Thursday, October 27, 2016

Without These 3 Vital Policies, Your E-Commerce Business Could Be in Danger

If you have an e-commerce site or are thinking about starting one, there are a thousand and one things to stay on top of.

As a smart business owner, you’ve already set your e-commerce business up with a formal business entity like an LLC, which will help keep your personal assets separate from the business’s liabilities, open a bank account, and look more qualified to potential customers.

After setting up their business as a formal entity, in the hustle and bustle of getting their e-commerce store up and running, many people often forget to take another important step to protecting their business and themselves.

We’re talking about website policies.

All too often e-commerce businesses lack good, well-thought out sets of website polices. To start, every website needs a Terms of Service, which includes a Privacy Policy. Plus, if there are items for purchase through the website, the business should also have a Returns Policy.

Generally, good website polices explain what the business’s users can expect from the website, whether any personal information is collected, how the business uses any information collected, what the website’s users can and cannot do, and how to handle issues or returns if items are bought, among other things. But if you’re missing these policies, potential customers might not find you trustworthy enough and find what they’re looking for somewhere else.

Basically, they’re the contract with your website’s users, establishing trust and accountability.

Here are the 3 website policies you’ll need for your e-commerce store:

1. Terms of Service

Terms of Service establish the boundaries of your relationship with your users. They provide a guideline of what users can and cannot do, as well as what users can expect from the business. They’re also commonly referred to as terms of use or terms and conditions.

Depending on the type of website, the terms of service can range from a simple disclaimer to full user agreements. Generally, the more complex and more information the website has, the lengthier the website’s terms of service will need to be, as there are more aspects to take into account.

Terms of service typically cover topics including:

  • User acceptance
  • User rights and responsibilities
  • Ownership of user content
  • Acceptable and unacceptable use of the website
  • Opt-out information
  • Account termination procedures
  • Disclaimers
  • Limitation of liability

While the above topics are often covered in a website’s terms of service, they’re not the only topics. Since each online business is unique, a great terms of use policy will typically be tailored to the specific needs, concerns, and liabilities of that business.

As you can probably guess, this means that you can’t simply copy an existing website’s terms of service.

2. Privacy Policy

Most websites collect some form of information from users. Privacy policies explain what information a website collects and how it uses, stores, and protects that user information. Technically, the privacy policy is a subsection of the overall terms of service, but because it covers an important topic and can be lengthy, it’s frequently set out as a separate agreement and incorporated into the full terms of service by reference.

Website privacy policies usually cover topics like:

  • What information is collected
  • How collected information is used
  • How information is protected and stored
  • If cookies or other tracking software is used
  • Disclaimers

As with the terms of service, having a clear, well-thought-out privacy policy is an important feature of well-run websites.

3. Returns Policy

A returns policy can be a key aspect in gaining your customers’ trust.

Remember, unlike with a brick-and-mortar business where customers can evaluate the individual behind the counter, e-commerce customers rarely meet the people behind the business and must look for other markers of trust. Not to mention, since the customer cannot feel or try the product before purchasing, they want to know what to expect if they want or need to return the product.

Thus, a clear, simple returns policy can be an instrumental tool in convincing customers to trust your website and closing the sale.

Good returns policies should include how long returns or exchanges are accepted, any limitations on returns or exchanges, the process for returning or exchanging goods, and how to contact the business about returns or exchanges.


As you can see, there’s a lot that goes into a great set of website policies, but by taking the time and effort to develop them, you can help your online business look professional, stand out from the crowd, and be protected in the event something goes wrong.

While it may be tempting to copy another website’s set of website policies, the best practice is to consult with an experienced attorney. They’ll help you develop a set of website policies that accurately reflect your unique business and the specific aspects, concerns, and needs that your business might face. This also helps to make sure that you, the business owner, know exactly what to expect and how the set of policies work for your business.

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