Online shoppers will pay for security
Share with others:
Given the choice, consumers may be willing to pay a little extra to do business with online retailers that are more likely to protect their private information -- whether its guarding credit card data or not divulging the purchase of a sex toy -- according to new research from Carnegie Mellon University.
The conclusion sounds obvious but it's not as straightforward as it sounds, said Lorrie Cranor, director of the Usable Privacy and Security Lab at the Oakland university.
Many people say privacy is important yet few bother to read the dense policies posted on Web sites. Some studies have even shown consumers willing to give up private information in return for small prizes.
So with online sales growing 25 percent last year to almost $220 billion, according to the National Retail Federation, the CMU researchers decided to try to figure out if anybody really cares. The group had been tackling the issue of how to make privacy information more accessible -- but it wouldn't mean much if nobody would use it. Their thinking was that people do worry, but it's just too difficult to get information.
They developed a tool to rate Web sites for privacy protection and policies. The Privacy Finder, www.privacyfinder.org, is meant to develop a "nutritional label for privacy," said Dr. Cranor. It can evaluate sites that meet an established standard for creating machine-readable privacy policies. Issues reviewed include whether sites share personal information or put shoppers on marketing lists.
The researchers recruited test subjects in Pittsburgh to see how such a privacy rating tool would affect shopping decisions. In the lab, participants were given a budget of $45 and told to buy batteries and a vibrating sex toy online, both of which cost about $15.
Test subjects had an incentive to find low prices since they were allowed to keep any unspent funds. The products were chosen to raise privacy issues of all sorts. "We wanted something that would make people uncomfortable," said Dr. Cranor, although they ruled out things such as books on bomb making that research showed a wide segment of the online shopping sector would flatly reject.
Still, a few subjects declined to buy the vibrators. Others took the option of having their purchases sent to CMU, which helps explain the collection in Dr. Cranor's office. Under the research shopping rush, some online stores ran out. "They were probably, like, 'What is going on in Pittsburgh?' " said Dr. Cranor, with a laugh.
Participants were required to use their own credit cards, a step meant to keep them tuned into the real risks.
In the end, people who chose to pay more than they had to for products said privacy issues played a role in the decision. Typically, they were willing to pay about 60 cents extra on a $15 purchase.
The researchers plan to present the results today at the Workshop on the Economics of Information Security, a gathering being hosted by CMU. In addition to Dr. Cranor, the team included Alessandro Acquisti, assistant professor of information technology and public policy, as well as two graduate students, Janice Tsai and Serge Egelman.
Next, they expect to study the issue further, trying to make sure vendors don't run out of supplies and to account for varying price differences.
Meanwhile, Dr. Cranor said the group would love to hear from a search engine interested in adding a privacy assessment tool to its features or to see online retailers start to use strong privacy protections as a way to differentiate themselves from competitors.
First Published June 7, 2007 8:40 pm