The Ecommerce Privacy Policy Guide

How to Create a Privacy Policy
Laws that Impact Ecommerce Privacy Policy
Key Components of an Ecommerce Privacy Policy
Where to Publish Your Privacy Policy

How to Create a Privacy Policy

This guide was created in partnership with ONELIVE ecommerce technology partner, Termly. For more information on Termly, ONELIVE's exclusive rates, and other partners, visit our Technology Partners page here.

If you are in the process of developing an ecommerce website, then you're going to need a privacy policy.

This is for two essential reasons: Compliance with applicable privacy laws and to show consumers you're a trustworthy site they can reliably purchase from.

Below, you'll explore different methods for creating a privacy policy for your ecommerce website, applicable laws that might impact your online store, how privacy policies help build consumer trust, and more.

There are several common ways to make a privacy policy, and some are notably better than others.

The method you should use depends on three general factors:

what laws apply to your business
how much personal data you collect
what kind of data you collect

Here are the standard ways ecommerce websites create privacy policies, and some pros and cons associated with each method.

Option #1: Use a Managed Solution, Like a Privacy Policy Generator

One of the easiest ways to make a privacy policy is to use a managed solution, like a Privacy Policy Generator.

Here's a few popular privacy policy generators to help get you started, including one from our partners at Shopify:

Privacy Policy Generators ask simple questions about your business and how it uses and processes personal information. All you need to do is answer the questions honestly and accurately, and it will create a unique policy based on your answers.

Once generated, manually editing your ecommerce website privacy policy will ensure a much greater degree of detail and accuracy - allowing you to use your own wording to educate visitors about your site's unique data practices.

Option #2: Use a Free Privacy Policy Template

You can also make a privacy policy by using a free template. These usually have all the formatting completed for you and feature some pre-filled sections and clauses.

To use one, you just need to manually fill in the blank sections of the template with the relevant information about how your ecommerce store collects and uses consumer personal data. If any clauses in the template aren’t relevant to your business, you can remove them. You can also add clauses that may be missing.

Option #3: Write a Privacy Policy from Scratch

You can also write your own privacy policy, but this is only recommended if you don’t collect personal data and are posting it to keep your users informed, or if you have a lot of technical and data privacy knowledge.

Option #4: Consult a Privacy Lawyer or Professional to Create One for You

Rather than writing a privacy policy yourself, you could consult a privacy professional or lawyer and have them make one for you.

Because of their expertise in the industry, they can typically help businesses create legally sound, reliable policies.

Option #5: Use an LLM, like ChatGPT, to Create One for You

LLMs and AI have taken over, and some businesses are using them to create privacy policies for their websites.

While these are getting better everyday, it's important to note these are not perfect. This approach saves time but does not eliminate the need for revision and confirmation of accuracy and applicability to your specific business.

Ecommerce sites usually fall under the legal authority of one or more privacy laws. Here’s a list of some of the more significant privacy laws that might impact your website:

Each of these privacy laws requires a privacy notification or policy of some kind that features the following information:

What data you collect
Why you’re collecting the data
If you share or sell it to others
Who it’s shared with or sold to
What rights do consumers have over their data
How they can act on their rights
How consumers can contact you

The specific clauses you’ll need in your ecommerce privacy policy depend on what laws apply to you and other unique factors about your business.

That said, here are quick summaries of the most common clauses that appear in almost every privacy policy.

1. Policy Introduction

Your privacy policy should have an introduction section that includes important introductory information, including:

The introduction should also lead people into a clearly labeled table of contents so they can easily navigate the rest of your policy.

2. What Personal Data You Collect

When creating your privacy policy, you must explain the types of data your site collects from visitors.·

Including this information in your website's privacy policy is required by essentially every data privacy law. It also helps to instill a sense of trust with your visitors.

3. How You Use Personal Data

In addition to data types, you also need to explain how your website uses the collected data. Under the GDPR, this is called your legal basis.

Your privacy policy should explain the types of data it collects on visitors that are relevant to your specific website.

Common types of data that ecommerce websites collect on their visitors include:

Internet Protocol (IP) addresses
Names
Home addresses
Email addresses
Phone numbers
Dates of birth
Payment information
Visit timestamps

Including this information in your website's privacy policy also helps to instill a sense of trust with your visitors.

4. Data Security Measures

Your privacy policy should have a clause that lists the security measures you have in place to keep consumer personal data safe from unauthorized access, breaches, or other cybercrimes.

Not only does this clause help align your policy with privacy laws, but it also reassures users that their data is in good hands.

Don’t give away too many details about how your security systems work. Otherwise, bad actors could use it to target your business. Including a simple bullet list will suffice.

5. Children’s Data Clause

All privacy policies should have a children's data clause, even if your ecommerce site does not target or purposefully collect data from minors.

If you don’t target minors, use this clause to explain to legal guardians how they can contact you if they believe you accidentally collected information about their child. This aligns your site with children protection laws.

If you do target minors, you will likely need a separate children’s privacy policy and will have to meet more strict legal requirements.

6. Changes To Your Policy

Privacy policies are living documents that should be updated whenever your data collection practices change, so have a clause in your policy that explains to users how you’ll communicate these changes when they go live.

For example, if your website begins to collect a new type of data on visitors, or if you use existing visitor-collected data for a new purpose, you need to update the privacy policy while also notifying visitors.

Under laws like the GDPR, consumers need to be given the new policy and have a chance to consent or disagree to it.

Under the CCPA, you’re required to update your privacy policy at least once every 12 months.

7. Cookies and Other Trackers

Your privacy policy also needs to feature a clause about cookies and other trackers. Ideally, it’ll also include a link to your updated cookie policy.

This is because many websites use cookies to track their visitors' activities, create personalized experiences, and analyze their web browsing behaviors, all of which is considered a form of data processing by privacy laws.

The cookies section should tell visitors how your website uses these cookies, which might include reasons like keeping visitors logged in to their accounts or showing personalized products or content.

For a higher level of transparency, include steps your visitors can take to block cookies in their web browsers – a feature that is available in all major web browsers, such as Chrome, Firefox, and Microsoft Edge.

8. Company Contact Information

It’s also important to have a clause in your privacy policy that includes your company’s contact information.

This helps instill trust while simultaneously enabling visitors to find answers to their privacy-related questions that they have. It also helps your website better align itself with privacy law requirements.

If possible, provide multiple contact methods, like a phone number, email address, contact form, and physical address.

After you make your privacy policy, you need to post it in a few prominent places across your ecommerce site, including the following:

Website footer
Payment screens
Login or Account Creation screens
Privacy Center
Wherever data is collected

There’s a lot to consider when creating a privacy policy for your ecommerce site. It needs to meet the requirements of all privacy laws that impact your business.

But a well-rounded, honest, and easy-to-read policy also shows consumers that you respect their personal information. This helps establish trust and reassures them that they can safely use your website.