Every E-Commerce Business Needs These 3 Policies

If you have an e-commerce site or are thinking about starting one, there are a thousand and one things to stay on top of.

As a smart business owner, you’ve already set your e-commerce business up with a formal business entity like an LLC, which will help keep your personal assets separate from the business’ liabilities, opened a bank account, and looked more qualified to potential customers by creating a website.

In the hustle and bustle of getting your e-commerce store up and running, many people often forget to take another important step to protecting their business and themselves. But not having these three documents could cause legal, economic and reputational headaches to your e-commerce business.

We’re talking about essential website documents for your visitors and customers.

All too often e-commerce businesses lack good, well-thought-out sets of website policies. To start, every website needs a Terms of Service, Privacy Policy and, if there are items for purchase through the website, a Returns & Refund Policy.

Generally, website policies explain what the business’ users can expect from the website, whether any personal information is collected, how the business uses any information collected, what the website’s users can and cannot do, and how to handle issues or returns if items are bought, among other things. But if you’re missing any of these policies, potential customers might not find you trustworthy enough and will try to find what you’re offering somewhere else.

Essentially, these three documents can establish a high level of trust and accountability with your website’s users. Generally, the more complex and more information the website has, the lengthier the website’s policies will need to be, as there are more aspects to take into account.


Terms of Service Policy
terms of serviceTerms of Service establishes the boundaries of your relationship with your users. It provides a guideline of what users can and cannot do, as well as what users can expect from your business. It’s also commonly referred to as terms of use or terms and conditions.

Depending on the type of website, the terms of service can range from a few simple disclaimers to full user agreements. Terms of service typically covers topics including user acceptance, user rights and responsibilities, ownership of user content, acceptable and unacceptable use of the website, opt-out information, account termination procedures, disclaimers and liability limitations.

Since each online business is unique, a complete terms of use policy will typically be tailored to the specific needs, concerns, and liabilities of that business. As you can probably guess, this means that you can’t simply copy an existing website’s terms of service – even from a competitor.


Privacy Policy
privacy-et-imgMost websites collect some form of information from users. Privacy policies explain what information a website collects and how it uses, stores, and protects that user information.

Website privacy policies usually cover topics like:

What information is collected
How collected information is used
How information is protected and stored
If cookies or other tracking software is used

As with the terms of service, having a clear, well-thought-out privacy policy is an important feature of well-run websites.


Returns & Refund Policy
returns_policyA returns & refund policy can be a key aspect in gaining your customers’ trust.

Remember, unlike with a brick-and-mortar business where customers can evaluate the individual behind the counter, e-commerce customers rarely meet the people behind the business and must look for other trust markers. Not to mention, since the customer cannot feel or try the product before purchasing, they want to know what to expect if they want or need to return the product.

Thus, a clear, simple returns and refund policy can be an instrumental tool in convincing customers to trust your website and closing the sale.

Good returns policies should include how long returns or exchanges are accepted, any limitations on returns or refunds, the process for returning or exchanging goods, and how to contact the business about returns, refunds or exchanges.


As you can see, there’s a lot that goes into a set of website policies, but by taking the time and effort to develop them can help your online business look professional, stand out from the crowd, and be protected in the event something goes wrong.

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