With everything moving online these days, it's easy to look at the benefits. Online stores can sell products from any location and send to any location. They can be globally accessed from anywhere on the web. They can drive traffic through intelligent strategies and cut down on print advertising. However, there are also some legal issues to consider with e-commerce.
There are various ways to deliver products based on Web purchases. Since there are all sorts of businesses online today, every legal situation is particular to the transaction or store. These are a few examples where legal knowledge comes in handy for e-commerce.
Online Delivery of Goods and Services
If you have electronic media that you want to share or sell, then you most likely use some kind of medium over the Internet. You may download a software package purchased on Amazon, or you may purchase music from iTunes and place on your iPad. In some cases, you may purchase a monthly service that you pay for. What happens if the service doesn't work correctly or becomes unavailable? What happens if you need instructions in different languages for global customers? There are some major issues to consider with any electronic transaction. These include:
- *Proper online contracts and terms
- *Record retention obligations
- *Original documentation for TAX purposes
- * Import and export regulations for international sales
- *Exchange control regulations
- *Foreign data protection laws
- * Site security and fraud protection
If you are using electronic means of delivery, these should also be made secure to avoid other legal issues. You should address faulty delivery or unavailability in your terms as well.
Payment Handling, Sales and Delivery Procedures
There is a simple process to understand when purchasing and receiving products from online stores. The process starts with a product choice, which then goes to order placement. Finally, there is payment processing. All of these points of purchase must be secure and streamlined for your customer. After payment is processed, shipping begins. There are all kinds of issues related to shipping, but most of all, online retailers may forget to establish where they ship to and where they don't. If you have certain geographic availability for your products, you have to place these terms in your conditions of sale and clearly state where you ship to on your site.
If you want to avoid legal battles, you should specify certain geographical areas where purchases are accepted. This means that customers outside of these areas are ineligible to purchase or receive products. It's also important to recognize government bodies and avoid any legal battles that may prohibit you from selling to certain areas. You should never process any transactions from areas that are ineligible to receive products.
To set up terms for your online sale, you should look to the terms of a traditional sale. Your online terms should also be consistent with any packaging of your products such as warranty or limitations. Return and refund policies must also be addressed. You should have an active acceptance of terms of sale before completing purchase. Typically, online retailers place this just above the complete purchase button, and customers are not allowed to purchase until they place a check in the box stating that they have read the terms of sale.
You should also have policies in effect for non-payment and fraud. You may want to provide alternative methods to ordering such as telephone ordering. You can hire an information technology professional to look at your transaction methods and software to ensure that it's safe for your business and customers.
With many businesses under fire for personal data collection, you need to clearly state in your terms and conditions if you are collecting any data or how data is protected on your site. Your site should be secure to build trust for your customers.
It's important that you have terms to enforce if a problem should ever arise. Most of these will be covered in your terms and conditions. By making sure that your site is secure and that you have your customers actively accepting or declining terms of sale, you can place yourself in a more secure position to do business online.
Online Delivery Issues
Most transactions online today happen in seconds. From selection to delivery, people can download music, movies, games and apps with a tap of a button. Digital content is constantly being altered, distributed and duplicated in large quantities all across the Internet. Content is often vulnerable to piracy and unauthorized use because of certain Internet users.
You should have clearly defined copyrights, trademarks and patents to protect your digital content. You should clearly state how your digital content can be used or not used as well as the punishment for doing so. You should also read over content laws and licensing to ensure that you are protected in countries that you sell content to as there may be conflicts.
There hasn't been much success in fighting piracy. There are ways to watermark and change online content in order for it to be connected to one account, but they require intuitive design and implementation. You should always consider the potential risk and reward with any digital content that you release online. In some cases, you may choose to delivery the content offline instead.
You can always consult with a lawyer about your copyrights and licensing issues. You should ensure that your digital content is protected and legal rights can be pursued if there is ever a conflict of copyright.
B2B or B2C
B2B is business to business sales while B2C is business to customer sales. A B2B site has different concerns than a B2C. For example, a B2B is more focused on supply chain management. Dealers and distributors may deal directly over the Web through electronic transfer of orders, payments and invoices. B2C sites are those like Amazon or eBay, which focus on providing a customer with a product. Each type of site has different legal concerns.
In addition, different industries have separate concerns. If you are selling auto parts for instance, you probably want to include conditions for core charges that must be returned in order to receive a rebate. You should always consider the type of business that you are and who you are selling to when creating your terms. By consulting with an IT professional or looking at similar online retailers, you can find out more about how you should develop your terms and conditions.
Today's most pressing legal battles with e-commerce involve security, international sales and shipping. Inevitably a customer has to trust what you are selling to them, and they have to believe that you are selling a good product or service without trying to steal their information. Customers will avoid dealing with businesses online that have a bad reputation for faulty products, abused refund policies and bad shipping procedures.
There are also rising security costs. By writing a detailed terms and conditions and terms of sale, you can avoid most legal problems, but you should also make sure that you are following local, state and federal laws. By setting up your site with clearly stated copyright and licensing information, you can also prevent some instances of theft though most digital content today is duplicated in some fashion or another.
Created And Published By Christopher Pontine And Cynthia Adams
Image Credit: Iacobus Images