Privacy Policy for Shopify Stores: A Complete Guide for Merchants

The importance of a privacy policy for Shopify stores has been broadly discussed. This topic appears in various Shopify forums, blogs, and eCommerce meetings. However, the step-by-step process for crafting a comprehensive Shopify store policy needs further exploration. It requires fresh perspectives.

That’s what this article seeks to provide.

A privacy policy for Shopify stores is no longer an afterthought; something you stick to your website footer to fill up space. Indeed, having a privacy policy is now mandatory in many jurisdictions. Global laws require platforms like Shopify – and the merchants who use them – to have these tools.

A privacy policy, refund policy, and return policy form a comprehensive framework for Shopify store policies, ensuring customer trust and legal compliance.

This three-part series will guide you through the essential steps for crafting effective Shopify store policies, regardless of your legal background.

What is a Privacy Policy?

A privacy policy is a document that explains how a business collects, uses, stores, discloses, and protects personal information from its users or customers.

This legal statement provides transparency about the types of user data a business collects, such as names, email addresses, and payment details, explaining how the company uses this data – whether for processing transactions, enhancing services, or marketing purposes.

The policy also outlines how external stakeholders access the data and the security measures established to protect said data from unauthorized access or breaches. Furthermore, it informs users of their rights, including the ability to access, correct, or request deletion of their information.

As intimated earlier, a privacy policy for Shopify stores is non-negotiable for businesses that collect personal information. It demonstrates your compliance with data protection and privacy standards and helps users make informed decisions about their interactions with your company.

Why is Privacy Policy for Shopify Stores Important?

The first notable mention of privacy policy dates back to an 1890 Harvard Law Review article "The Right to Privacy" by Samuel D. Warren and Louis D. Brandeis. The article, coupled with legislations like Germany's 1970 Federal Data Protection Act (Bundesdatenschutzgesetz) and the United States Privacy Act 1974, set precedence for formal data protection guidelines and principles that we have today.

As the General Data Protection Regulation (GDPR) came into effect in the European Union, and COVID-induced chargeback fraud and data breaches became rampant, the need for data protection guidelines grew. Consequently, data privacy policies have become a government requirement for all eCommerce businesses.

• They ensure compliance with data protection laws and regulations, such as GDPR, CCPA, etc. – without which businesses can incur legal penalties and fines.
• A privacy policy shows users you’re part of the good guys and will not misuse their data, which fosters trust and positive customer relationships.
• They stipulate data protection measures and data handling risk mitigation strategies you've installed for addressing privacy-related concerns.

Having clear Shopify store policies equally helps protect your business against false chargebacks and disputes.

Creating an Effective Privacy Policy for Shopify Stores

There are three steps to drafting a comprehensive Shopify store privacy policy. You can either use Shopify's privacy policy generator, adapt your store policy from another eCommerce store’s document, or craft your privacy policy from scratch to suit your preferences.

Let’s examine what goes into each of those processes in detail.

1. Using a privacy policy generator by Shopify

Shopify constantly develops tools and resources to help eCommerce businesses selling on their platform solve pertinent business issues without hassle. One of these tools is the Shopify privacy policy generator.

To use the Shopify policy generator, all you’ve got to do is fill in the relevant fields, and voila! Shopify will email you a personalized website privacy policy template for your business. As they stated on their website, the document will provide basic information you can customize in line with your storefront configuration and business practices.

This approach is recommended if you don’t have the legal bandwidth to ensure the clauses and provisions align with global data privacy laws and platform requirements. It also saves you time. Data privacy experts have put the document together, and it has the basic, accurate details you need.

2. Adapting Your Shopify Store Policy from Another Store’s Document

Another standard practice for creating your Shopify privacy policy is to take cues from the policy of another store you admire. For this approach, you download the policy of a notable Shopify store or an eCommerce website in the same vertical and work from that. You can rework the document in Google Docs and tailor the policy to your needs by adding, removing, or editing existing language and clauses. But if you’re satisfied with the document, you can add your company details where needed and leave the rest unchanged.

While this approach saves you time, the caveat is that you must read every word, phrase, and clause carefully to prevent potential legal issues. You don’t want to copy-paste another company’s policy, only to face lawsuits due to unverified clauses and loopholes.

3. Craft Your Shopify Store Privacy Policy From Scratch

If you have the legal knowledge and experience (or resources) to organically write an effective privacy policy for Shopify stores, the DIY approach is the most effective option.

The document should cover all the essential aspects we noted earlier, including:

The User Information You Collect

Privacy policies detail the personal data collected and how they are gathered, including a registration checklist, such as:

• Names
• Email
• Billing information
• Shipping information
• Phone numbers
• Credit card information
• Browser type
• IP address
• Device ID
• Cookie data
• The routing/referring website, if applicable

Even if some data doesn’t seem personal, legal frameworks like GDPR and CCPA might consider it so. Research how Shopify handles such data. Here's an example from Brez:

Your Reason and Process for Collecting User Data

Global data privacy laws like GDPR and CCPA mandate online services to disclose how and why they use personal data. To ensure compliance with such standards, you must explain the necessity and process of the data collected, such as:

• User identity for identification, personalization, account management, or communication purposes.
• Email addresses for order updates and marketing.
• Shipping addresses for delivering orders.
• Payment details for transaction processing.
• Cookie data for advertising and security.

Again, privacy laws like GDPR require data collection for specific, lawful purposes only.

Who Can Access User Data And Why Do You Grant Access?

Data privacy laws demand disclosure of any third parties that can access user data and why you share the data with such third parties. Such disclosures ensure transparency, accountability, and security. Providing this information empowers users to exercise their rights, such as requesting access, correction, or deletion of their data.

How You Process Payments

Information about payment processing methods is a crucial clause in your Shopify store policy. It explains the tools and platforms you use to collect and process customer payments. Most Shopify stores use third-party Shopify payment processors and the native payment system. Disclose that in your policy if that's you.

Your Shopify Store User’s Rights

Privacy policy for Shopify stores must equally disclose user rights like accessing their personal data, requesting corrections, and seeking deletion of their information under certain conditions. Users can also obtain their data in a transferable format, request that data processing be restricted, or withdraw consent previously given. Put these into consideration when crafting your Shopify store privacy policy.

Your Cookies or Other Trackers Used

Generally speaking, Shopify stores use internet cookies to enhance user experience by remembering preferences and session information. Cookies help website owners track user behavior for personalization and analytics.

Therefore, most privacy laws qualify cookies as personal data. Your privacy policy must disclose that you use cookies or other tracking tools and the reason for such an instrument.

Data Retention, Safety, and Security Policy

Data privacy laws like GDPR require merchants to disclose data retention periods in their Shopify store data privacy policies so that users know how long a website will store their data. You should store user data for as long as necessary to fulfill the purposes communicated to users.

Furthermore, your privacy policy for Shopify stores must include clauses detailing how user data are protected from data breaches, leakage, and unauthorized entities.

Policy Update and Changes

Your Shopify store privacy policy must reflect your current data processing activities. Include a clause of how you aim to achieve this. That way, users know when there are changes and have the option to agree or disagree.

Company Contact Details

The last section of a Shopify privacy policy is your company’s contact details. Privacy policy laws require you to add your contact details. It helps users reach your establishment to resolve any issues. Here's a sample from the Microdosed cannabis & mushrooms seller, Brez:

Privacy Policy for Shopify Stores: Best Practices

Every online business owner is subject to regulations. Data protection laws are one of the most consequential regulatory instruments globally. Below are some notable Shopify policy best practices and common missteps.

Shopify Store Privacy Policy Best Practices

• An effective Shopify store policy ticks all the boxes on how you collect, use, store, protect, and share user data, including user rights and Shopify payment methods used.
• Review and update the privacy policy regularly to reflect current practices and legal requirements.
• Make your policy easily accessible to your users. To add your privacy policy page to your Shopify store:
  1. Navigate to the "Online store" panel on the left bar of your Shopify homepage;
  2. From pages, click on the green "Add Page" button;
  3. Title your page as "Privacy Policy;"
  4. Paste your privacy policy content into the content field;
  5. Click Save when done; the page will be added to your footer menu.

• Highlight your Shopify privacy policy on relevant pages of your store. To achieve this:
  1. Click on "Navigation" on the left side of your Shopify store dashboard;
  2. Click on "Footer menu" under "Menus" to add your privacy policy to your footer for easy access;
  3. Click on the blue "Add menu item" option;
  4. Type "Privacy Policy" into the sidebar that pops up from the right;
  5. Click the “Add” below to finalize.

Final Thoughts on Creating Privacy Policy for Shopify Stores

The privacy policy concept has evolved rapidly with developments in data protection laws and the rise of digital commerce. The growing need to address digital privacy concerns, fueled by technological innovation and global tensions, makes this subject of utmost importance today.

Every online business is required to have a privacy policy. In addition to meeting compliance requirements, having one on your Shopify store demonstrates transparency. Use the best practices in this article to write, or improve, your Shopify privacy policy – and ensure your store does not violate global eCommerce regulations.

For an in-depth understanding of how store policies work together to reduce fraud, chargeback, and bad reputation, check out our subsequent guides on creating a refund policy and setting up a return policy.