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Okay, e-commerce website owners, it’s your turn to discover how to better protect your business. In the last episode, I discussed how to protect your website. I talked about the three most common policies you’ll find on most websites: website terms, a privacy policy, and a disclaimer.
If you have a website with an e-commerce component attached to it, you’ll need those policies and more (which can also depend on the type of business you have). In today’s episode, I talk a bit more about the specifics for protecting your e-commerce business website with your policies. I dive quickly into the revisions to any existing policies needed. In addition, I go into another policy for purchases and break it down into the different types of purchases to cover.
These product areas include even more policy and term considerations to help protect yourself. You’ll hear about shipping for physical products (and questions to ask yourself); refunds, returns, and cancellations for non-physical products; providing community or support for courses and memberships; and protecting your intellectual property rights.
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In this episode:
[02:16] – E-commerce website owners may want to include these updates in their website terms and privacy policy.
[02:39] – Danielle discusses what she calls “purchase policies.” These can assist with some of the most common customer service inquiries.
[03:20] – Breaking it down by product type, Danielle starts with websites selling physical products.
[04:34] – Make sure to include any special shipping policies and discuss these two big reasons for customer complaints.
[04:59] – Danielle reviews eight questions to consider as you build this part of your policy.
[06:42] – Tip: be flexible when things fall outside of your stated policies. Danielle gives a recent example of why.
[07:16] – Next up, Danielle discusses websites selling digital products like ebooks and templates.
[07:48] – What do you include in a purchase policy for digital product websites?
[08:56] – Protecting your intellectual property is extremely important for digital products.
[10:06] – Courses are similar to digital products, but sometimes they have different terms you want to emphasize.
[11:05] – Set clear terms for your course money-back guarantee. Is it conditional or good at any time for any reason?
[13:13] – If you include any community or support with your course, you’ll need to include these kinds of terms regarding participation.
[13:46] – Lastly, Danielle covers membership sites and the three major areas to consider.
[15:00] – What about when someone wants to cancel their membership? Get clear on the way you’ll handle them on your site.
[16:26] – Have rules in place to deal with potential bad behavior and conflicts among community members.
[17:21] – To wrap up, Danielle gives you action steps to take for this episode.
Links & Resources:
- Businessese
- Businessese on Facebook
- Businessese on Instagram
- Liss Legal
- Liss Legal on Instagram
- Handling Your Membership Site's Legal Needs
Episode Transcript
Introduction
Welcome to the Simplifying Legal podcast, brought to you by Businessese. I’m your host, Danielle Liss.
Many years ago, someone told me I was the least lawyer-y lawyer she’d ever met because I helped make legal easier to understand. To this day, it’s one of the best compliments I’ve received in my professional life.
If you've ever felt legal was too scary, too overwhelming, too complicated, or just plain incomprehensible, you're not alone. The Simplifying Legal podcast was created to help.
In each episode, we’ll do a deep dive into a legal topic and give you concrete next steps so you can apply it to your business.
My goal is for you to walk away from each episode thinking, oh, that was easier than I thought it would be.
Let’s get started.
Episode Content
Hey there, I’m Danielle Liss. Welcome to Episode 5 of the Simplifying Legal Podcast. In the last episode, we discussed how to protect your website. We talked about the three most common policies you find on a website: Website Terms, Privacy Policies, and disclaimers.
If you have a website with an eCommerce business attached to it, you will need those three policies and more, depending on your business.
Disclaimer: As always, before we get into today’s topic, a quick disclaimer. This podcast is meant to provide you with legal information only. It’s not legal advice and does not create any type of attorney-client relationship between us. Please don’t take any action without consulting your lawyer first.
Okay, now that we got that out of the way, let’s talk a bit more about protecting your eCommerce website with your website policies.
Generally, if you are hosting an eCommerce business on your website, you will need website terms and a privacy policy. You may still need a disclaimer to cover your content, but you can check out Episode 4 for more information on that.
Website Terms
Within your website terms, you may update to include warranty disclaimers on the products, whether they are physical or digital. Make sure your privacy policy includes information about collection of payment and the third parties you may be sharing information with.
But you will also need to include more about the product side of your business. Usually, I give a generic catchall to these policies, like purchase policies, but it goes beyond that, as we’ll discuss.
Purchase Policy
Purchase policies are IMPORTANT because it can assist with some of the most common customer service inquiries. Rather than separating this by specific policies like we did in Episode 4, I’m going to discuss this by the type of eCommerce business you may have, which includes:
- Physical Products
- Digital Products
- Courses, and
- Membership Sites
Physical Products
First, let’s start with an ecommerce website that sells physical products. First and foremost, if you are selling on a third party’s platform, you may be using the policies on that platform and not something customized to your business.
If you are able to set a separate policy for purchases, returns, and refunds, that aspect of this section will still be applicable.
For your purchase policies, consider the following.
How does the person make a purchase? Usually, this is fairly simple, but you may want to include additional information here if it is needed.
For example, if you sell a product that requires customization of some sort, what is the process to submit it? Will it happen at the time of purchase, or will it be collected separately? Think of this as an overview on all of the important pieces someone needs to know when making a purchase.
Next, are there any special shipping policies? If so, be sure to include them. An example may be a company who ships only to the US.
Most important, discuss returns and refund policies. This is often a big reason for customer complaints, so, often, a clear policy can help you avoid that. Things to include:
- Do you accept returns?
- Do you accept returns only in the event that there was a mistake or the product was damaged? If that’s the case, do you require photos or other proof? Do you require the item to be returned or will you simply ship a new one at no additional cost?
- How long does a person have to make a return?
- Is there a fee to make a return? Or are they responsible for shipping?
- Does the product have to be returned in a specific condition? For example, clothing may need to be unworn and have any tags.
- What is the process to initiate a return? Is it an email? A section on your website?
- How long does it take you to process a refund once the return is received?
- What type of communication can they expect from you?
And, similar to returns, do you offer an option to make an exchange for another product?
One tip – be flexible when things fall outside of your stated policy. Unfortunately, during the holiday season in 2020, the postal service was overwhelmed and many consumers saw massive delays. This had a big impact on a lot of eCommerce businesses that work with physical products. When something happens that falls outside of the carefully set parameters of your purchase policies, be sure to communicate with your clients to ensure that you’re not receiving negative feedback or return requests.
Digital Products
Next, let’s talk about eCommerce websites selling digital products. This might mean ebooks, templates, etc. Remember, we’ll talk about courses and membership sites next.
Businessese is an example of a digital product shop. When you make a purchase, you get a specific product, the templates, but everything is provided digitally. There’s no shipping and the access is instantaneous.
Like a business that sells physical products, a purchase policy is key. Things you may include:
- Any special instructions for purchasing or accessing content.
- Is there a time limit to access the content or is it a lifetime membership?
- If it is the type of product that receives updates, will the purchaser receive access or will they need to purchase it again?
- I’ll use Businessese again as an example here. We give lifetime access to our products, so whenever there are changes made, purchasers will get access to that content. But this is not the case for every business that sells templates, so it is important to be clear so you can address any potential areas for client questions or complaints.
- Do you offer refunds? If so, what is the process? At Businessese, since you get immediate access, we do not offer refunds. This is often the case for businesses that offer purchase of digital products.
An area that is extremely important for digital products is protecting your intellectual property by stating how the purchaser can use the content. This is typically conveyed with a license to use the content in a particular way.
That means that you, as the business owner, will retain the copyright and ownership of the content, but you are granting the purchaser a license that dictates how they can use the product.
The license will typically say how the product can be used and, also very important, how it may not be used. For example, the license may state that the product is for the personal use of the purchaser only. This means that they can use it for themself, but cannot share the content with someone else.
Additionally, you may state more examples of prohibited usage, which may include that they cannot resell or modify the content in any way.
Lastly, depending on the type of product you are selling, you may want to include a disclaimer that you cannot offer any guarantees and you are not responsible for the results they have from using your product.
Courses
Next, let’s look at courses. This is extremely similar to digital products, but it sometimes has different terms that you want to emphasize.
For example, your purchase policy should mirror that of a digital product:
- Is there anything special that they need to do to access the content at purchase?
- How long will they receive content?
- How can they use the content?
Courses also have some areas that differ significantly from a standalone digital product.
First, pricing. Make sure you get specific when it comes to fees and payments. Depending on your price point, you may offer a payment plan. If that is the case, outline how that will work.
- Is it autobilled?
- Are you charging different rates for payment in full versus the payment plan?
- If someone misses a payment, do you suspend access?
Next, and this comes up a lot, is the refund policy. Many courses offer a money-back guarantee. This means that if someone isn’t satisfied, they can request a refund. However, is this good at any time and for any reason, or is it conditional? If it is conditional, it’s important to be clear about what the conditions are.
Some common examples of conditions on guarantees are:
- Limiting the guarantee to a specific period of time. If you do this, make sure it is clear that after that period, a purchaser will not be eligible to exercise the guarantee to obtain a refund.
Next, I’ve seen many companies that require a certain amount of work to determine if a refund will be granted. For example, you must complete the first module and all applicable workbooks.
And, some companies, depending on the platform used to host the course, will determine how much of the content a purchaser has viewed. Then, if they have not viewed it and made use of the full course, for whatever reason, then the business will grant the refund.
Here, it’s important to be clear about how to get the refund, if it is offered.
Next, when you discuss how they can access the content, which typically involves creating an account and login credentials, do you have a prohibition on sharing login information so that third parties can’t access it without paying?
Like digital products, protecting your intellectual property is key when it comes to courses. Make sure you include an appropriate license about how the purchaser can use your content.
One last piece to consider is if you offer any sort of community in support of the course, like a Facebook group, Slack Community, or some other forum, be sure to include terms regarding participation. This could include how the group members interact with one another and could include confidentiality provisions, like no screenshotting and sharing what happens in the group.
Membership Sites
And last, let’s talk about membership sites.
Offering memberships is a great way to build recurring revenue in your business. If you have a membership site, there are three big areas to consider:
- Purchase policies
- Use of your intellectual property, and
- How the members interact with one another.
Let’s start with membership site purchase policies. Do you offer a free trial? If so, do you require a credit card and are they automatically billed upon expiration? Be clear about how you process the billing.
Membership sites may also offer differing purchase options. You may charge them monthly, quarterly, or annually. Some have minimum time commitments required. Make sure it is clear as to how they are billed and when they can expect a renewal fee.
Next, let’s talk about cancellations:
- If they want to cancel their membership, how much notice do they have to give prior to their next billing date?
- What do they need to do to cancel?
- Is it an email or something automated on your site?
- How long will they have access to the content? Is it through the current billing cycle or do they lose access immediately?
Get clear on the details about cancellations because this is an area that can cause disputes and complaints.
Now, let’s switch to refunds.
- Are refunds available after a charge is made?
- If not, make sure you are clear about that policy.
- If yes, what is the process to request a refund?
Next, the protection of your intellectual property is key. Similar to digital products and courses, it is important to include terms as to how a member can use your intellectual property. Often, membership sites will offer handouts, workbooks, videos, or live monthly courses. How can they use that content and what is prohibited?
And finally, in a membership, purchasers will likely have the ability to interact with other members. Have rules in place to deal with potential bad behavior and conflicts among members. Usually, I recommend reserving the right to remove a member for violating your policies so that you have the discretion to take action when needed.
These membership policies are often included directly in the terms so a purchaser is agreeing at the time they enroll. But, even though you had them check a box to agree, it’s usually wise to have them accessible within the group as a file, just in case there are questions or concerns about behavior.
Action Steps
This wraps up each of the four common types of eCommerce business, so now, let’s talk about the action items for today’s episode:
- Do an audit of your existing purchase policies. Do they reflect your current eCommerce offerings? If no, make necessary updates.
- If you don’t have purchase policies, determine what you want to include in your policies and work on a draft. As always, if you are not comfortable drafting these, get a template, or reach out to a lawyer.
- Make sure your purchase policies are easy to find and easy to read for your customers.
- Make sure you are asking your purchasers to agree with your terms and any applicable policies at the time they are making a purchase.
- If you see ongoing customer complaints or disputes, check your policies to see if there is something you can update to address these concerns.
Thanks so much for joining me today to talk about how to protect your eCommerce business through your website policies.
I’d love to connect with you outside of the show. Visit Businessese at businessese.com. To find show notes for today’s episode, visit businessese.com/podcast.
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If you have any questions, you can reach out via email at: questions@businessese.com.
