Introduction to Business Laws For Ecommerce
With any business, eCommerce sites must always abide by the laws that are in place. That means transactions should be legally straightforward, and that you keep your customers happy with satisfactory policies on purchases, returns, and refunds.
If you’re not following the rules, then you run the risk of having your site get taken down and face a lawsuit and fines. Plus, you’ll face public backlash from faulty business practices (intentional or not). Therefore, keep in mind these 10 important online business laws for Ecommerce before you open your store:
Adhere To Website Policies, Terms, And Conditions
“Terms and conditions are vital for every website, including eCommerce ones,” says Sonia Canton, a business writer at Paper Fellows and Lia Help.
“Terms and conditions tell your customers that they’re entering into a contract by purchasing from your store. And, they inform customers of your exclusions of liability, payments, refunds, and shipping, amongst other things.
Therefore, it’s imperative that you set your terms and conditions, as well as to educate yourself about which law and jurisdiction your store will operate in before launch.”
Be Careful With Trademarks And Permits
Read up on trademark, patent, and copyright terms:
- A trademark identifies products from each other.
- Patents protect inventions for a short period of time.
- Copyrights protect works of art (i.e. music, films, writings, etc.)
Depending on your product, you may want to apply for one or more of these. However, never sell something with protected content (e.g. any Marvel superheroes, video game characters, etc.).
Have A Shipping And Delivery Policy
Shipping and handling are important when customers buy something on your website. Therefore, you must clearly define your S&H policy – explaining the expected length of time for delivery, and the way in which products will be shipped. Plus, if you want to use promotions (i.e. “Spend $100 for free shipping!”), they should be included in your policy.
Have A Refund Policy
Sometimes, customers may buy a product, but then be unsatisfied with it and ask for a refund. In that case – regardless if the customer is upset with their purchase or not (Keep an open mind, by the way) – you must have a refund policy in place. In your policy, keep in mind:
- You can charge the customer the cost of shipping to return, AND
- You can require that the product is still in a merchantable condition to make the return.
The Payment Card Industry Data Security Standard (or PCI DSS) are rules for any business that carries out transactions using credit or debit cards.
The purpose of PCI DSS is to have a secure checkout experience that doesn’t threaten customer information. Consumer data (i.e. conversational recordings) must be destroyed regularly, and not stored.
All businesses must adhere to the PCI DSS rules, or else you’ll face heavy fines and repercussions, especially when there’s a data breach.
Do Regular Inventory
First, you must keep track of how many products you have and the types of products that you have on file. Next, you’ll need storage for your inventory; so, if you need more space to put your products, then you’ll have to invest in proper storage units or a warehouse.
Just keep in mind, some areas have prohibitions on stocking up on large amounts of certain goods. So, you must check on your zoning codes, along with your lease or deed, to find out if there’s anything specific for your business, and prevent fines.
Mind Your Taxes
When considering the taxes that customers must pay, keep in mind the following:
- Your target demographic
- Your target audience’s home country (Some countries charge tax as extra, while others include tax with the sale price. Or, some countries won’t charge tax at all.)
Meanwhile, your business must pay taxes too. If you’re not sure how much in taxes you have to pay for your business, look up the online tax laws of your local community and decide where the base of your business should be.
Protect Your Interests
When selling online, make sure that your interests are protected by terms and conditions. When drafting your terms and conditions, think about acceptable budgeting practices, clear terms of business, and have a secure agreement from your customers at the point the contract of sale is created.
Protect Your Data
“Data protection is vital for when you plan to collect personal information about your website visitors,” says Amber Macdonald, a marketing blogger at State Of Writing and Boom Essays.
“Your store must be registered under the Data Protection Act, and you must comply with data compliance rules at all times.
That means you’re not allowed to migrate information collected from website visitors outside of the EU, and that you can only hold information relevant to the needs of your business.
Say a customer asks for their information to be removed from your records, or to be revealed to them; then, by law, you’re required to do so.”
Failure to adhere to Data Protection laws can result in heavy fines, along with costly legal intervention. In fact, the US has the Federal Trade Commission (FTC) regulating Ecommerce activities (commercial email, online advertising, and consumer privacy). With that said, here are the regulations that you need to learn about before starting your online retail business:
- Protecting consumer privacy
- Handling customer data
- Collecting taxes, AND
- Complying with online advertising regulations
Protect Customer’s Online Privacy
Since online privacy is a big issue for many eCommerce sites, it’s important to keep in mind the types of collected and retained personal information that you might get from customers:
- A customer’s name
- Credit/debit card information (possibly)
As an eCommerce site, it’s important to ensure this personally identifiable information is protected, and that you comply with federal and state privacy laws. Not complying with these rules will result in data breaches and, as a result, lawsuits.
As you can tell by these 10 important laws for online businesses, it’s important to adhere to them, as you run a website that sells products and services.
Always do research before settling on specific terms for your business. If you aren’t sure about something, seek professional help.
Once you have the right terms and conditions in place, along with good behavior with the laws, your business will thrive effectively and legally.
Katherine Rundell is a writer and editor at Law Essay Help and Academic Writing Services. As an experienced essay writer, she takes much pride in providing the best content possible in her written works online.