This probably comes as a surprise to many, but a large portion of internet users actually read online privacy policies. I'll say that again: some people actually read online privacy policies. Or, more accurately, try to read online privacy policies.
Hold onto your chairs, now: people actually make buying decisions based on what they read in the policy.
The world is changing. A growing group of customers ... perhaps your customers ... care about privacy and want the companies they deal with to come clean with comprehensible privacy policies.
I still see too many companies that have privacy policies that are screensful of small print with the "good stuff" that people are interested in buried at the bottom. E-commerce sites probably pay significant sums of money to make their services accessible to Mac and FireFox users because they don't want to alienate potential customers. You should do the same with your privacy statements. Do your company a favour: ask both your grandmother and your seven year old nephew to read your site's privacy statement. If either or both do not fully understand what the statement really means, re-write it and try again. Repeat as necessary.
Harris Interactive did a survey for Privacy & American Business, which backs this up: Vague online privacy policies are harming e-commerce, new survey reports.