Key Legal Issues for eCommerce Entrepreneurs

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While we’ve all heard the old axiom; “Ignorance of the law is no excuse.” This is particularly true in ecommerce. After all, if your awareness of the web tells you it’s a good place to do business, you should also know it’s a great place to conduct research to make sure you’re in compliance with the law. With that said however, while no article you find on the internet should be considered professional legal advice—including this one— there are some key legal issues for ecommerce entrepreneurs that can be outlined in an article such as this.

1) Anti Spam Rules

In your zeal to promote your new business, you must be careful to avoid infringing upon the privacy rights of your potential customers. While email marketing has proven to be quite effective, you must be careful to avoid violating the CAN-SPAM Act. In a nutshell, each marketing-oriented message you send must be clearly labeled as advertising. Your subject line and the header of the message must also be free of misleading statements. A valid email address must be contained within the message to give recipients an opportunity to respond. To ensure you’re only communicating with people who want you to do so, your email must always include a method by which the recipient can elect to unsubscribe from future messaging. If they request to do so, you must comply in a timely fashion.

2) Privacy Policies

All commercial websites or online services engaged in the collection of personal information from its users must post their policies regarding its use and strictly comply with them. Known as your Privacy Policy, the required disclosures include the categories of information collected about site visitors and the categories of third parties with whom you may share it. Your privacy policy must also provide explanations regarding your usage of cookies and other online tracking practices.

3) Data Security Initiatives

You have to inform users of the methods you employ to protect their private data, such as credit card numbers and personally identifiable information. The best website builders for ecommerce usually have security mechanisms such as Secure Sockets Layer technology (SSL) enabling you to secure the connection between your website and your customer’s browser. If you store sensitive data, you must include a notification in your Privacy Policy informing users of this and outline the methods by which their data is protected.

4) Online Privacy Protection Procedures

While there is no broad law covering online privacy protection in the United States, California has strict rules about it. Given the sheer size of California’s population, the odds are good you’ll wind up conducting a transaction with one of its residents, so you’ll want to pay attention to the California Online Privacy Protection Act. When you collect names for your mailing lists, you must ensure your customers or website users have agreed to the Privacy Policy you set up on your website. The best way to do this is have users click next to a statement that says their use of the site constitutes their agreement to the tenets of your privacy policy.

5) Terms and Conditions Statements

These establish the rules of the game for your customers and you regarding purchases made. They disclose the liability you’ll accept in the event a product fails and they list the procedures you’ll follow for resolving any potential conflicts. They also set you in good standing with credit card operators, who require a Terms and Conditions statement and a Privacy Policy statement to be in place before you can use them to process payments.

While most consumers don’t know the law requires these things to be in place, heeding these key legal issues for ecommerce entrepreneurs will go a long way toward establishing the credibility of your enterprise. In addition to indicating your willingness to provide transparency, they say you plan to be around for the long haul. This is very important when it comes to converting browsers into buyers.

Note: No article you find on the internet should ever be considered professional legal advice—including this one—when you have specific legal questions you should always consult an attorney.