Points to be included in E-Commerce Terms & Conditions
Setting out good terms and conditions for your small business for many entrepreneurs this task may not be their first priority, but getting it right is crucial to ensuring healthy cash flow. A well-drafted term should act like a manual or recipe book for doing business and having absolute clarity on what should happen in a given situation. Terms and conditions can save a lot of money by addressing all issues at the outset. It in turn avoids disputes later on about what might or might not have been agreed.
Having a set of terms and conditions on your e-Commerce site will serve as protection to your business and may help resolve problems in your favour should they arise e.g. reduce your exposure to liability in the event that a product purchased from your website fails, so it is in your favour to make sure it is comprehensive. It can be seen as an opportunity to stipulate important aspects which will help to safeguard your business such as disclose conflict resolution procedures should any disputes between you and your customer arises, specifying how it will be handled and resolved, clarification of the purchasing process, protection of trademarks/ intellectual property (IP) etc. Not only that, having a carefully crafted set of terms and conditions on your website can help to instill a sense of trust in your business. Set of points to include are:
Buy Back Policy
Policy of most firms to accept returned merchandise from their independent representatives at a specified price comes under buy back policy. This policy is applicable for a specified period (as mentioned in respective Terms & Conditions) after the sale, provided the returned goods are in resalable condition. It aims to protect buyers from their over optimism, and to discourage front-loading by the firm.
You need a scalable strategy for incentivizing customers to buy from you over and over again. And that’s where customer loyalty programs come in. With the right initiative, you can turn one-time buyers into repeat customers, and keep your brand top of mind. Reward Points have continually been used in e-commerce to not only entice customers but to re-market to them in a way that strengthens their affinity to the brand.
Cookies are an essential part of the Internet. Without them, web pages would be a great deal less useful and interactive. E-commerce would be impossible. They give websites the ability to remember and improve. E-commerce sites use a combination of session cookies and persistent cookies to create a seamless shopping cart experience. As the user adds items to her cart, session cookies keep track of the items. If the user abandons the cart, persistent cookies will retrieve her selections from the database the next time she visits, or allow you to create personalized retargeting campaigns that encourage her to revisit her cart. This is a huge help in encouraging conversions.
A refund policy is exactly as it sounds – a policy which dictates the terms of any refunds or returns which may be offered by the website or eCommerce store. As a consumer, you are certainly familiar with this concept. Before you make a purchase, you may decide to review the refund policy of a given website or store to make sure you are comfortable with the terms.
Disclaimer of Liability
Disclaimer of liability will specify the damages that one party e.g. e-commerce 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 e-commerce 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.
E-Commerce businesses are often more vulnerable to intellectual property theft, whether it be your images, design, content, logos, product descriptions or the overall look and feel of your website. 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.
Payment terms should set out how payment is to be made when purchasing products and/or services from your website. More often than not, full payment is required when an order is placed by a customer. This means that as an e-commerce store, you are not required to provide any goods until payment has been received. Some e-commerce sites will stipulate that until payment has actually cleared, no orders will be dispatched. In the case where payment does not clear, the e-commerce site has a right to cancel the order completely. These extra clauses serve as further protection to a business.
Delivery Terms should cover both shipping and delivery and would typically include what the delivery costs are and how shipping charges are calculated but also (where third party service providers are involved) that the quality of delivery cannot be guaranteed.
Product Information & Warranties
Product information and warranties 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. Some online stores will also include warranty information as part of their terms and conditions whereas others will have a separate Warranty policy.
Right to Cancel
This clause should set out the circumstances in which the customer has the right to cancel their order, the process in which they must follow in cancelling their order and any other requirements e.g. goods must remain unused and returned in its original packaging.
External Links are often provided on sites for the user’s convenience but there should be a clause to state that the links, and the related content, are outside of the control of the e-commerce store owner and usage should be at the user’s/customer’s own risk.
Top tips for setting out your terms and conditions
- Draw up a list of the key commercial terms that you are offering your customers
- Think of all the scenarios of what could possibly go wrong and then set out what you would do in each case.
- Imagine the most awkward customer possible in doing this exercise
- Put yourself in the shoes of your customers and make sure the language is at their level and user friendly. Hiding everything on one page in the smallest font possible will not endear you to your customers
- Don’t forget about the terms of trade – this should be something that you revisit and update, as and when required.
- When in doubt, seek help. Ask for advice from your mentor, a professional or fellow business owners. Put yourself in the shoes of your customers and make sure the language is at their level and user friendly.