For your eyes only

Entrepreneur, May, 1999 by Melissa Campanelli

You ask for their names, addresses, phone numbers - and customers wonder where they go. Let a privacy statement give your online shoppers peace of mind.

BrainPlay.com takes privacy seriously. An online retailer of educational toys and software based in Denver, the company has had a privacy statement on its Web site since its launch two years ago. While the company says protecting the privacy of Internet customers is a courtesy, privacy has become the subject of a heated legal debate among consumer protection groups, business associations, government agencies and the Clinton administration. Because the Internet gives companies the capability to gather enormous amounts of information about their customers, the worldwide computer network is both a marketer's dream and a privacy advocate's nightmare.

For BrainPlay.com, the issue is simple: Protecting privacy improves its company image and instills trust in its customers. "More people are paying attention to privacy issues," says Srikant Srinivasan, BrainPlay. com's founder and CEO. "Consumers today want to know - and have the right to know - about the companies they're dealing with and how their personal information is being used. The good companies are letting them know."

BrainPlay.com's privacy statement is comprehensive. It says the company doesn't sell names, e-mail addresses or other personal information about its customers to third parties. Customers who sign up for BrainPlay. com's monthly e-mail newsletter, which includes information about special offers, can remove their names from the mailing list at any time. The privacy statement also notes that while the company collects information about how visitors use the site, personal information is used only to update customers on a product's shipping status or to verify shipment receipts.

"Customers want to [know] we aren't doing anything with the information they're giving us," says Doug Smooke, BrainPlay. com.'s marketing services manager. "We've always tried to be as upfront as possible with our customers about our policies."

PRIVACY CATCHES ON

Today, many companies doing business on the Web post some sort of privacy policy on their site. While most companies gather and track at least some customer information for marketing reasons, only a portion of those collect personal information that can be traced to an individual consumer.

Information can be collected in a few ways: directly, when a customer provides information voluntarily, such as by registering at a site or signing a guest book; or indirectly, through a browser and its "cookie" file. (Cookies are computerized mechanisms that allow Web sites to identify individual Web browsers.)

Consistent with its privacy policy, BrainPlay. com doesn't collect cookies. "We make sure we let our customers know we're not tracking their computers," says Smooke. "But there may be a point in time when we start doing it." If BrainPlay. com were to use cookies, it would tell its Web customers. "If you're going to track cookies on your site, then you have to say that," Smooke says. "You need to tell the user what you're doing."

ONLINE SEAL PROGRAMS

Another way to build consumer confidence regarding privacy is to join an online seal program. These programs are much like a Better Business Bureau for the Web. If a company adheres to certain privacy principles, it's allowed to display a special seal of approval on its Web site.

In general, seal programs are designed to build users' trust in the Internet and to promote principles of fair information practices. They indicate to Web users that a company is using the information it collects in a responsible way.

Two leading privacy-seal programs are TRUSTe (Trusted Universal Standards in Electronic Transactions), based in Palo Alto, California, and BBBOnLine, a subsidiary of the Council of Better Business Bureaus (BBB) in Arlington, Virginia. To include either of these programs' privacy seals on its Web site, a company must agree to post a privacy statement that can be easily accessed and understood; it must also implement privacy principles that reflect fair information practices.

The TRUSTe seal is awarded only to Web sites that adhere to TRUSTe's established privacy principles and comply with TRUSTe's verification and consumer resolution processes. TRUSTe's privacy principles say that companies must inform customers what personally identifiable information is collected, how it is used and with whom the information will be shared, as well as what the site's policy is on correcting and updating personal information. These principles embody fair information practices approved by the U.S Department of Commerce, the Federal Trade Commission (FTC) and such prominent industry associations as the Online Privacy Alliance.

"When you see our trustmark, you can be assured, among other things, that the Web site will tell you exactly what personal information is being gathered about you and how it will be used," says TRUSTe's Anne Jennings. "Many companies that join see TRUSTe as a way to build trust with their consumer base."