Get your ecommerce business ready for online sales
Ecommerce has seen remarkable growth over recent years, especially during lockdown, and is changing the landscape of how people buy and sell goods and services. The growth in ecommerce is shifting activity away from the high street to digital means, which in turn is changing the way businesses operate. In addition, the popularity of marketplace platforms, such as Amazon and Facebook, has made this growth even more noticeable.
As businesses transition into ecommerce, they are presented with a number of opportunities. These include having a wider reach, significantly reducing overheads and carbon footprints, and being able to expand on a global scale. It is important that you welcome and utilise the transformative opportunities ecommerce offers, whilst also being aware of your legal obligations.
At the start of a new year, there is no better time to ensure all is in order with your ecommerce business and start planning for key sales dates such as Black Friday, cyber Monday and even next Christmas! (It is reported that the months of November and December drive in the region of 30% more revenue for online retailers and that the days from Black Friday through to Christmas generate over 50% more revenue than other months).
We outline a list of tips and key legal considerations for those who already operate an ecommerce site and those who wish to set one up.
- Understand your legal obligations: the first step is to be aware of your legal obligations from the outset, so that you can ensure you comply with these. For example, if you sell direct to consumers then you must comply with consumer law, including the requirements of the Consumer Rights Act 2015 in respect of the products being of satisfactory quality, amongst others. As you are selling products online, regulations relating to distance selling will apply. Also, if you are processing personal data, you need to ensure that you are complying with the UK GDPR and Data Protection Act 2018. These are just some of the legal obligations to be aware of when operating an ecommerce site and which we will explore in this article.
- Check (or prepare) your terms and conditions (T&Cs): T&Cs are vital. They outline the commercial terms you offer your products and services on and form the basis of the legally binding contract between you and your clients, clarifying the rights and responsibilities of each party. They should include provisions on payment terms, liability, delivery terms, returns policies, cancellation, and dispute resolution. They must be compliant with consumer law (if you sell to direct consumers). They should contain enough detail, reflect the procedures your business implements in practice, and address all relevant areas from defective products to any goodwill guarantee you offer. It is important to keep your T&Cs up to date and under regular review and ensure that you and your staff are familiar with them. Additionally, you should ideally have a set of separate website T&Cs, which clarify the permitted use of your site along with any restrictions on the use of the site and any intellectual property (IP).
- Be aware of data protection and privacy legal requirements: when running an ecommerce site and providing goods and services, you will be processing personal data (including names, addresses, and payment information). As a result, you will need to comply with the UK GDPR and Data Protection Act. Failure to comply with your data protection responsibilities can not only be costly, (the ICO has powers to issue penalties of up to 4% of your annual turnover where there has been a failure to comply with data protection principles), but businesses can also suffer reputational damage and bad PR. A fundamental element of compliance is having an appropriate and easily accessible policy to follow, which explains the types of personal data you collect and the purpose for this, provisions for data retention, and the user’s legal rights (for example, the right to erasure). You should also use trusted and legally compliant platforms to process payments.
- Protect any IP: with a consumer facing business, ensuring you protect your copyright material and trademarks is a primary consideration which ecommerce businesses should be aware of. Your name, logo and content are your assets and need to be protected. As mentioned above, your agreements and T&Cs should clearly set out the basis on which others can use your IP.
How can Bermans help?
Rob Eakins, Solicitor
t: 07585 357238
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