But losses mount for the home furnishings e-retailer that went public in October.
The Better Business Bureau believes Web retailers are setting themselves up for a backlash of consumer complaints and probable federal legislation if they don’t start taking shoppers’ privacy rights more seriously. And that’s precisely why the bureau is launching a voluntary certification and assessment program that will evaluate Internet merchants’ privacy policies.
The program, conducted by BBB Online, the bureau’s Internet division, launched in February and assesses merchants and other electronic commerce companies on a wide range of privacy topics. “The pressure is heating up in Congress to do something about protecting consumers’ privacy rights on the Internet. We’re tracking 32 legislative initiatives,” says Russell T. Bodoff, senior vice president, chief operating officer, BBB Online, Arlington, Va. “The industry needs to become more pro-active and this certification program is a start.”
Under the program, which costs about $150 for a small merchant and up to $3,000 for a large national chain, BBB Online will review the online retailer’s consumer privacy plan and give it a final assessment. If the retailer meets all the bureau’s criteria, the BBB Online issues it a certification logo the retailer can display on its Internet site.
To begin the process, merchants first download a lengthy questionnaire from the BBB Online Web site, fill it out and e-mail it back to the bureau. The BBB Online reviews the information, checks to make sure the data meets the bureau’s consumer privacy criteria and completes the assessment. The bureau has the right to audit any particular site if consumers complain about privacy violations. The bureau will also monitor all program participants.
The BBB Online is expecting 1,500 companies to join its privacy certification program. But even if retailers are doing more on their own to protect Web shoppers’ privacy, that might not be enough to ward off legislation.
“These industry programs just don’t work because they lack enforcement,” says Marc Rottenberg, executive director, Electronic Privacy Information Center, Washington, D.C. “We will see consumer privacy legislation soon. People are looking beyond just self-policing.”
But even if Congress does pass legislation, the BBB Online defends its privacy certification program as a good way to make shoppers aware that more Web merchants are taking their privacy concerns seriously.
“These standards are pretty rigorous,” Bodoff says. “If consumers see the Better Business Bureau certification logo on a particular electronic commerce site, they should feel comfortable that their privacy is being respected.”