How To Write a Website Privacy Policy

Chances are, at some point today, you were on a website with a privacy policy. And chances are, you scrolled right past that policy without giving it a second thought. You’re not alone—a lot of people treat privacy policies like digital fine print that’s too boring or complicated to bother with. But the reality is we live in an era where personal data is increasingly valuable, and data breaches can do significant reputational and financial damage to a business.

And so these seemingly mundane documents are actually quite important—they help mitigate business risks and build customer trust. This guide explains how privacy policies serve small business owners in the digital age and how to write one for your website.

What is a website privacy policy?

A website privacy policy is a legal document that describes how a website or other digital service collects, uses, and manages personal data input by users. Think of it as a statement of transparency to inform users about what happens to their data when they interact with your site.

The content and format of a privacy policy depend on the laws in place where the website is registered, where your users are located, and what kind of business you conduct. Broadly, however, all privacy policies outline what personal data the site collects from users, from basic details like names and email addresses to more sensitive data like IP addresses, payment information, or browsing behavior and other online activities. Privacy policies also detail why a site collects such data, how the site owner(s) will use it, and whether they will share it with any third parties. A privacy policy typically also explains users’ rights regarding their data, such as their ability to access, update, or even delete their information.

Why are privacy policies important?

• Regulatory compliance
• Legal risk management
• Customer experience

Privacy policies are important because they’re a regulatory requirement in many places if you collect any personal information from your site’s visitors. They can also reduce your exposure to customer lawsuits. Finally, privacy policies are a key factor in building customer trust in the digital age.

Regulatory compliance

Legal requirements for privacy policies vary by jurisdiction and industry, with several key laws mandating their use and content. The General Data Protection Regulation (GDPR) is one of the most significant and wide-reaching sets of laws governing websites’ use of customer data. It requires privacy policies for any business processing data belonging to residents of any European Union (EU) member state. Other countries have privacy laws as well, so check for local regulations.

There are no comprehensive federal data privacy laws in the US regarding privacy policies across all industries and websites. However, there are state-level laws and federal laws that mandate privacy policies for certain industries. For example, the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA) mandate privacy policies for businesses serving California consumers that meet specific revenue or data processing thresholds. The California Online Privacy Protection Act (CalOPPA) casts an even wider net, requiring privacy policies for any commercial website that collects personal information from California users, regardless of where the business is located.

Sector-specific federal laws include the Health Insurance Portability and Accountability Act (HIPAA), which requires that health care organizations provide a privacy notice, including for any digital products that might contain or process patient data. There’s also the Gramm-Leach-Bailey Act (GLBA), which requires financial institutions to disclose privacy policies, and the Children’s Online Privacy Protection Act (COPPA), which requires websites collecting user data from children under 13 to post privacy policies. The Family Educational Rights and Privacy Act (FERPA) requires educational institutions to post privacy policies for the processing and storage of student records.

Some private-sector online services and third-party apps also require privacy policies as part of their terms of use agreements, including Amazon, Apple, Google (Google AdSense, Google Analytics, and Google Play Store), and Meta.

Legal risk management

Privacy policies are also a crucial component of risk mitigation in today’s litigation landscape, where data privacy lawsuits on behalf of a group sharing a common issue (class action suits) have exploded, representing one of the fastest-growing categories of business lawsuits. A well-crafted privacy policy that includes “clickwrap” policies (where users click “I accept”) is generally considered less risky than one that relies on “browsewrap” agreements (where use of the site implies consent).

Privacy policies can include limitation-of-liability clauses (which seek to reduce your legal responsibility), forum selection clauses (which establish where you can be sued), and mandatory arbitration agreements (to avoid lawsuits altogether).

Customer experience

Privacy policies can enhance customer experience by building trust and transparency with users. When customers encounter a clear, accessible privacy policy, it demonstrates that your business takes data protection seriously and is honest about its practices. This can help cultivate user willingness to share information, create accounts, and engage with your services. Modern consumers expect privacy policies as a standard sign of legitimacy, credibility, and professionalism. Not having one can immediately signal untrustworthiness or disorganization, which could hinder your business from making sales. In fact, according to PwC, 40% of customers no longer patronize a business due to a lack of trust.

What kind of data can a website collect?

• Personally identifiable information
• Technical and device data
• Behavioral and usage data
• Tracking and analytics data
• Communication data

Websites can collect a surprisingly wide range of data about their visitors, underscoring why website privacy policies are so crucial. Some key data types include:

Personally identifiable information

Companies might collect the following data to build detailed customer profiles, enable targeted advertising, personalize services, verify account holder identities, and generally gain insights into consumer behavior and preferences.

• Names

• Email addresses

• Phone numbers

• Physical addresses

• Billing information

• Social Security numbers

• Driver’s license numbers

• Dates of birth

• Demographic information (e.g., race, sex, gender identity, sexual orientation, etc.)

• Photos and profile pictures

Technical and device data

Companies may collect the following technical and device data to optimize website performance. This information can also be used to detect fraud, deliver location-based services, ensure compatibility across devices, and analyze user behavior patterns.

• IP addresses

• Geolocation data

• Browser information (e.g., browser type, version, settings, etc.)

• Operating system information

• Physical device information (e.g., mobile device, laptop, etc.)

• Screen resolution

• Device capabilities

• Internet service provider (ISP) details

Behavioral and usage data

Companies will track behavioral and usage data to better understand user preferences. This can help them optimize user experience (UX), personalize content recommendations, improve conversion rates, and identify purchasing patterns or obstacles to purchasing. This data may include:

• Pages visited

• Time spent on a page

• Click patterns

• Mouse movements

• Search queries

• Purchase history

• Shopping cart contents

• Login times

• Frequency of visits

Tracking and analytics data

Companies collect tracking and analytics data to understand user behavior, optimize marketing campaigns, and generally improve UX through data-driven insights.

• Cookies: Small text files on users’ devices to remember preferences and logins.

• Session data: Information about a user’s visit duration, pages viewed, and actions taken during a single browsing session.

• Referral sources: How users found your site.

• Conversion paths: The sequence of touchpoints a user takes before completing a purchase.

• User journey: The complete path a user takes through a website or app, encompassing several of the points detailed above.

• A/B testing participation: Records of which version of a webpage, feature, or UX design a user was shown.

• Scroll behavior data: Information about how far users scroll down pages before they stop reading.

Communication data

Companies may collect the following communication data to improve customer service, analyze customer satisfaction and brand regard, personalize support experiences, and gather product feedback.

• Email correspondence

• Chat logs

• Customer service interactions

• Survey responses

• Form inputs

• Comments

• User-generated content

How to write a privacy policy

1. Identify applicable laws
2. Conduct a data audit
3. Define your data practices
4. Outline security measures
5. Explain user rights
6. Use clear and accessible language
7. Include contact information
8. Update regularly

The specific requirements of a privacy policy’s format and content will depend on where your website is registered, where your customers are, and what industry you’re in.

If you’re nervous about writing one yourself, you can hire an attorney who specializes in consumer and digital privacy matters to draft one for you. Alternatively, you can use template-generating tools like Shopify’s free privacy policy generator.

Generally, you can follow these eight steps:

1. Identify applicable laws

Your first (and probably most important) step is to determine what consumer privacy and data protection laws apply to your business, taking into account both where you’ve set up shop and the locations of your customers. You must comply with the law of every jurisdiction in which you operate or have customers.

2. Conduct a data audit

Identify exactly what customer data you plan to collect, like names, email addresses, IP addresses, payment information, and any tracking data. It may be helpful to store information in a spreadsheet for reference later.

3. Define your data practices

Write down how you plan to use all the kinds of data you’ve audited. Be specific about each use case, such as processing purchase transactions, providing customer service, personalizing content, or targeting marketing campaigns. This can help you determine what data is truly necessary for your business operations, and ensure you are minimizing the scope of collection without impeding goals.

4. Outline security measures

Detail what security safeguards will prevent unauthorized access to user data, such as encryption, multifactor authentication, and data breach response procedures. Specify your data retention periods and the reasons for their duration.

5. Explain user rights

Include information about users’ rights over their data, such as their right to access data, correct it, delete it, withdraw consent, or opt out of data collection altogether. You should also include clear instructions for how to exercise these rights.

6. Use clear and accessible language

Write in clear and concise language that users can easily understand, avoiding legal jargon. Make your content easy to parse by using effective formatting with headings, subheadings, and, where appropriate, bulleted lists. Make your privacy policy easily accessible by linking it in your website footer menu and surfacing it during signup processes (e.g., clickwrap pop-ups).

7. Include contact information

Provide your business information and contact details, including a designated support email address for privacy-related inquiries or concerns.

8. Update regularly

Regularly update your privacy policy to reflect changes in your data practices or emerging privacy regulations. You may even have a legal obligation to do this. For example, under laws like the CCPA, you’re required to update your privacy policy at least once every 12 months and notify your customers when you’ve made changes.