Most entrepreneurs go into eCommerce to sell products and ideally build an online sales empire — not spend their time dealing with legal documents. However, every business, no matter its size or niche, has to manage the legal side of operations, and your eCommerce website, services, and products are no exception.
eCommerce websites aren’t required to have a Terms and Conditions page, which can lead sellers to assume (incorrectly) that these limitations are unimportant.
This is far from true.
In this article, we’ll explore what terms and conditions are in the business world, why you need them, and how to write clear terms of service that protect both you and your customers.
You’ve chosen your business name and logo, picked the products you’ll sell, and built and/or customized your online store. On the back end, you’ve decided which payment types you’ll accept, how you’ll handle fulfillment and shipping, and your marketing messages.
After so much careful planning, you have to protect your hard work and your business from legal harm. This is why it’s crucial to establish your online store’s terms and conditions.
Terms and conditions (T&Cs) are legal agreements between a goods or services provider and their customers. The provider, in this case, an eCommerce merchant explains them, and the customer who wishes to purchase goods agrees to them.
A T&Cs page outlines the responsibilities of both parties, which can include information on shipping, returns, payments, and other relevant details related to the sale of goods or services on your website. Having clear and concise terms of service can protect you, the merchant, and the website owner, from potential legal issues by specifying the conditions of the sale and addressing potential areas of dispute. T&Cs also protect your customers by outlining their rights and what they can expect from you.
Probably the most important reason to have a T&Cs page is to protect yourself. The eCommerce industry is growing quickly, and defending your business against the competition is imperative. For example, your terms and conditions may lay out specific restrictions related to the resale of your products.
They can also vary by country and even from state to state. Some countries and governing bodies like the European Union maintain laws that require websites to have certain disclosures and agreements in place. These include returns and privacy policies, which are taken very seriously. Failure to comply with these laws can result in fines or penalties, so you must ensure your T&Cs page is both up-to-date and in compliance with the relevant laws wherever you do business.
You’re required to abide by the laws of the countries and states where you sell. However, you set your own rules when you clearly define the terms and conditions of your store. Depending on the types of products you sell, you may choose to have stricter rules than those set out by the governing bodies in the jurisdictions where you operate. These may include:
When creating terms and conditions for an eCommerce website, it’s important to include the following elements:
Clearly define the parties involved in a sale. For example, your customer becomes a “Buyer” and you may choose to list yourself as a “Seller” or perhaps “The Company.” Other definitions you can include are:
While you don’t need to describe every product you sell, you should feature a concise overview of your products and services in your T&Cs. For example, ERIKS North America, an industrial supplier of hydraulic hose, gasket, and conveying system solutions, simply describes “Products” as “the equipment, parts, materials, supplies, and other goods Seller has agreed to supply to Buyer under the Contract.”
If you offer a warranty or a promise of satisfaction, such as a 30-day money-back guarantee, it’s important to define their terms here as well.
Explain the ways your customers can purchase your products or services. As a seller, you may choose to include a note on all of the platforms where you sell products as singular T&Cs for your company that encompasses everything. For example, if you sell on your website as well as in a physical store, you can describe the nuances of sales. In this case, you may opt to accept Apple Pay, Google Pay, credit cards, and Paypal for online orders and allow your customers to pay with credit, debit, or cash in-store.
Other special payment arrangements, like Buy Online, Pick Up In-Store (BOPIS), should be outlined and described here as well. You may also choose to offer Buy Now, Pay Later, or “layaway” style payment plans. Each payment type may have its unique conditions: For example, if your customers decide to pay for products in installments, you can elect not to ship the product until you receive the full payment.
Nowadays, customers have high expectations for shipping timelines and costs, and they commonly look at delivery fees and schedules before they buy. Your terms and conditions page is an excellent place to lay out all relevant information related to this topic.
One important element to note here is the limits of liability once an item has shipped. Do you provide insurance coverage on products, or will customers need to pay for that protection? Detail this information and make it readily available to your customers to minimize confusion and shipping issues.
You can also name the shipping carriers you use if you desire, which may vary by country. Be sure to outline the estimated shipping times for domestic and international shipping as well (and whether or not you ship outside of the country).
Your returns and refund policy is one of the most important components of your eCommerce strategy, so your T&Cs must adequately describe how you handle this process. Communicate the requirements for a purchase to be eligible for a refund, such as a specific time frame, unopened condition, or other factors.
You must also thoroughly describe the process of your refunds, including whether or not you’ll issue a refund or give a store credit, the timeline for processing returns and refunds, and the avenues of recourse customers have if their refund fails to come through.
Likely, you’ve purchased an item online only for it to arrive and fail to live up to your expectations based on how it looked on the website. Most of us understand how colors and textures can appear differently on different screens. For this reason, a disclaimer regarding potential inaccuracies in products can offer you protection as a seller.
Further, a limitation of liability statement covers you in the event there are mistakes in your website content. This is especially important if you feature third-party content like consumer reviews. You can include a note regarding aspects like derogatory content or offensive postings from others and how this is outside of your control.
Customers care deeply about their safety and privacy online. Moreover, many countries now require all eCommerce sites to abide by specific restrictions related to privacy and security; companies must publish such policies and make them easily accessible to shoppers. With this in mind, it’s no longer just a best practice but a legal requirement for you to include a privacy and security policy in your online store’s terms and conditions.
Methods of contact are among the most important information to include in your terms and conditions (and on your website in general). Explain how customers can get in touch with you if there are issues with their purchases, remembering to include your customer service hours and days of operation.
Give as much information as possible to maintain open communication channels. You can and should include your company’s:
Describe where your website operates relative to governing law (i.e., state, province, or country). For example, if your company operates from Florida, you may write something like, “These Terms and Conditions are governed by the laws of the United States of America and the laws of the State of Florida.”
In the event a conflict arises with a customer, it’s important to have a clear outline of the process for resolving legal disputes and to define the available channels of arbitration or mediation should this occur. (This may vary based on jurisdiction.)
Having clear and easy-to-understand terms and conditions helps establish trust with your customers and ensures they understand their rights and responsibilities when using your website. However, consider seeking legal advice to ensure your terms and conditions comply with all relevant laws and regulations.
We’ve detailed why you need a Terms and Conditions page and what to include, so you’re probably wondering where to begin to craft your own. Your options are simple: You can do it yourself, outsource the writing to a lawyer or underwriter, or leverage a tool to do the heavy lifting for you.
Unless you enjoy writing and have strong attention to detail, drafting your terms and conditions on your own can be an exercise in patience. Writing is a time-consuming activity, and T&Cs add a higher degree of technicality than found on a standard product page or website. For this reason, it’s easy to leave gaps that could make you susceptible to issues down the road.
Because it’s a legal document, you might feel more comfortable outsourcing the creation of T&Cs to a lawyer or legal underwriter who can manage the writing and editing of your document. Of course, this comes at a (usually hefty) fee.
Lawyers often charge in the hundreds of dollars per hour and many have a minimum hourly requirement, meaning that, even if it takes less than 10 hours to write, you’re required to pay for all 10 as part of their terms and conditions. The same can go for a legal underwriter, though costs may be lower.
In addition, when you hire a lawyer or underwriter, you’ll need to agree to a timeline for the deliverables. This can be a quick turnaround, or it could be lengthy depending on their workload and standard service-level agreements.
If you’d rather avoid the hassle of writing your T&Cs page on your own and lack the budget to hire a lawyer or underwriter, you can rely on a platform or tool to create unique terms and conditions page content for you. MyFBAPrep’s Terms and Conditions Generator enables you to craft a custom T&Cs page for your website quickly and easily.
You simply enter your relevant company information, and the tool produces an easy-to-read and comprehensive T&Cs document that’ll protect your business from potential issues. Simply make a copy of the linked document, fill in your company information, and let the tool do the rest!
A Terms and Conditions page is an important component of your eCommerce website. It’s an effective way to protect you and your business from potential disputes by clearly detailing the responsibilities of both you, the seller, and your customers, the buyer. They also establish the rules of engagement between you and your customers. We recommend including a link to your T&Cs on every product page and in your marketing and post-sale emails to ensure your customers have easy access to them at any time.
Although these terms aren’t required by law in every jurisdiction, more and more countries are demanding elements of the traditional terms and conditions document — in particular, privacy and security policies. As such, it’s critical for you to have a legally binding document in place if you plan to scale your business. Failure to have a Terms and Conditions page or comply with laws can result in fines or penalties in some cases. Once you have your T&Cs page, update it regularly and ensure it complies with the relevant laws that govern the markets where you sell.