Building customer trust remains one of the main challenges facing electronic commerce today, largely because previous research efforts have not explained trust formation as a process which can be influenced through a number of discrete interaction stages with the vendor. In this paper, we present an empirically tested model that describes these stages and shows that customers come to trust incrementally as they assess the online vendor’s benevolence, competence, integrity and predictability. Based on these findings, we explore how online stores can be effectively designed to build customer trust at each interaction stage. We analyze each interaction stage into the underlying functions and we explain how each of these functions can separately build trust in an online vendor. The study derives a set of principles that can inform and guide the design of trust-centric online stores.