By Nermeen Nabil Khear 
Running an e-commerce business is not easy. There are so many things to take care of, including inventory, orders, shipping, maintaining your website, promoting your activity, and the list could go on for a while!
However, many e-commerce owners overlook one thing: compliance with privacy laws. This is a big mistake because it could expose your website to legal risks and liabilities.
Don’t worry, we’ve got you covered!
In this simple 5-step guide, we explain the basics of legal compliance for online stores, so that you can continue doing business on the right side of the law.
Define Your Law of Reference
The first thing to do is to define your law of reference, that is, the law (or laws) that apply to you. This step will help you identify all the legal requirements you should comply with.
An e-commerce store may need to comply with multiple laws across different countries.
Generally, a good way to start is to ask yourself these two questions:
Where are you based?
Where are your users based?
Let’s say that you are based in California, but you sell your products all over the US and Europe.
The first law you must comply with is the California Consumer Privacy Act (CCPA). This is the law of the state you reside in. Then, you should also comply with the different US State Privacy Laws, and the European General Data Protection Regulation (GDPR), because these laws protect your users and you can’t ignore them.
Create Your Privacy Policy
Now it’s time to get things done! Let’s start with the essentials: you need a privacy policy.
A privacy policy is a document that outlines your data processing activities to your users. In simpler words, it explains how your website is collecting and processing data, and why you need this data in the first place. For example, an e-commerce site needs the data to ensure that purchases can be properly completed, among other things.
This document is a requirement under almost every international privacy law, so you must have it on your website and make it accessible from every page. A good practice is to add a link to your privacy policy in the footer of your website.
What Should You Write in Your Privacy Policy
Being a legal document, your privacy policy should be tailored to the activity of your e-commerce site. However, there are some elements that you can find in every privacy policy:
- Who is the website owner?
- What data is being collected and how?
- What is the legal basis for the collection? This point specifically relates to the EU GDPR.
- Why are you collecting the data? A few examples can be analytics, email marketing, shipping your products, etc.
- Which third parties have access to the information? Third parties can also access the data through third-party widgets, like social media buttons.
- Are you transferring the data abroad? If yes, what security measures are you taking to protect them?
- What are the users’ rights?
- How will you notify users when you update your privacy policy?
- What’s the effective date of the policy?
You can see how all these elements come together in this privacy policy template. Writing this document yourself is not easy if you don’t have legal expertise, but many online tools can help you with drafting a sound legal document.
Protect Your Business with Terms and Conditions
Another key document you need to have for your e-commerce business is the Terms and Conditions.
Terms and Conditions don’t refer to privacy laws, but they are mandatory if you run an e-commerce because they define the conditions of sale of your shop. In a T&C document, people buying from you can find all the information about shipping, withdrawals, cancellations, warranty, payment methods, and more.
Moreover, a Terms and Conditions document is essential to protect you and your business from potential liabilities.
Let’s imagine this scenario.
You sell small home appliances, and one of your customers buys a toaster from you. After a few days, the toaster stops working, the wire overheats and it ruins your customer’s kitchen countertop.
What to do now
You may need to replace the toaster if it’s still covered by warranty. But if you have a Limitation of Liability Clause in your Terms and Conditions – where you specify that you are not responsible for incidental damages caused by the items you sell – then you don’t need to worry about the damages to the countertop, too.
What Should You Write in Your Terms and Conditions
Like privacy policies, Terms and Conditions are legal documents to every extent, and they need to match your activity. Let’s take a look at some common elements you can find in T&C for online stores:
- Who you are and your business information.
- The description of the service you offer.
- Details on risks, liability, and disclaimers.
- Warranty or guarantee details.
- How to cancel or withdraw an order.
- Safety guidelines and how to use your products (if needed).
- Shipping and delivery terms.
- Usage rights (if relevant).
- Rules for using or buying (like age limits or location restrictions).
- Your refund, exchange, and cancellation policy.
- Payment methods you accept.
- Any other terms your clients should know about.
This Terms and Conditions template can give you an idea of how to structure your document.
Manage Cookies in the Right Way
Does your e-commerce site use cookies? The answer is: most likely, yes!
Today, every website uses cookies for different purposes. An e-commerce site might use technical cookies to keep the site up and running and provide a smoother experience for customers. For example, did you know that cookies are what allow you to save items in your shopping cart?
But there’s more.
In fact, cookies are also used for analytics or profiling purposes. If you own an e-commerce, you may want to know what your top-selling items are or what areas of your site can be improved. Or you may want to retarget users who visited your site with an ad campaign on Google or Facebook.
What you need to know is that cookies are regulated by specific rules, and you can’t use them as you like. Under many legislations, you need to obtain your users’ consent before installing cookies on their devices, and you need to give them an easy option to withdraw their consent.
Let’s see how you can do it in practice.
You Need a Cookie Policy…
A cookie policy is a document that explains why your website uses cookies and what kind of cookies you’re using. It can be a part of your privacy policy dedicated to cookies, or a standalone document.
… and a Cookie Banner
You’ve surely seen a cookie banner: it’s the notice that pops up the first time you visit a new website. If you’re using analytics or profiling cookies, you need one too!
A cookie banner allows you to collect consent from your visitors to use non-technical cookies. The elements of a cookie banner may vary depending on the legislation. For example, under the EU ePrivacy Directive, a cookie banner should contain:
- A short explanation of why your website is using cookies.
- A button to accept and one to reject cookies.
- A button to customize consent preferences.
- A link to your cookie policy.
It’s important that the cookie banner is one of the first elements to load on your website and that it’s hard to miss.
Block Cookies from Running Before Consent
Lastly, you must block cookie scripts from running before your visitors give their consent, or if they deny it.
This is an important step because you need to respect your visitors’ consent choices.
However, there are laws – like the California Consumer Privacy Act – that allow you to run cookies without consent, but you must always provide an easy way out. This is usually done through a specific link, called “Do Not Sell My Personal Information”, which you should show upon the user’s first visit to your website.
Record Clear Proof of Consent
This brings us to our final step.
If you run an e-commerce site, you may also promote your business through marketing activities such as email marketing, newsletters, special offers, etc.
Under the EU GDPR, all of these activities can only be carried out with the user’s explicit consent. For example, you can’t sign people up for your newsletter just because you have their email address – it has to be voluntary.
Since consent is a big deal under GDPR, you need to be able to prove that the consent you’ve collected is valid. That’s what a record of consent is for!
To be in line with GDPR requirements, proof of consent should include:
- Who gave the consent
- When and how consent was given
- What form or message was shown to them at the time
- What rules or policies applied
Doing this yourself can be challenging, but many online tools can automate the creation of a record of consent for your e-commerce, by connecting the record to your forms.
Conclusion
As you can see, legal compliance for your e-commerce business requires careful considerations, but it’s essential for the success of your activity.
Not complying with privacy laws can expose you to great risks, and it’s not worth it!
If you’re worried about doing all this by yourself, don’t be. Online, you can find many tools that can simplify compliance for your e-commerce – helping you draft your legal documents, or automating cookie and consent collection.
Learn more about dropshipping or e-commerce, explore DSers blog now.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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