How to make your online store legally wa­ter­tight

The legal basics of eCommerce differ from those of sta­tion­ary commerce. In addition, there are various legal aspects that only apply to online stores.

These include legal reg­u­la­tions such as:

• the GDPR
• the not-yet active ePrivacy reg­u­la­tions
• and online cookie reg­u­la­tions

All three reg­u­la­tions follow the same goal: to protect user and customer data and ensure that the process by which companies collect data is trans­par­ent. Therefore, web store owners need to inform their customers of how they store personal data in case of a purchase and cookies when they access the store website. If you fail to provide the necessary in­for­ma­tion, you could risk high fines. So if you’ve yet to install a solution that informs customers about how you track cookies, you’re better off not tracking any user ac­tiv­i­ties just yet.

The oblig­a­tion to provide in­for­ma­tion about how user data is handled is not the only stumbling block on the way to a legally secure online store. The following points also play an important role in meeting the legal re­quire­ments for an online store:

• Tools for error detection and cor­rec­tion: Provide your customers with tools that alert them to input errors in the course of their order so they can be corrected before they are submitted.
• Copyright notice: Your online store is a com­mer­cial web project. If you plan to use content such as images and photos, for which you don’t own the copyright, their use must be con­trac­tu­al­ly agreed. You can find out more about online image rights in our article on the topic.
• Confirm receipt of order on a "permanent data carrier": You are obliged to confirm contract terms as­so­ci­at­ed with any purchase made in your store on a "permanent data carrier", such as email or a paper printout that is added to the shipment.
• Label the order button correctly: The button that customers use to place an order must be clearly labeled as such. Labels such as “Pay now” or “Buy” are rec­om­mend­ed, while “order” or “register” are in­ad­e­quate or even mis­lead­ing and therefore not legally compliant.
• Observe geo-blocking pro­hi­bi­tions: You can set the delivery areas for orders through your store in­di­vid­u­al­ly, but your offer can’t exclude users whose place of residence falls outside of your delivery area. You can find more detailed in­for­ma­tion in our article on geo-blocking pro­hi­bi­tion.

In times of the coro­n­avirus pandemic, a legally compliant online store is now more important than ever. After all, eCommerce busi­ness­es have profited from strict reg­u­la­tions imposed on public life which has affected sta­tion­ary stores more than most other busi­ness­es.

There is no doubt that both large sales platforms such as Amazon and eBay as well as many web stores have benefited from the crisis in recent months. Stores that primarily sell clothing and luxury goods (cars, watches, etc.) on the other hand, have suffered a drop in sales, es­pe­cial­ly during the spring 2020. The same applies - not sur­pris­ing­ly - to the tourism and en­ter­tain­ment in­dus­tries. It’s a problem that has quickly threat­ened the existence of many operators of smaller online stores.

Ad­di­tion­al­ly, eCommerce logistics have been hampered by the coro­n­avirus crisis. In some instances, pro­duc­tion and delivery chains could not be main­tained which has led to customer com­plaints over long waits for ordered goods. For stores that rely on drop shipping, i.e. those whicch don’t have their own ware­hous­es, this spells disaster.

As a reliable digital partner, IONOS supports you during these difficult times. Our extensive range of support services can be viewed on our dedicated page.

It’s never been more important to watch our for legal aspects of online store creation and main­te­nance. eCommerce plays a central role in our daily lives and it hasn’t even reached its full potential just yet. The following check list sum­ma­rizes the most important duties and building blocks to create a legally compliant online store.

A dis­claimer is a legal notice covering the basic issues that could arise when operating a website. Many websites can use a simple dis­claimer, although other business may find they need something more spe­cial­ized depending on what products or services they offer. In 2004, the FTC (Federal Trade Com­mis­sion) started to crack down on web busi­ness­es that didn’t have the nec­es­sar­i­ly legal in­for­ma­tion on their websites. Some were shut down and their operators faced with huge fines.

A privacy policy tells website visitors what type of personal in­for­ma­tion you are col­lect­ing from them and how you plan to use it. It is therefore a legal re­quire­ment and is usually found on the T&C page. It is also advisable to specify if you don’t intend to collect any in­for­ma­tion (such as e-mail addresses and names) so visitors feel at ease and may be more likely to stay on your site. If you have a contact form on your website (e.g. for customers to subscribe to your newslet­ter), you should let visitors know how any in­for­ma­tion they enter will be used.

The afore­men­tioned GDPR and online cookie reg­u­la­tions should be con­sid­ered here.

While you must notify your customers that you’re using cookies, you can employ tracking solutions without their explicit consent. It’s rec­om­mend­ed that you install a solution that notifies your customers and allows them to give consent of cookie tracking. These notices must reach your customers before their data are being trans­mit­ted. Typically, this process is presented in the form of a pop-up which informs about how you store data and allows customers to accept or deny the use of cookies. 

Depending on know-how and abilities, you can program the cookie pop-up yourself or use a cookie consent tool. For Content Man­age­ment Systems, there are various plug-ins available to include cookie notices to make sure your web store complies.

To create a legally secure online store, your product de­scrip­tions must be complete and not give a false im­pres­sion of products. Check that all necessary in­for­ma­tion are included and that relevant pieces of in­for­ma­tion are accurate. Typical, illegal in­for­ma­tion include, for example, the following product details:

• Product type
• In­gre­di­ents/com­po­nents
• Date of man­u­fac­ture
• Avail­abil­i­ty
• Fitness for purpose
• Possible uses
• Quantity
• Origin

This kind of policy is required so that customers know when to expect their products and how they will be delivered. It’s important that customers know the expected delivery periods and costs otherwise they may look elsewhere if they can’t find the in­for­ma­tion. Including a discount or promotion can encourage customers to buy more, for example, 'free shipping on orders over $100'.

Refunds are a normal part of online business and customers will want to return or exchange their goods from time to time. They are more likely to make a purchase if they know they can send the product back if it’s not to their sat­is­fac­tion. Different states have different rules con­cern­ing returns so be sure to check which one applies to you. For example, in Florida, you must make it clear if you don’t offer refunds otherwise customers may return goods for a full refund within 20 days of pur­chas­ing. In Cal­i­for­nia, customers have 30 days to return what they don’t want.

A good idea is to include the refunds policy with the terms and con­di­tions so that buyers know their rights and what to expect. You could embed a check box onto your site so that users have to agree to the terms and con­di­tions so you know they have read them and this protects you too should any problems arise.

It’s important for online business owners to offer a range of payment methods so that every visitor is catered for. You could lose a potential customer if they don’t see their preferred method being offered. You must ensure that you provide at least one payment method that doesn’t incur ad­di­tion­al charges.

You must let your customers know if there are charges for using credit cards or other payment methods. This should be explained as part of the order process and in detail on a sub-page that provides more in­for­ma­tion about the payment options.

As mentioned, the order button must be ex­plic­it­ly labeled as such to ensure your online store is legally sound. In the past, there have been cases of dubious and fraud­u­lent methods to lure victims into sub­scrip­tions. In these cases, customers would enter sub­scrip­tion contracts without their knowledge.

Customers should be able to see that by clicking on a button they are entering a sales contract. Therefore, the button should state the obvious such as

• ”Buy now“
• “Order now”
• “Commit to pay”
• “Commit to purchase”

You should refrain from using dubious wordings such as “Finish shopping” or “Register” or even “Next”.

If there’s no ad­di­tion­al in­for­ma­tion, a customer can expect that products are available im­me­di­ate­ly. In most cases, im­me­di­ate­ly is defined as within five days. A shipping policy is required so that customers know when to expect their products and how they will be delivered. It’s important that customers know the expected delivery periods and costs, otherwise they may look elsewhere if they can’t find the right in­for­ma­tion. Including a discount or promotion can encourage customers to buy more, for example, 'free shipping on orders over $100'.

All product and service costs listed on your website must be accurate and complete. Product prices should list the cost including and excluding sales taxes. Shipping costs must be stated and be easy to find. You should not add notes such as “shipping costs on request” as this can be confusing and lead to frus­tra­tion among customers.

Newslet­ter marketing is a favored and cost-effective marketing strategy to reach existing and potential new customers. Newslet­ter reg­is­tra­tions are often included on a website as part of an online form. The CAN-SPAM Act allows direct marketing messages to be sent to re­cip­i­ents without their per­mis­sion, although this isn’t the case in some areas (i.e. Europe and Canada) where it’s forbidden to send e-mails and newslet­ters unless the recipient has specif­i­cal­ly asked for them. So even though in the US, you can send com­mer­cial e-mails in the hope of winning over potential customers, you must have an opt-out or un­sub­scribe button so your customers can let you know they don’t want your in­for­ma­tion. Coming across as spammy can damage a company’s rep­u­ta­tion so to play it extra safe, you should make use of the double opt-in process. The customer signs up to the newslet­ter, then receives an e-mail with a link that they have to click in order to activate future newslet­ters

As a store owner, it’s your re­spon­si­bil­i­ty to provide your customers with relevant content in a pro­fes­sion­al and trans­par­ent way. Besides this valuable content, it is also important that pages are clearly marked and always available. The topic of data pro­tec­tion is not only relevant for legal reasons, but is also very important for online busi­ness­es from a marketing per­spec­tive.

Please note the legal dis­claimer relating to this article.