What to consider when running an online business?

Technology has drastically changed how people shop, with more and more people buying from online retailers. The Coronavirus pandemic has further accelerated this change, with online sales growing by about 40%, according to the British Retail Consortium (BRC). This move towards more e-commerce is something that many companies – particularly startups and small business enterprises (SMEs) – can use to their advantage. It is, however, vital to ensure that your legal processes are optimised for handling online business, as there are various different aspects that must be considered.

 

Having the right documents for online marketing

Even if you are simply marketing your products using a website or email, there are certain rules which need to be followed. Data protection and privacy laws and direct marketing rules must be abided by at all times. This not only means that you must keep any personal information that you collect on visitors to your website safe and secure, but you must also not contact private customers (ie consumers) directly by email, phone, text or post unless they have given permission (or have opted in). 

The term ‘soft opt-in’ is sometimes used to describe the rule about existing customers. The idea is that if an individual bought something from you recently, gave you their details, and did not opt-out of marketing messages, they are probably happy to receive marketing from you about similar products or services even if they haven’t specifically consented. If they have opted in, they should always be given a way to easily opt-out (eg provide an unsubscribe link in emails).

If you are carrying out telesales activity, you should check with the Telephone Preference Service (TPS) to find out if any numbers have opted out.

It is recommended that you have in place specific policies – such as a Privacy policy and Cookie policy – outlining your business’ practices in relation to the collection, storage and use of customer personal data gathered on your website. As well as reassuring online customers, they can also ensure that you have their permission to store cookies on their computer.

 

Differences between selling online and traditional business

Although the success or failure of an online business depends on similar techniques to those found in ‘offline’ businesses, there are different requirements and regulations. 

Businesses that advertise their goods or services online must comply with the Electronic Commerce (EC Directive) Regulations 2002, providing certain information (business name, registered address and any company registration number) on their website. Businesses that are actually conducting e-commerce must provide further details, including:

  • Terms and conditions that are readily accessible, fair and meaningful
  • any relevant codes of practice/conduct and how they can be accessed
  • technical means by which any input errors can be corrected

Online businesses must also comply with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 providing details about your business and information about:

  • goods and/or services that are being sold and pricing
  • payment and delivery arrangements
  • the right of the consumer to cancel their contract within a specified time
  • if applicable, details of the trader’s complaints handling policy
  • where applicable, any compatibility of digital content with hardware or software

The Regulations also provide consumers with the right to cancel their contract within 14 calendar days (commonly referred to as a ‘cooling-off period’) and make specific provisions regarding digital content

Ensuring that you have up-to-date Website terms and conditions and relevant terms and conditions for online sales (eg Terms and conditions for sale of goods to consumers via a website or Terms and conditions for supply of services to consumers via a website) can help to avoid many of the pitfalls of selling online. 

For more information, read Online business regulations and Doing business with consumers

 

If you don’t know where to start or if you have any questions, Ask a lawyer. If you require tailor-made, bespoke documents consider using Rocket Lawyer’s bespoke legal drafting service.

 

Rebecca Neumann

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