Another must when building your Web site is writing a privacy policy and exhibiting it boldly on your site—it's a necessity today for building consumer confidence.

A good policy includes a description of how data is collected and used; a way to allow users to choose not to provide data or permit their data to be shared; and a description of the procedure for users who want to request or update data. You can also follow fair-information practices laid out by the FTC. And remember: Once a privacy policy is posted on your Web site, you'd better adhere to it, or expect to find yourself in legal trouble.

You can build consumer confidence by joining an online seal program. Think of it as a Better Business Bureau for the Web. It works like this: If a business follows certain privacy rules, it's allowed to display a seal of approval on its Web site. Customers logging on to your site will feel more confident buying your wares; the seal offers proof that your business takes privacy seriously and uses the information collected in a responsible way.

Two leading privacy-seal programs are TRUSTe (Trusted Universal Standards in Electronic Transactions), based in Cupertino, California, and BBBOnLine, a subsidiary of the Council of Better Business Bureaus (BBB) in Arlington, Virginia. To include either of these programs' privacy seals on its Web site, a company must agree to post a privacy statement that's easily accessed and understood; further, the business must implement privacy principles that reflect fair-information practices.

The TRUSTe seal is awarded only to those sites that adhere to TRUSTe's privacy principles and comply with TRUSTe's verification and consumer-resolution processes. The rules state that participating companies must inform customers of what kind of personal information is collected, how it's used and with whom the information will be shared, as well as the site's policy on correcting and updating the visitors' information. Additionally, companies must give users the opportunity to opt out of having their personal information given away (or sold). TRUSTe's program costs $299 for a company with yearly sales less than $1 million and the price increases as a company's sales increase.

Similarly, the BBBOnLine privacy program is also designed to assure consumers that their information will be safe in your particular corner of cyberspace, and its requirements are similar to TRUSTe's. BBBOnLine's privacy seal is backed by the Better Business Bureau; to participate, a company must not have an unsatisfactory record with the BBB. All applicants pay a one-time fee of $75, as well as an annual assessment evaluation fee based on the company's sales. Don't expect anything too exorbitant: For companies with total sales of $1 million or less, membership in the program costs $150.

The Direct Marketing Association (DMA), a trade group in New York City, has an online guide to help entrepreneurs develop a privacy-policy statement. The guide encourages companies to complete a questionnaire and create a privacy-policy statement consistent with the association's Privacy Principles for Online Marketing, which are similar to the seal programs' principles mentioned above. TRUSTe also offers a free Privacy Statement Wizard.