Skip to content

Data Privacy Compliance in Ecommerce: Tips & Best Practices

Osman Husain 5/13/24 3:39 PM

Table of Contents

For ecommerce retailers, data privacy is the backbone of operations. Millions of transactions get processed each day through online channels, with credit card details, customer addresses, and other personal identifiable information (PII) flowing through vendor systems. Understandably, customers won’t get on board unless they have some assurance that their personal data will be protected.

Major e-commerce platforms (like Shopify or Wix) are built with robust data protection measures to help retailers. These generally include tools for payment information security, third-party vendor risk assessments, cookie policy management, and fraud detection. While these tools are a great start, companies shouldn’t adopt a “set and forget” approach. 


Regulations for Data Privacy Compliance in Ecommerce

Compared to the digital landscape of 20 years ago, modern consumers enjoy a wide range of data privacy protections. Mandates like the General Data Protection Regulation (GDPR) give users more agency over how their data is used, but for ecommerce vendors, these mandates pose new compliance challenges to overcome. It’s essential that vendors understand which data privacy mandates apply to each region (and the associated rights of each region’s customers). Some of the most important data privacy regulations include:


General Data Protection Regulation (GPDR)

GDPR is a comprehensive data privacy law set by the European Union. It emphasizes transparency, accountability, and individuals' rights over their personal data. This broad mandate applies to all residents in the EU as well as the European Economic Area. Any ecommerce vendor that serves customers in these regions must adhere to certain standards for data access, deletion, storage, and right-to-object. Those who fail to do so may be liable for fines up to 4% of annual global turnover or €20 million, whichever is greater.


CCPA (California Consumer Privacy Act)

The California Consumer Privacy Act (CCPA) is one of the most recent and forward-thinking data privacy mandates in the United States. It grants California residents more rights over how their personal data is managed. Like GDPR, CCPA mandates transparency of data collection practices and allows consumers to opt out of the sale of their personal information. For example, businesses subject to the CCPA must provide a "Do Not Sell My Personal Information" link on their websites. CCPA applies to any for-profit entity that collects California consumers' data and meets specific revenue or data transaction thresholds.


Quebec’s Law 25

Quebec's Law 25 is recent legislation that modernizes the Canadian province’s data handling practices and brings them in closer alignment with GDPR. Like similar mandates, Law 25 places new requirements on vendors for data handling, transparency, and consent collection. Note that it includes a requirement for businesses to appoint a dedicated compliance privacy officer plus an ongoing requirement to conduct data privacy impact assessments on qualifying projects. Any private sector business that serves customers in Quebec must comply with these regulations.


The Importance of Consent Management in Data Privacy

Consent management is a cornerstone of digital data privacy for both ecommerce retailers and website owners in general. Consent tracking is part of how companies log and retain records related to their compliance objectives. To remain compliant with GDPR or CCPA, businesses must obtain explicit and informed consent from users before they collect or process personal data.

This consent is usually gathered through a cookie consent banner, either with a third party tool (like Enzuzo) or natively within an ecommerce platform like Shopify. 


Staying Compliant with Google Consent Mode v2

Consent management has always been important for compliance and to build customer trust, but with the growth of global data privacy regulations, it has become a must-have. For example, the introduction of Google Consent Mode v2 in 2024 further increased the global need for robust consent management solutions.

Google Consent Mode streamlines how consent is recorded and passed to Google. As of March 2024, businesses that serve ads or track analytics on users in EEA and UK markets must comply with Consent Mode v2 requirements.

This development reflects a broader industry trend toward more granular and user-centric consent mechanisms. Ecommerce companies that want to reach the largest audience of users—and make use of the data available on those users—must deploy a Google-certified Consent Management Platform (CMP) to keep things compliant.


Building Robust Policies and Templates

Data privacy compliance in ecommerce is a two-way street in the sense that outlining clear policies benefits both the business and the end user. While clear privacy policies inform readers of their rights, they also provide written procedures that protect ecommerce companies from the unknown. Some of the most important policies every ecommerce business should include are:


Privacy Policies

Privacy policies should detail how customer information is collected, stored, and shared. Naturally, these policies should be written in a way that maintains compliance with regulations like GDPR or CCPA. This is a simple way to make sure that every customer’s rights are respected. Of course, these policies will need to be updated over time to reflect changes in company procedures or global privacy mandates, so it helps to work with data privacy tools that offer customizable templates. 


Terms and Conditions

Think of Terms & Conditions (T&C) as the legal backbone of an ecommerce store. This document functions as a contractual agreement between the customer and provider; it outlines expectations and service obligations. Ecommerce stores should include details on payments, product descriptions, liability limitations, copyright information, warranties, and dispute resolution options. This single document can significantly mitigate the risk of legal challenges as well as other issues (such as chargebacks and fraud) from affecting operations.


Shipping and Return Policies

While not a direct requirement for GDPR compliance, clear policies for shipping and returns can help manage customer expectations from the outset. Include information on delivery timeframes, available shipping options, timeframes for returns, and any other specifications related to refunds. 

Outlining policies early may reduce the odds that any dissatisfied customers will complain, perform chargebacks, or leave negative reviews. Find the right compliance solution and it’ll be easy to generate these policies directly through your existing toolkit.


The Importance of First-Party Data for Marketers

First-party marketing data generally includes collected information on a customer’s preferences, behaviors, and brand engagements. While certain types of first-party marketing data may fall under the PII designation (such as home addresses or phone numbers), not all of it will. The “First-party” label refers to the fact that the entity collecting the data is the one using it.

In the context of data privacy compliance in ecommerce, first-party data allows marketers to understand their audience and personalize communications to drive higher engagement. Backed by a robust customer data set, businesses can identify trends, better forecast demand, and create more powerful marketing strategies across the board. 

For the competitive ecommerce retail market, where margins are low and value is derived through economies of scale, these types of insights are often necessary to maintain a competitive edge. Robust profiles backed by first-party data is the quickest way to learn about prospects and customize offers to their needs.


How Consent Mode v2 Supports First-Party Data Collection

The introduction of Google Consent Mode v2 represents a big development in data privacy compliance in ecommerce. Consent Mode allows businesses to adjust their website's data collection mechanisms based on the user consent status, and this makes it easier to adhere to various privacy regulations. In ecommerce, Consent Mode v2 helps marketers collect first-party data in a way that respects user privacy preferences; it reinforces both customer trust and compliance with data protection laws.

Any ecommerce company that wants to deploy Google Ads and analytics within the UK or EEA—and thus, take advantage of the rich insights that first-party data has to offer—must do so through a Google-certified CMP. These platforms integrate with Consent Mode v2 to facilitate compliance with this framework and with broader privacy mandates like GDPR and CCPA.

When businesses automate the consent collection process and ensure that data tracking aligns with user preferences, CMPs reduce the burden of compliance. This automated system allows ecommerce vendors to focus less on compliance tasks and more on the tasks that matter, such as leveraging first-party data to bolster the company’s growth.


Streamline Data Privacy Compliance in Ecommerce with the Right CMP

With Google Consent Mode v2 in full effect, ecommerce standards for consent management are stricter than ever. In the future, companies will need to adopt policies that allow them to serve the widest user base possible. The implementation of a Google-certified CMP in particular should be a top priority. 

Backed by a quality CMP that makes compliance easy, ecommerce companies are better positioned to focus on their core objectives. Solutions like Enzuzo provide full support for ecommerce data privacy; they offer a Google-certified CMP alongside automated policy generators for legal templates, T&C, shipping, and more. Better yet, a free option is available for businesses that want to deploy quickly and stay one step ahead of compliance goals.

Osman Husain

Osman is the content lead at Enzuzo. He has a background in data privacy management via a two-year role at ExpressVPN and extensive freelance work with cybersecurity and blockchain companies. Osman also holds an MBA from the Toronto Metropolitan University.