Why we collect information and for how long: Overview, definition, and example
What is "Why We Collect Information and for How Long"?
"Why we collect information and for how long" refers to the purpose of gathering data from customers, clients, or employees, and the duration for which that data will be retained. Businesses and organizations collect information for a variety of reasons, such as improving services, ensuring legal compliance, processing transactions, or marketing. The length of time the information is kept typically depends on legal, regulatory, or business requirements, and is outlined in the company's privacy policy or data management practices. After this period, the information is often securely disposed of or anonymized.
In simpler terms, this is about explaining why a business collects personal or transactional data and how long it will keep that data.
Why is it important to explain why we collect information and for how long?
Explaining why we collect information and for how long is important because it builds trust and transparency with customers or stakeholders. People are more likely to engage with businesses that are clear about their data practices. Additionally, it ensures that businesses comply with privacy laws and regulations, such as GDPR (General Data Protection Regulation), which require businesses to justify the collection and retention of personal data. By being clear about data collection and retention practices, businesses can avoid legal issues and maintain a good reputation.
For SMB owners, understanding and communicating why and how long you keep customer information is key to complying with data protection laws and fostering trust with your customers.
Understanding why we collect information and for how long through an example
Imagine your business runs an online store. When customers make a purchase, you collect personal information such as their name, address, and payment details. You explain in your privacy policy that the information is collected to process the order, provide customer support, and send promotional offers (with the customer's consent). You also state that this information will be retained for a period of 2 years after the purchase, after which it will be deleted or anonymized unless required for tax or legal purposes.
In this case, your business clearly communicates the reason for collecting customer data (order processing, support, marketing) and specifies the retention period (2 years), helping customers understand how their information will be handled.
Example of a "Why We Collect Information and for How Long" clause
Here’s an example of what a clause explaining why and for how long information is collected might look like in a privacy policy:
“We collect personal information, including name, email address, and payment details, to process your orders, provide customer service, and send you relevant promotional content. We will retain your personal information for a period of 2 years after your last purchase, unless a longer retention period is required for legal or regulatory reasons. After this time, we will securely delete or anonymize your data.”
Conclusion
Explaining why and for how long you collect information is crucial for maintaining transparency, building trust with your customers, and complying with data protection regulations. For SMB owners, being clear about your data collection practices helps ensure your business operates responsibly, avoids legal risks, and strengthens your relationship with customers by respecting their privacy. By clearly communicating these details in your privacy policy, you can manage customer data responsibly and legally.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.