Trust Issues Loom Over E-Commerce

Thanks to constant phishing expeditions in which evil-doers spoof the e-commerce sites of major retailers, consumers have become much more aware about the dangers of offering up personal information online. That’s a good thing for consumers, but it may be bad for online merchants, especially those who haven’t become household words.

According to a survey released today by nonprofit Web security certification organization TRUSTe, fears related to consumer privacy will have a significant negative impact on online shopping during the 2003 holiday season. A full 49 percent of survey respondents said that fears related to the misuse of personal information will limit their holiday online shopping to some extent, including 5.6 percent who indicated that they will not shop online at all this year due to their concerns.

“Consumers are both smart and needing some help,” said TRUSTe executive director Fran Maier. “They’re smart that they know they ought to be looking for a seal or a privacy statement [on e-commerce sites] and that they should be careful about the information they offer. At the same time, they do give away their information for too little in return.”

Smaller e-commerce players that don’t post a privacy policy will lose sales, according to TRUSTe. Of the fearful 49 percent of survey respondents, the three leading reasons for reducing or halting online shopping were concerns about receiving unwanted spam after purchasing a product, a fear of identity theft and the potential for credit card information to be stolen when making a purchase from a Web site.

Around one third of the survey respondents were less willing to purchase items from a smaller online retailer than from a large, well-known brand. One primary reason for their reluctance was the worry that smaller operations might be more inclined to misuse personal information. The survey, conducted by market research firm NFO WorldGroup and sponsored by the nonprofit TRUSTe, polled 1,212 consumers.

Said Maier, “I think they feel — rightly — that brands they know may be more likely to be responsible than brands they don’t, but sometimes that’s not true. [Consumers] should still take a good second look.”

Of course, TRUSTe is making its own holiday sales effort, hoping that online retailers will sign up for its privacy certification and seal program, which has nearly 1,300 Web sites participating. In the survey, 49.4 percent of the consumers polled stated that they would not purchase from an online site or provide personal information unless a Web site posts a privacy statement or privacy seal.