Top Legal Tips for Online Retailers

Summary

• UK online retailers must comply with legal obligations covering data protection, advertising standards, and website documentation to protect their business and customers.
• Failing to meet these requirements can result in significant fines, reputational damage, and legal disputes with other businesses or consumers.
• Key areas of compliance include influencer marketing agreements, original website policies, refunds procedures, and cybersecurity measures under the GDPR and Data Protection Act.
• This article is a plain-English guide for UK online business owners on their core legal obligations in e-commerce, covering advertising, data protection, and consumer rights.
• The content has been produced by LegalVision, a commercial law firm that specialises in advising clients on e-commerce and online business law.

Tips for Businesses

Use a solicitor to draft your website policies rather than copying them from other sites. Ensure your refunds policy is clear and legally sound. Implement strong cybersecurity measures to avoid ICO fines. Any influencer marketing arrangements should be governed by a written agreement that complies with Advertising Standards Authority rules.

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On this page

• How are UK Online Retailers Performing?
• 1. Consider Influencer Marketing
• 2. Avoid Copying Documents From Other Websites
• 3. Have a Reasonable Refunds Policy
• 4. Utilise Good Cyber Intrusion Measures
• Key Takeaways
• Frequently Asked Questions

Running a legal and compliant online store is one of the most important foundations for long-term eCommerce success. Get it wrong, and you risk fines, reputational damage, and lost customer trust. This article will consider some helpful tips for UK online stores so that you can avoid common legal pitfalls.

How are UK Online Retailers Performing?

In recent times, UK online retailers have experienced a rollercoaster of high and low demand and supply issues. A prominent example is during the COVID-19 pandemic, which increased demand for some products while removing the need for others. Similarly, consider the supply issues resulting from Brexit and various lockdowns.

Many UK online retailers pay particular attention to gifting events, such as Black Friday, Cyber Monday, Christmas and Easter, to offload goods and obtain new customers. However, in doing so, many UK businesses are limiting discounts (with many limiting sales of most items to around 15%).

It has never been more critical for online marketplaces and retailers to focus on their bottom line and customer retention. Accordingly, the following legal tips should help your online shop avoid legal pitfalls and focus on other matters.

1. Consider Influencer Marketing

One of the first rules of business is the need to get a product in the eye line of consumers. It is no good having a fantastic website and product lineup if no one visits it. In this way, influencer marketing can benefit UK online retailers. An influencer is an individual who is well-known on social media and can post advertisements for you on their social media channels.  

The benefit of engaging an influencer to advertise your business is that you can ensure your products and website become known to a significant proportion of your target audience. So, for example, a website specialising in the sale of coffee pods would benefit from having an influencer coffee connoisseur with 5 million followers advertise their product. Many of their followers will likely enjoy coffee and consider purchasing the product online.

The use of an influencer can be a good idea because it is more targeted and focused than traditional advertising. Thankfully, under a well-drafted Influencer Agreement, influencer marketing complies with the Advertising Standards Authority’s rules.

2. Avoid Copying Documents From Other Websites

UK retailer websites require certain documents to be accessible to customers. These include privacy policies, acceptable use policies, and terms of service documents.

Having a lawyer draft these documents for your company from scratch is advisable to ensure that they fit your business structure and give you complete control over your website’s content.  

However, some business owners try to save money by copying documents from other companies’ websites. Unfortunately, this comes with several significant disadvantages, which can include the following:

• the other business threatening your company with legal action for copyright infringement and demanding financial compensation to avoid doing so;
• having policy wording that does not fit your business and does not enable your company to police its website effectively; and
• having documentation that may not be legally binding due to not fitting your company’s ethos or website structure.

3. Have a Reasonable Refunds Policy

Every online retailer has to factor refunds into its business plan. Given the recent squeeze on the cost of living, UK consumers are more likely to request refunds than ever before.  

A well-drafted refunds policy can help you manage consumer expectations and provide good customer service while keeping full refund numbers reasonable. It can also help attract new customers who enjoy the ability to return items for a change of mind.

Most online refund policies will detail some of the following:

• all situations in which your company will consider a full refund;
• whether your organisation offers free return shipping (for example, through the use of return labels);
• situations in which your organisation would offer a replacement or store credit instead;
• details of certain information needed to start the refund process (for example, photos or videos of the product in question and the alleged defect); and
• any situations in which your company would refuse to provide a refund or returns, such as the return of undergarments or products with an expiration date.

4. Utilise Good Cyber Intrusion Measures

UK online retailers must take practical steps to safeguard their e-commerce websites from unauthorised access and hacking attempts. The Information Commissioner’s Office (ICO) is quick to fine companies that suffer preventable cyber-attacks, as this likely breaches the GDPR and Data Protection Act. This is a significant threat given that the ICO can provide UK online retailers with fines of up to £17.5m.

In this way, your company should prioritise the following measures:

• the use of strong passwords for all systems connected to the internet;
• using a well-tested, encrypted online credit card payment system;
• storing customer personal information on secure servers and deleting financial information when no longer relevant;
• using effective anti-virus software and regularly testing your website for security vulnerabilities; and
• utilising software that guards against brute force attacks on your website.

Taking these measures is similar to a physical retail store utilising CCTV, security guards and strong locks for storage areas.

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Key Takeaways

Your online business must meet various legal requirements regarding data protection, advertising standards and digital marketing. Because of this, many business owners consult expert lawyers for assistance with key documentation and website planning.

LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced e-commerce lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.

Frequently Asked Questions