The role of privacy seals in e-commerce.

• Author: Nielson, Blake

1. INTRODUCTION

   Privacy Seals were introduced to make consumers feel safer about their information that they put onto the internet. Privacy (or Web assurance) seals such as TRUSTe, CPA WebTrust, and BBBOnline have been developed by the e-commerce industry in order to persuade B2C consumers that a particular Web site can be trusted (Urban, 2000). Customers have a right to protection.

   E-commerce is the practice of selling and buying goods or services over the internet. Over the past few years, more and more companies have been investing in Electronic Commerce (Liu & Mackie, 2006). The big focus on internet business is the reason why privacy seals are needed. When consumers go to the grocery store they expect their personal information to be protected. The same should be true about online shoppers. When people go to the grocery store they expect that the people taking their card or ringing up their groceries are honest and trustworthy. Are we to a point where people have the same trust when making a purchase online? People are defiantly exchanging money over the internet. E-Commerce sales is now over 100 billion dollar a year industry. Experts believe that it will continue to grow as computers and internet access continues to become more and more accessible for individuals. Despite this steady growth, many customers are still hesitant to transact electronically (Bharat & Abhijit, 2010). Even though many are doing business online, not everyone has jumped on the internet to purchase goods or services.

   Electronic commerce has allowed organizations to enhance their economic growth (Hoff, 2002). As ecommerce sales increase security must also increase. In times of ubiquitous electronic communication and increasing industry pressure for standard electronic authentication, the maintenance of privacy, or "the right to be left alone" becomes a subject of increasing concern. The possibility of a "transparent human," whose vital information is up for grabs, can most easily be envisioned in the realm of e-commerce, due in part to the large amounts of data available, and in part to the high payoffs expected from using this data for marketing purposes (Berendt, Gunther, & Sarah, 2005).

   We still need to find how to protect consumers online. Some of the questions are: given the well-documented examples of online fraud, what is encouraging e-consumers to continue their forays into e-commerce (Moores, Do consumers understand the role of privacy shields in ecommerce, 2005)? Are customers more or less trusting then they were five or ten years ago? Also, once consumers know about privacy shields will they still purchase things on web sites that don't have an active privacy shield? A couple questions about online privacy are people educated enough on privacy seals and trust them to accomplish what they were put into place to do. Given these issues here are the hypothesis concerning customers and privacy shields.

   Hypothesis 1: More than half of the students still do not know the correct symbols of privacy seals.

   Hypothesis 2: More than half of the students would still buy things online without seeing a privacy seal as long as they feel that it looks like a reputable company.

   Hypothesis 3: More than half of the students will feel that they do not even know what a privacy seal is or what a seal is supposed to accomplish.

2. LITERATURE REVIEW

   The three major privacy seals are TRUSTe, CPA WebTrust, and BBBOnline. The TRUSTe program was released in June 1997 by a consortium of CommerceNet, the Electronic Frontier Foundation, and the Boston Consulting Group. CPA WebTrust (www.cpawebtrust.org) was released in September 1997 by the American Institute of Certified Public Accountants (AICPA), with Version 3.0 released in November 2000. BBBOnline (www.bbbonline.org) was released in March 1999 by the Better Business Bureau (Moores, Do consumers understand the role of privacy shields in ecommerce, 2005).

   While e-commerce sales are expected to grow rapidly, Research speculates that privacy concerns will cause billions in lost sales for Internet-related businesses (Dohtery, 2001). It can be a very easy process to obtain a privacy seal and protect your consumer's information. The process of acquiring a seal typically involves writing a privacy policy and a...