5 Things To Understand About E-Commerce Law Before Moving Online
E-Commerce is the broad term used to describe the act of doing business online. When a local brick and mortar store decides to increase their customer base, the first thing it does is open an e-commerce presence. The laws that govern e-commerce sales and the laws that protect e-commerce intellectual property can be very different than running a local brick and mortar store. Before you make the move to being an online retailer, there are things about e-commerce laws you should understand.
You May Have To Collect Sales Tax
If your business is located in a state that does not charge sales tax, then the idea of collecting sales tax may be foreign to you. But if you intend to ship to other states, then you may have to collect sales tax for those states.
Some states, such as New York, are considering having any transaction with a New York resident subject to sales tax. Some states do not force vendors to collect sales tax, while others have to collect sales tax if they have a business presence in the state they are shipping to. It is important to talk to an accountant and lawyer about sales tax and know what you have to do to avoid problems with various state governments.
Handling Refunds
As a local business, you get to know your customer base and you get to understand their tendencies. If there is a particular customer who returns a lot of undamaged product, then you can develop a policy to no longer sell to that customer. But when you put up an e-commerce website, the world is your target audience and anything can happen.
You will need to accept the fact that you will have to issue refunds, and you will also have to accept the fact that you will usually have to issue refunds before you receive your product back. You need to develop a comprehensive returns policy that outlines exactly how customers can get their money back and any criteria you will have for accepting a returned product. This policy should be part of the terms and conditions that your customers must read before they do business with you.
Privacy Laws
As an e-commerce website, you must know the privacy laws as they apply to your customer base and you must post your privacy policy for all to see. These laws vary from country to country and, in some cases, state to state. If you do not abide by these laws, then your business could be shut down and you could face fines.
One of the areas of privacy laws that gets a lot of new e-commerce business owners in trouble is maintaining privacy laws in Europe. If you are going to open up your website to the entire world, then you will have to become familiar with the privacy policies all over the world as well. It is best to consult with an attorney about these laws and to get help in creating a privacy policy that keeps your business out of trouble.
Market Research
One of the big advantages of e-commerce is the ability to build a huge email list of consumers you can send marketing messages to whenever you want. But if you do not follow the international anti-spamming laws, then you could be in trouble.
The anti-spamming laws explain how a company must only send marketing emails to those consumers who have agreed to receive them. If your e-commerce business starts sending unsolicited emails, then your email account could be shut down for good. The easiest way to do this is to ask customers to join your mailing list using a form on your website, and then ask that customers click on a box to opt-in to receiving marketing emails. Know that google has their own system for ranking and ads so any dishonest tactics could get your ecommerce move killed before it even gets off the ground. Make sure your strategy is legal and sound.
Truthful Representation Of Your Product And Company
The Federal Trade Commission monitors Internet marketing just as it does any other type of marketing. Some business owners think that they can claim whatever they want with an e-commerce website because there are no repercussions. But the truth is that your website could be reported to the FTC for misleading marketing and you could be in a lot of trouble with the federal government.
Online commerce and technology are constantly changing how we do business. Opening an e-commerce website can give you access to millions of potential customers all over the world. But if you don’t follow the laws associated with e-commerce, then you could be out of business before you get started. Before you debut your e-commerce website, you should consult with a qualified attorney and a qualified accountant to make sure that your business is following the rules.
