The European Union estimates that up to 60% of cross-border e-commerce transactions fail for one reason or another.
Yet, building trust and confidence online without face-to-face contact can be a daunting task for businesses. Customers also need to be sure that when they buy online they get what they pay for.
That's why consumer protection laws are so strong across developed online economies!
So, we've singled out ten top tips to turn online legal compliance burdens into commercial benefits and give you a competitive and collaborative edge when you are doing business online.
E-commerce tips and tricks
1. Comply with the Distance Selling rules
Customers need to know who you are and what you do - it builds trust and confidence. Under Distance Selling rules, you must make clear who you are by providing full contact details including an address and phone number. This is also good practice for building trust.
2. Offer 7 day return option
Under Distance Selling rules, you must accept goods for return within 7 working days. Why not make this a selling point?
3. Get your VAT registration right
You must be VAT registered if your annual sales exceed £60,000. If you're not VAT registered, you don't have to worry about charging VAT and it would actually be against the law to do so.
4. Understand tax on shipping
People often don't understand the finer points of VAT.
For instance, if your products are a mixture of VATable and non-VATable, then the VAT charged on shipping should be in proportion to the mixture of VATable and non-VATable goods. Make sure your ecommerce solution can handle all of the VAT rules.
5. Exempt EU business buyers from tax
If your customer is a non-UK business in the EU and is registered for VAT in their own country, they are allowed to quote their VAT registration number to you in order to be exempted from tax. If you can't accommodate this, those customers are likely to look elsewhere.
6. Charge the country VAT rate if you exceed the country VAT threshold
Not many people know this, but if your online store is wildly successful and you are starting to turn over serious bucks selling into other EU countries, you hit some additional regulations. If you exceed the individual VAT threshold for Germany, France, etc. then you should charge VAT at the appropriate country VAT rate when selling into that country, not the usual UK 20% rate.
7. Remember your jurisdiction
We're in the EU so we are bound by EU rules. It's not the same when handling US buyers. US states might want to charge tax on sales into their area, but it's their responsibility to levy this tax. You don't have to charge this "use tax" which is between the buyer and the state where they live. So as a UK business you can sell into the US tax free.
8. Allow for disabled visitors - it's the law!
Make sure that you comply with the disability laws. The key requirement is that you have to take "reasonable" steps to provide access to people with disabilities, and this includes your online store. One way of doing that is to make sure that all images have alternate text tags so visually impaired people can still navigate your site. After all, the UK disability sector is worth some £50 billion per year.
9. Privacy matters
You will need to notify the Information Commissioner that you are processing personal data. Don't fall into the trap of thinking that personal information about your customers and suppliers is simply business data. It's not!
Notification takes just a few hours of intense work and thought. We can always help you complete your notification for a small fee. Just ask!
10. Comply with the rules on sending email
You are only allowed to send direct email marketing to individuals who have agreed to receive it from you by directly opting in. It is not sufficient simply to provide an opt out.
However, if you obtained their details in the course of making a sale the rules are different. You are allowed to continue communicating with them provided there is a free method of opting out each time you send them an email. This can be by email.
Competitive and collaborative advantage
As a customer, who would you rather deal with? An online business that shows to the world that it complies with rules and regulations - or one that does not?
The answer is clear. So why not turn regulatory burdens into a benefit for your business? Tell the world that you are legal, decent, honest and true, and show what you've done to prove it.
For example, list all of the things that you have done under the heading "Legal Information" and provide appropriate links where necessary.
Remember that the law and compliance is not just the domain of lawyers. It concerns everyone across your organisation. Only those that understand your business will have sufficient ability to turn compliance burdens into competitive advantage.