Privacy Policy Best Practices for ECommerce Merchants

ECommerce merchants should carefully develop their privacy policies. It is not only a Visa and MasterCard requirement that a privacy policy statement should be made available to website visitors and potential customers but it is also a great way to ensure consumers that their privacy is a top priority for the merchant and that it is adequately protected. Following is a short list of best practices that you should adhere to when designing your own privacy policy:

• Develop a clear, concise statement of your privacy policy. This practice, as well as the following one, may be subject to legal requirements. In order to adequately address consumer concerns about providing personal information, your privacy policy should answer the following questions:
  • What customer information is collected.
  • With whom the information is shared.
  • How customers can opt out.
• Make your privacy statement available to visitors to your website through links on your website. Your customers should be able to easily locate your privacy statement. Consider placing the link into your website's header or footer which, in most cases, will make it accessible from every page of your website.
• Sign up with a privacy organization and post a "seal of approval" on your website. Providing a "seal of approval" from a major privacy program is a great way to assure consumers that you are serious about protecting their personal information and are taking the necessary measures to do so. To obtain such a seal, you can register with a program such as TRUSTe or the Better Business Bureau's BBBOnLine Privacy.

Chargeback Basics

A chargeback is a payment card transaction that a card issuer returns to a merchant processing bank - and most often, to the merchant - as a financial liability. In essence, it reverses a sales transaction, as follows:

• The card issuer subtracts the transaction dollar amount from the cardholder's account. The cardholder receives a credit and is no longer financially responsible for the dollar amount of the transaction.
• The card issuer debits the merchant processing bank for the dollar amount of the transaction.
• The merchant processing bank will, most often, deduct the transaction dollar amount from the merchant's account. The merchant loses the dollar amount of the transaction.

As you can see, for merchants chargebacks can be costly. You lose both the dollar amount of the transaction being charged back and the product or service that was sold. There are also internal costs, associated with the processing of the chargeback. The following posts will discuss, in details, the reasons chargebacks occur, the available chargeback remedies, strategies for avoiding chargebacks and best practices for chargeback monitoring. The various types of chargebacks will also be scrutinized.