With coronavirus, you may have decided to set up an online store, or are considering doing so, but you need to know how selling online differs to selling in a bricks and mortar shop. Pivoting your shop online raises various legal matters you need to be aware of. You’ll be engaging in e-commerce, and this blog will give you a brief overview of the main legal considerations.
Product descriptions for your online store
Customers cannot physically touch your goods of course. So the product descriptions, and any images of your products on your website become an essential part of your customer’s experience. Where you upload pictures of your products, you may find that the pictures of the products are not the same as the actual product, and the pictures themselves will also differ on your screen to those seen on the screens of your customers. This is why it is a good idea to state the colour of the product. Keep in mind that customers also cannot feel the texture of the products now, so you may want to also describe their texture. But it is really important to ensure that any descriptions you write on your website are as accurate as possible, and the images you post are also as accurate as possible. In fact, the Australian Consumer Law states that descriptions of your products cannot be misleading to customers, so you must at all times describe your products as they are.
Setting prices in your online shop
When pivoting your shop online you should can use the same prices that you have already been using in your bricks and mortar store. However, if your goods are in high demand because they are vital to the health and safety of customers during the pandemic, it maybe unconscionable to set a high price. There have been laws passed in relation to excessive pricing of face masks, hand sanitiser and similar items, so make sure you are compliant in this regard. Any prices you post should also be accurate to comply with the Australian Consumer Law. Pivoting your shop online involves some work, but you may find that with so many customers online at present you may even have an increase in sales. And, the benefits of e-commerce may help you not just during the pandemic but long into the future.
Online store orders and payment
Of course customers can’t just pick up their item and take it to the checkout; they will need to place an order online. When you are selling in your shop, it is usually obvious to your customers if you have run out of stock, but a customer cannot see this online. So, it is often a good idea to alert them to products that are low in number. If a customer pays for an item and you run out of stock you will need to refund them in full. You also cannot publish that you have more stock when you don’t or limited stock when you don’t as this would also be misleading your customers. When organising a way for your customers to pay for goods, you should ensure that you have a secure gateway. There are many secure options available today, but have a look at the fees, and ensure there are anti-fraud features built into the option you choose. E-commerce needs to be safe and secure for your customers.
Delivery from your store
When you sell products in your physical shop, a customer walks away with it. There are usually no issues as to receipt of the product. However, online shopping by its nature involves delivery, and in many respects the delivery is outside your control (unless you choose to deliver yourself). Whilst you should publish accurate delivery times and charges as much as possible, you will not have control over any late, lost or stolen deliveries. Having properly written terms and conditions including disclaimers will ensure you are not liable for any delivery issues. These terms and conditions should state that delivery matters need to be resolved with the courier company (usually Australia Post). For more expensive products you may want to give customers the option to purchase insurance for the delivery, or offer registered post. This is even more important right now, as we are hearing that there have been many products go missing in the post during the pandemic.
Refund considerations for e-commerce purchases
The Australian Consumer Law applies equally to sales that are made online as they are to sales that are made within your physical shop. This means that your products come with automatic consumer guarantees such as that they are not faulty and match the description provided. If a product breaches a consumer guarantee you will need to provide a refund. Where you have sent the product to the customer wrapped in beautiful packaging, they do not need to return it to you in that packaging to be entitled to a refund. You can, however, request proof of purchase. Your website should have terms and conditions for your online store on it so that customers know how orders, cancellations, delivery and refunds work. This is important because in many situations when pivoting your shop online, you will not be able to offer the same level of customer service that you can in person. Perhaps also consider some additional methods of communication, such as online chats for your e-commerce store.
Important legal documents for your online store
When you start selling online you should make sure you have 3 main legal documents. Firstly, you should have some general website terms to help protect your brand, trademarks, copy and images, and protect you if there are errors or viruses in your website. Secondly, you should also have some “terms of sale, or “online store/shop terms and conditions” which set out various rules for how your shop will work; how orders, payment, delivery and refunds work. These terms should help you comply with the Australian Consumer Law, and also limit your liability. Thirdly, you should also have a privacy policy because when customers are dealing with your store, you will likely be collecting their personal information. You can take a look at our online store package which includes these important three legal documents here.
If you need any legal assistance setting up your store online, or want to speak with an e-commerce lawyer please feel free to book in a free 20min consultation.
