Exploring the impact of online privacy disclosures on consumer trust

We explore the impact of privacy disclosures on online shoppers' trust in an e-tailer through a two-phase study. In the first study, we use a between-subjects factorial design to test whether the presence of an online privacy policy influences consumer trust and find that consumers are likely to respond more favorably to a shopping site with a clearly stated privacy message than to one without it, especially when privacy risk is high. In our second experiment, we examine the effects of different forms of privacy disclosures. The results suggest that online shoppers find a short, straightforward privacy statement more comprehensible than a lengthy, legalistic one. However, how a privacy policy is presented (in terms of wording) does not affect a shopper's trust in the store to any significant degree. (c) 2006 New York University. Published by Elsevier Inc. All rights reserved.