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Show of Good Faith

It's more important than ever to show customers you'll keep their information private.

This story appears in the December 2003 issue of Entrepreneur. Subscribe »

It's getting hard for consumers to hide, as "spyware" programs invade personal computers and large retailers such as Wal-Mart move toward Radio Frequency Identification (RFID) technology, a wireless "bar code" that lets retailers track inventory even after it's left the store. Even paying in cash may not guarantee customers anonymity much longer: The European Union is adding RFID to the Euro. If successful, RFID could be added to U.S. currency within a few years, making it possible to track money from the ATM to the cash register.

Not surprisingly, consumers are wary. In a February 2003 Harris Interactive survey of 1,010 adults, 54 percent felt that most businesses don't handle customer information "in a proper and confidential way," and some 53 percent said that existing laws and business practices don't provide enough privacy protection.

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