How willing are you to buy online? If you're skeptical, you can't expect your customers to feel any differently. Before they'll transact, customers need to feel safe.

Part of that safe feeling is the knowledge that their privacy is respected, which is why Internet privacy policies are so important. Research shows that consumers are more likely to complete online transactions if they know beforehand how their personal information is going to be used.

In fact, President Clinton has proposed legislation that would require online businesses to disclose their privacy policies even before customers are asked to register.

What is a privacy policy?

On the Internet, privacy is not the same thing as security. Technology dictates how information is kept secure over the Net, but all it takes to respect your customers' privacy over the Internet is honesty.

Your online business should have a privacy policy openly accessible from the home page. It should fully disclose the ways you intend to use any personal data you collect from your customers names, email addresses, consumer preferences, etc.

Why have a privacy policy?

Polls show that almost half of all online shoppers are more nervous about how their personal data is being used than they are about the security of their credit card transactions. People who have never bought online are even more scared of privacy violations.

The bottom line: You can increase online sales, boost confidence in your company, and reduce the chances of receiving false customer information if you prominently display a privacy statement on your Web site.

What do I need to do?

Don't wait for the law to meet your customers' concerns.

Write a policy.
Draft a statement that tells your customers what you want to know about them and why. If possible, give choices that let users decide how their data may be used.

Be honest and straightforward.
Ask customers for their permission, reveal how they can change or access their data, and describe honestly the circumstances under which you may release that information to other parties. See BuyerZone's privacy policy as an example.

You don't have to write such a statement from scratch. A number of Web sites provide sample privacy statements that you can customize for your own business.

Get a seal of approval.
Even better, you can register with third-party evaluation sites like TRUSTe (www.truste.org) and BBBOnline (www.bbbonline.org), which can provide symbols for your Web site to show you abide by their privacy regulations. You can get their seals for under $300 a year, or slightly more if your revenues are over $1 million.

Getting such a seal will take some administrative time and effort, but when the reward is integrity with your customers, it's worth it.