What are the Legal Considerations for Setting Up a Shopify Business in England and Wales?

If you are thinking of setting up an e-commerce store using Shopify, it is important to consider whether you will be covered from a legal standpoint. After all, you do not want to set up a business only to find yourself in trouble. Indeed, you may risk collecting email addresses from potential customers in the wrong way. Another common issue is having a customer suddenly asking for a refund. This article will help you understand what rules you need to follow for your new Shopify business. It will also discuss what legal documents you need to have in place before you start.

What is Shopify?

Shopify is a popular e-commerce platform. It is an easy way to set up an online store to sell your business’ goods or services. Shopify provides:

• an online marketplace for your products;
• a way to manage inventory for physical goods;
• its own payment system (but facilitates other payment providers such as Paypal or Apple Pay); and
• different tools for shipping physical goods, including using a third-party service to prepare and ship your products on your behalf.  

It is important to note that, as with any service provider, you will also need to agree to Shopify’s terms of service. So, you should read these carefully to ensure that your e-commerce business plans will not conflict with Shopify’s terms.

Consumer Protection Considerations

Various laws cover the sales of goods and selling online to protect consumers’ rights in England and Wales. If you are intending to start a Shopify business selling to customers in England and Wales, you must abide by these laws. 

For example, imagine that a customer purchases goods on a credit card. If something goes wrong, like they did not receive the goods they purchased, they can put a claim in with their credit card provider to get the cost of the goods back. This is certainly desirable from a consumer’s point of view. However, as a business owner, you need to be aware that your customers would have this right, regardless of what your terms of sale say.

E-Commerce Rules

There are also various rules which apply specifically to online businesses in England and Wales. Again, you need to ensure you comply with these as a Shopify business selling to English and Welsh customers.  For instance, you must have a policy available on your website that shows your business’ contact details, including:

• a contact name;
• the registered address of your business;
• a postal address; and
• a contact email address.

Additionally, you must provide your goods’ prices and clear descriptions of everything offered for sale. Payment methods and delivery terms must also be obvious, and you should also acknowledge all orders in writing (email counts for this purpose).

By law, consumers also have an automatic right to cancel an order for most products and services worth £42 or less once they have placed an order, and they do not have to give you a reason for doing so. You must tell your customers they have this right. If you do so, the right lasts for 14 days. If you do not tell them, however, they have 12 months to cancel their order.

Data Protection Rules in England and Wales

Data Protection rules put obligations on you as a business owner. For example, if your Shopify business involves collecting personal information from visitors to your website, you must register as a data controller with the Information Commissioners Office (ICO). Generally speaking, anyone running a business is probably collecting personal information from customers. 

The definition of personal information includes any data about a living person that can identify them, whether on its own or in conjunction with other data. For example, if you are selling physical goods, you will be collecting the customer’s name, address and contact details. 

Moreover, the ICO fee for registering as a data controller depends on your business’ size and turnover. For instance, if you have less than 10 employees or your turnover was less than £632,000 in the last financial year, the fee is £40. You will also receive a £5 discount if you pay the fee by direct debit.

Another obligation under Data Protection is to tell your website visitors and customers what information you collect about them. You must also disclose how you use that information, together with information passed to third parties, such as a payment provider. You must also let your website visitors know about the cookies your website uses. 

Websites must also be General Data Protection Regulation (GDPR) compliant. Therefore, if you use email marketing, you must provide a way for people to explicitly opt-in or easily opt-out of your email list should they wish to. The good news is that Shopify contains inbuilt tools that you can use to help you be GDPR compliant.

What Other Policies Do I Need?

There are several other policies you should prepare before launching your Shopify website.

1. Privacy policy: in line with GDPR requirements, this should contain critical details about what personal data you collect and what you use it for, the rights users have over personal data you collect, and third parties your data is shared with. This includes your payment processor, any email marketing company you use, and Shopify itself.
2. Cookie policy: This would include information about the cookies you are using for your website and why you are using them, and explain to a website user how they can manage the cookies in their browser.
3. Terms of sale: this will cover all your provisions related to the goods or services you are selling. It is a good idea to cover information about returns and your customer’s right to cancel their order.

It is also worth noting that Shopify does have tools to help you draft some of the critical documents you need. However, you must agree that they have not given you any legal advice to use these. It is also worth noting that their premade documents are not suitable for your specific business needs. 

Key Takeaways

If you need help with preparing these necessary legal documents for your Shopify or other online business, our experienced e-commerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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