There are over 12 million online stores, and that number is only increasing. If your business is one of them, it’s essential that you have a detailed but straightforward set of terms and conditions available on your website or app. They lay out the rules your clients need to follow and will help you avoid any legal disputes that might arise. The reality is that they’re essential for your business as well as your clients.
Here we’ll discuss what a terms and conditions agreement is, why it’s important, and what essential clauses you should include.
What is a terms and conditions agreement?
In a similar way to a service level agreement, terms and conditions act as a legal agreement between your company and the customer. It’s essentially a set of rules that the customer must follow, and it usually includes details about payment, delivery, returns, dispute resolutions, and more.
You may also see terms and conditions referred to as:
- General conditions
- Terms of use
- Terms of service
They should be readily available and accessible to your customers. It’s most common to find them in your webpage footer, and it’s also good practice to include a link to them during the checkout process.
Below is an example of how Zara displays its terms of use in its website footer:
Why have a terms and conditions agreement?
All customers should agree to abide by your terms and conditions when they use your website or make a purchase. Your terms and conditions agreement protects your business and will be vital if any problems or disputes arise between you and your customers.
The benefits of having a terms and conditions agreement include:
- Protection from online abuse
- Limiting liability
- Protecting intellectual property
- Minimizing disputes and conflicts
- Transparency between you and your customers
The best practice would be to include your terms and conditions in multiple places on your website to ensure customers can access it easily. You can also ask customers to check a box stating they agree to the terms before completing their purchase.
What should you include in your terms and conditions agreement?
Let’s delve deeper into what essential clauses you should include in your agreement.
Introduction clause/general terms
This clause introduces the terms and conditions and outlines what services you’re providing and who the agreement is between. You should set out how these conditions will apply to users of the service or buyers of a product and what they need to do to agree to them. For example, does the agreement apply to anyone browsing your website, or are they only effective when the customer makes a purchase?
Data protection/privacy and security
This clause should clearly state how customers’ personal data is used, stored, and protected. Most companies will have a separate privacy policy, so it’s a good idea to link directly to your policy in this section of your terms and conditions.
Prohibited use
This clause sets out what activities are forbidden in regard to your website and/or your products and services. These prohibited activities will vary depending on the type of eCommerce business you’re running but may forbid activities such as:
- Using products or services to carry out illegal activity
- Violating copyright law
- Posting abusive comments online
See below how IKEA sets out a list of prohibited activities and states what action will be taken if any customer breaches these terms.
Intellectual property rights/copyrights/trademarks
An important clause in your terms and conditions agreement is one which protects your content as your own. This includes your brand logo, slogans, images, product names, and so on.
You should outline your ownership of trademarked or copyrighted property as well as any unique aspects of your web page, such as software or design features. If you’ve spent time, energy, and money creating an outstanding eCommerce product page, you’ll want to protect it in some way. This clause should explicitly state what’s yours and how users may or may not use your property.
Product or promotional information
Depending on the type of eCommerce business you’re running, you may want to include a clause that details information about your product pages and/or promotions. For example, note how Walmart includes a clause about the accuracy of product listings and states that information may change at any time.
Many websites will include a clause stating that they can and will end any promotions or sales early and without notice.
Pricing and payments
Many companies have a link to terms and conditions in the checkout process. This is a good practice because you can ensure customers have agreed to them before completing their purchase.
Part of the agreement should include information on pricing and payment. For example, your agreement may state that payment must be made in full before items are dispatched. You may also set out the different payment methods you accept on your website and if any pay-later options are available.
Return and refund information
One of the most common questions customers have when shopping online is about returning products for a refund. With an average return rate of 16.5%, this is a necessary clause to include in your terms.
This clause should clearly state your company returns policy or even link to a separate policy if you have one. Include information on how long customers have to return an item and the acceptable reasons for returning it. Clearly state if customers will be fully refunded. If you also have a bricks-and-mortar store, you’ll want to include details on if and how customers can return online purchases in a store.
Shipping and delivery information
You should be transparent with your customers about your shipping and delivery policy. When customers make a purchase, they should understand how long delivery will take and how much it will cost.
You can list your different delivery options here. It would also be wise to state that once the order is dispatched and with the relevant courier, the delivery timeline may be out of your hands.
Limitation of liability
This is another clause for protecting your business. You should include that you’re not responsible for any damages your customer may incur after the transaction has taken place or as a result of purchasing from your website. This clause is very important to protect your business from legal action. You can also include here what you can’t be sued for.
Third-party links
Many eCommerce sites include external links to third-party websites. It’s beneficial to include a clause about them in your terms and conditions agreement. Simply put, you should make it clear that you don’t have control over the content on any third-party links and that they have been included only for the benefit of the customer's use.
Dispute resolution
Here, you’ll want to include how any disputes between you and your customers will be resolved. You should outline your dispute resolution process, including which laws or legal system the dispute will be governed by.
Company contact information
Finally, you’ll want to include your company contact information so that customers can contact you if required. Your clients will appreciate being able to contact you by email or live chat, but don’t forget about a phone number. It’s good to have a local business telephone number so clients from your target market can easily get in touch with you.
Your terms and conditions agreement
Whatever your eCommerce business is, you would be wise to include a comprehensive but straightforward terms and conditions agreement. Include the essential clauses outlined above, and regularly revisit your terms to ensure they are up-to-date and relevant.
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Grace Lau is the Director of Growth Content at Dialpad and AI-powered cloud communication platform for better and easier team collaboration using Dialpad toll-free numbers for business. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Here is her LinkedIn. |
Published February 21, 2023
