besides marketing, an e-commerce website collects personal information whenever we make purchases. It would include the collection of payment information.

They need to ask for information like contact numbers and delivery addresses. The site requests these from all customers.

In return, customers have to agree to these to make their purchases. It applies to all customers, whether they have an account or not.

This information is also automatically data stored by the website. It’s especially true for those who have accounts on the site. The site then uses this for future purchases.

Where Should You Display Your Privacy Policy Agreement?

Display Your Privacy Policy Agreement

You should place your Privacy Policy where customers can easily find and access them. It helps remind the customers of its importance so they can enjoy your services.

It’s also important that they agree to it before proceeding to your site.

Most websites use a clickwrap method. It ensures that customers have reviewed your Privacy Policy.

The box they tick for this method is their consent and explicit approval of this agreement.

Here are the best places where you can display your Privacy Policy Agreement. For this part, we will use Etsy’s website as an example.

Sign-up Page

Websites usually put their legal documents on their customer registration page.

Doing this helps the customers easily access important documents. These usually pertain to their participation on your website.

It’s where their information is usually collected. It also makes it one of the best ways to remind customers that they are aware of your policies.

It can be a simple statement like “I have read and accepted the Privacy Policy.” In this statement, you can link your policy for the customer to click on.

Website Footers

Legal documents and general information are also found on the footer or the bottom of the page. These links should be accessible anywhere on the site.

The footers provide the general information the customers need to understand your business. Having these links organized on the footer of your site is important.

These efforts make it easier for your customers to learn about your online store and how they can get in touch.

Checkout Forms

The final checkout page also requires customer data, especially financial information.

It is where they may provide their credit card details. It can also redirect them to third-party service providers to process payments.

The site uses this page to collect payment information. It’s important to remind your customers about the data you’re collecting.

Customers must agree to your Privacy Policy when proceeding with the payment process.

It’s an important section, especially for website visitors. These users may have more limited access to your site’s benefits.

It includes immediate access to help from customer support.

Email Newsletter Sign-up Forms

The email newsletter sign-up forms are a great place to display your Privacy Policy. It’s where your site requires customers to voluntarily enter their email addresses.

By providing this information, they should also agree to your Privacy Policy.

Your customer’s email address is information that your business should protect. These can be easily linked to other accounts and traced back to the owner.

Frequently Asked Questions

You may have more questions about Privacy Policies and how they’re important.

We’ve gathered the commonly asked questions to help you understand more about them.

How Can I Protect My Personal Information?

There are many ways to protect your personal information online. It’s important to know them, especially as a customer.

There isn’t a 100% guarantee that personal information online will stay for your eyes.

However, these steps will limit the collection of your information without your permission.

Read the Legal Documents

It’s common for people not to take documents seriously, especially when they’re online. However, being aware of the general information is important.

It’s especially true for legal documents like Terms and Conditions or Privacy Policies.

These documents remind customers of their rights as consumers of the site. It also maintains the security and safety of all the customers and the company.

Secure Your Social Media Accounts

Using strong passwords and different authentication methods helps secure your social media. It increases your accounts’ security levels and who can access your information.

Limiting logins to unknown devices or unprotected public WiFi is also best. Connecting to them may make your information prone to data theft and hacking.

We recommend using a password manager. It’s best used if you have many different accounts and passwords. This application will help keep a record of your passwords securely.

Don’t Overshare

While it may be tempting to share our lives online, posting too much about yourself can be dangerous.

Sometimes, it’s still possible for sites to track your personal information. It can happen even if your profile is set to private.

Keep track of your privacy settings. All social networking websites allow their customers to tailor their account privacy settings.

It gives the customers control over what they share with the public.

Be Careful of Dangerous Links

It’s possible to be redirected to other websites while browsing through one. Be careful with these pop-up sites, which may be dangerous.

Sometimes, they may be out of the businesses’ control.

These sites can easily track your browsing activities and information without your knowledge. It may make your accounts prone to hacking and other cybercrimes.

Stay on trusted websites and close any suspicious websites immediately.

What Is the GDPR (General Data Protection Regulation)?

The General Data Protection Regulation, or GDPR, was written to protect consumers’ data.

This added measure aims to give maximum protection to the personal information collected by websites.

Its main focus is EU citizens. However, it can also affect consumers outside the EU who buy from an eCommerce store based in the EU.

These apply to eCommerce stores based in the EU or those that affect EU citizens.

Fines for non-compliance can range from €20 million or 2-4% of the annual global turnover. Whichever is higher will be the charge towards the business.

What Is the CCPA (California Consumer Privacy Act)?

The California Consumer Privacy Act (CCPA) gives consumers information control. It means your customers have the right to opt-out of giving information.

It helps eCommerce stores write their Privacy Policies. They also give your customers the following:

  • The right to know the information you collect and how you use it
  • The right to delete the shared information (with some exceptions)
  • The right to opt-out of a sale
  • The right of non-discrimination

How Is Google Analytics Relevant to Consumer Data?

Google Analytics is one of the most well-known services online. It’s used to help businesses track their website’s performance.

Through their data collection, they can provide statistics for eCommerce stores. It can help a small or medium-sized commercial website study user behavior.

The information is then used to improve marketing, engage visitors, and increase traffic.


A business’ Privacy Policy serves as legal protection. It goes for both businesses and their consumers. It helps promote customer trust and transparency between parties.

Most of all, it protects businesses from legal issues. It’s especially true when they properly lay out their terms.

Keep this information in mind while you make a Privacy Policy for your eCommerce store.