Why should you have Terms and Conditions for your ecommerce site?

While it’s true that hardly anyone reads a site’s T&C document, it’s still a good idea to create one for your website, particularly if you’re an ecommerce merchant. Here are the top reasons to outline your Terms and Conditions:

1. It provides legal protection

This might come as a surprise, but there is no legal requirement for ecommerce businesses to provide Terms and Conditions on their site. Because of this, many businesses make the mistake of thinking that T&C aren’t that important. But you risk leaving yourself open to legal action if you don’t have one.CLICK HERE TO GENERATE YOUR ECOMMERCE TERMS AND CONDITIONS WITH TERMSFEED >>

Legal disputes cost a lot of time and money, and for the most part can be easily avoided if you put some pre-emptive groundwork in — i.e., your Terms and Conditions. When you set very clear rules of conduct, you can stave off a dispute before it happens. So, no matter what it is that you sell on your ecommerce site, you should make sure you are protected against any nasty surprises, such as misuse of your site or plagiarized content.

2. Your T&C can build customer trust

Being transparent with how you operate makes you much more trustworthy to consumers, compared with you having no Terms and Conditions available at all. This is important because trust is among the biggest concerns that consumers have when it comes to online purchases. Having well-crafted T&C could well be the difference between your customer choosing you over a competitor.

What to include in your Terms and Conditions

Now that we’ve discussed the importance of having Terms and Conditions for your ecommerce site, let’s discuss what it should include. Every website is different so, the sections of your T&C may vary, but here are some of the most common components typically included in an ecommerce site’s terms.

1. Information accuracy

If you are running an ecommerce site with a lot of product pages, it can be a full-time job making sure that all the information is accurate. It’s one of the most likely errors that will occur in your online store, so it opens the door to a lot of customer service issues. For this reason, it’s very important that you stipulate that information can sometimes be inaccurate and change without notice.

This section should mention that despite your best efforts, on-site information might not be up-to-date and that certain information (e.g., prices, product descriptions, stock quantities) may change without notice.

Below is an extract from clothing retailer H&M’s T&C section on information accuracy:

H&M clearly states that information on its site is not always up to date, and that information (including pricing) can change at any time. As a clothing retailer, it also makes specific reference to how the color of garments may look different online due to screen configurations. This is important, considering that 54% of consumers have returned items bought online due to complaints over color.  

2. Terms of sale

This part of your T&C should set out clear terms on how products can be purchased, whether there are any restrictions e.g. the restriction of sale for age-restricted products and services, and what happens in the event that a product cannot be supplied.CLICK HERE TO GENERATE YOUR ECOMMERCE TERMS AND CONDITIONS WITH TERMSFEED >>

HBO’s ecommerce T&C outlines this quite well. Its “Terms of Sale” section mentions that by placing orders on the site, the customers represent that they are of legal age and that the information they provide is true and accurate. The terms also mention that HBO takes steps to verify customer information prior to accepting and order and that the company has the right to accept, modify, or decline orders.

3. Payment terms

This is where you will cover any terms relating to the payment of the product/service you sell. This is one of the biggest areas of liability for your business, so you need to make sure that your customers understand the expectations surrounding online transactions.

The payment terms section of your site should include:

  • The payment methods you accept (Visa, Mastercard etc.)
  • Missed/late payment conditions
  • How you will handle refunds/returns
  • How you will handle payment disputes

Because they are an intermediary between the buyer and seller, Etsy has very comprehensive T&C for its site. It establishes the rights and responsibilities of both the buyer and the seller. It also states that in agreeing to their T&C, the customer is also agreeing to the T&C of third-party services such as PayPal as well.

4. Shipping & delivery

This is an area that has a lot of potential for error in ecommerce. A delivery could get delayed, damaged in transit — or not arrive at all. This is especially important if you use a 3PL provider or freight company. This is because your business no longer has direct control over what happens to orders. But the buck stops with you, as far as your customer is concerned. Although this is important for any seller, it has particular relevance to those who sell products that are more logistically difficult to fulfill.

That’s why it’s essential to outline your shipping and delivery terms, in which your discuss the amount of time it takes to fulfill orders, how costs are calculated and whether extra fees are applicable, and what your level of responsibility includes when third parties are involved.

If we go onto IKEA’s Terms and Conditions, we can see that they have laid a specific page just for delivery and shipping information:

If we look into the details of what IKEA’s T&C covers, it’s pretty exhaustive and written in an FAQ format for the sake of clarity. The T&C specify, among other things, how the estimated delivery date is calculated, between what hours deliveries are made, and what additional fees may be added.

Many ecommerce businesses may not need delivery and shipping T&C as comprehensive as IKEA. However, it’s very important that your T&C make provisions for order processing and shipping times.

5. Intellectual property

As an online business, you are more likely to be vulnerable to intellectual property theft in the form of your logo, business name or site theme. For this reason, you need to protect your intellectual property within your T&C by stating your ownership over such features.

An intellectual property clause should act to ensure that brands or trademarks are not misused in any way and clearly state that nothing contained within the website should be construed as granting any license or the right to use any trademark without the prior written consent of the owner of the website.

Victoria’s Secret keeps its intellectual property section brief and to the point. It states that site content and features can only be used for ‘personal and informational’ purposes by the customer. Otherwise, any kind of reproduction without their permission is strictly prohibited.

6. Disclaimer of liability

Things don’t always go according to plan. Product losses, damages, injuries can occur. As such, your T&C should specify the damages that one party e.g. ecommerce store owner, will be obligated to provide to the other e.g. customer, in the event of product failure and should reflect the level of risk involved.

It will also specify what the ecommerce store owner will not be responsible for in the event of any loss, liability, damage (whether direct, indirect or consequential), personal injury or expense of any nature whatsoever which may be suffered by the customer.

Check out the following example from Alex and Ani:

7. External Links

If your site contains links to third-party websites, be sure to mention that such links are outside of your control and usage should be at the user’s/customer’s own risk.

Below is a good example from Wayfair, which has a “Links to Other Websites” section in its Terms and Conditions. In it, Wayfair states that any links pointing outside of its website are provided for the user’s convenience and that Wayfair isn’t responsible for the quality, nature, and reliability of third party content. The terms go on to state that the inclusion of third party links does not imply endorsement by Wayfair.

8. Loyalty programs and promotions

Consider including provisions around your promotional deals or loyalty programs. Below is an example from cosmetics retailer Sephora:

In its T&C, Sephora has dedicated specific passages to two of its well-known sales promotions. These are not regular features in ecommerce, so they wouldn’t be covered in a general T&C agreement. To avoid any liability, Sephora has laid out specific conditions.

For example, if a specific free sample is out of stock, the T&C state that Sephora can replace this with another sample at their discretion. They also state that gift cards do not contribute towards the minimum purchase requirement for promotional codes.

9. Terms of Use

Your website Terms of Use simply sets out the terms for accessing a website and applies to every single visitor. The Terms of Use usually cover items such as privacy and prohibited uses of the website.

Starbucks covers this in the “Acceptable Use” section of its T&C. In it, they state that their site must not be used to harass, abuse, defames, or violate the rights of any other party. The clause also says that Starbucks has the right to cancel any user’s participation in its sites if it deems that the user violated its terms.

How to create ecommerce Terms and Conditions

As you can see, your ecommerce Terms and Conditions covers a lot of ground. Drafting this document can seem daunting — and it could be, if you do it yourself. Fortunately, you don’t have to. Consider the following options when creating your terms and conditions:CLICK HERE TO GENERATE YOUR ECOMMERCE TERMS AND CONDITIONS WITH TERMSFEED >>

1. Get legal help

If you have the budget for it, consider hiring a lawyer who specializes in ecommerce to draft your terms and conditions. This is a great option because it ensures that your terms are tailored specifically for your site.

That said, hiring a lawyer isn’t cheap, and this option can set you back hundreds if not thousands of dollars.

On that note, if you’re set getting help from a lawyer but don’t have a huge budget, you can consider using sites such as LegalZoom, which offers a service specifically for terms and conditions. You’ll schedule an appointment with a LegalZoom attorney, who’ll then learn about your business and draft your T&C docs for you.