Operating an e-commerce platform provides plenty of opportunities, but the responsibilities which go hand in hand with those opportunities are often overlooked. Not getting this right can seriously damage your growth.
These tips are designed to help you:
- Add a competitive edge to your site;
- Maintain your reputation in the online environment;
- Avoid costly fines;
- Control your cash flow;
- Limit your liability; and
- Have a friction free return and cancellation process.
Control your cash flow – the peril of 54 week returns
If you do not comply with the law by having compliant terms in place, consumers can (in many cases) return goods for up to 54 weeks. This can have a huge impact on cash flow. If you do comply this period is reduced to just 2 weeks.
Be careful also to only offer items you have in stock. Don’t take payment (or form the contract) until you are ready to dispatch items. Doing otherwise can make life difficult if the customer cancels before dispatch or if you find yourself unable to fulfil the order. In some circumstances, this is a criminal offence.
Look after your customer
Remember that when a customer buys from you, they are taking a leap of faith. After all, they may not have had the chance to develop a relationship with your business and will be handing over their cash without seeing the product they are buying. It is down to you to build trust.
As an e-commerce platform there are obligations you must follow to make sure the consumer’s faith is not misplaced. Get this right and you will soon see your reputation grow as the customers will get a better experience.
For example, customers and the law expect your terms of sale to be clear and easy to understand. Don’t be afraid to support your terms of sale with summary sheets to add clarity. Your terms should already be free of legal jargon but consider going one step further and making sure they are in your corporate voice – in keeping with the rest of the customer’s interaction with you.
Remember though that there are certain things you are required to set out and there are many topics you might want to cover to protect your business.
Your terms should be a tool, offering customers security and clarity whilst limiting risks to your business and meeting your compliance obligations. They should be easy to access, not hidden away or buried in the back end of the website.
Be transparent on returns. A separate returns policy/ FAQ is always useful. Make things easy for the customer by having a separate returns policy which contains everything they need to know on the subject.
If you want the customer to pay for the return of non-faulty etc. items – you need to set this out at the beginning.
Remember that for online sales (other than for exempt categories) consumers can return goods even when they are faulty and they have just changed their mind.
The law requires you to provide customers with a cancellation form – so make sure you do.
Communicate with your customer
You must have good processes in place to communicate with your customers – much of this can be automated.
You must provide each customer a copy of your e-commerce terms (and returns policy if separate), your standard cancellation form and keep them up to date with their order when you take payment, ship items etc. Emails, or dedicated account areas, are the most popular way of achieving this.
Don’t underestimate data protection implications
GDPR and Data Protection legislation has a huge impact on e-commerce. Getting it right can open up a world of opportunities through data analysis but getting it wrong can be disastrous. Compliance can be time consuming, and requires you to understand all the data flows in your business, an issue which is exacerbated if, like almost everyone else, you outsource elements to third parties. Doing this well, once, should ease the pain of continuous compliance and can uncover unknown uppers and efficiencies.
For more on data protection click here. In the meantime, be aware that data protection impact on:
- Cookies (including google analytics)
- Hosting of data
- Choice of couriers
- Creating look alike audiences
- Payment mechanisms
- Profiling marketing to your client base
Be careful who you target – Selling overseas
It’s easy to use your e-commerce platform to sell overseas but, before you do, make sure you do so with your eyes open to the risks and opportunities.
For example, if you ship to consumers in other territories you can often find yourself having to comply with the law in those territories. This is why larger brands will often invest in separate sites for each territory they operate in.
You could also find that the products you are offering, whilst okay in the UK, infringe third-party IP rights in other territories to which you sell.
To avoid the risks, do your homework on countries you ship to and consider whether your site could be designed to ‘target’ customers from other countries.
For more information on targeted marketing click here.
Set the ground rules
When running a bricks and mortar retail site you have various legal obligations to your visitors like their physical safety. You also have expectations of how customers will behave whilst on your premises – the same principles apply with an online retail site.
The software code, content and images on your site are likely protected by copyright. The copyright owner has the right to protect copying of relevant material.
If someone else created the content on your site, you will not automatically own the copyright. Ensure you have a written agreement with developers and other content providers which assign ownership or licences of the copyright to you.
Be careful that you don’t inadvertently infringe other people’s copyright. If you are using content from third parties, ensure you have their permission. This even applies to photos of product. To reduce the risks, and differentiate yourself in the marketplace, consider taking your own photographs.
Protect your reputation
Many businesses fail to register their trade mark, mistakenly believing that trading history, company name or domain name registration offer sufficient protection.
If you want a government endorsed legal monopoly which will enable you to stop others from taking advantage of your hard-won reputation by using an identical or similar brand in respect of relevant goods and services, you must have a trade mark registration.
For more information on trade marks click here.
Ensure your marketing is lawful
Your web content and social media posts are all forms of marketing. As such, you need to ensure this content complies with relevant marketing legislation.
All statements must be open and honest. When you make statements which are objective and capable of being proven or otherwise, you must be able to back these statements up. For example, if you market ‘product x’ as your most popular line, or as the most popular in its class in the UK, you must be able to prove this.
Similarly, if you make social media posts, not only must they be true but you must also make it clear that there is a commercial connection between you and the business. A business owner who posts tweets about how great their business is, without disclosing who they are could soon find them in hot water.
The web used to be seen as the new Wild West, a frontier zone where the law could not keep up. This is no longer the case.
By giving consumers great protection on the law requires e-commerce businesses to up their game.
In a world where Consumers are becoming increasingly aware of their rights, where ethical concerns have an increased importance in business decisions and reputations can be lost so quickly, those businesses which use the law as a tool to elevate their strategy will have a distinct competitive advantage and run at lower risk levels. On the other hand, businesses that do not face potentially significant consequences, not just legal but commercial as consumers chose to deal with compliant businesses and “vote with their feet”.
Ben Travers is a partner and head of intellectual property and IT at Stephens Scown LLP. The team is one of the largest specialist teams of its kind in the UK and advises businesses in the South West and beyond on how to protect and exploit their IP, contract issues and data protection. To contact Ben, please call 01392 210700 or email firstname.lastname@example.org.