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If you are running an online store, it is important to have terms and conditions for your customers who wish to purchase from you. Terms and conditions contain an array of information that can protect both your business and your consumer. This article will detail:

  • key terms that you should include in your business’ terms and conditions; and
  • how your customers should go about finding and accepting these terms and conditions.

Payment

There is now a wide range of third-party payment providers that your online store can use to receive your customers’ payments. These include providers such as Paypal, VISA or American Express.

What information you should include in your terms and conditions will vary between providers. It is best practice to seek guidance from the provider you choose for your store regarding the information you should include in your terms and conditions.

For example, some providers, such as American Express, may wish to charge an additional fee or surcharge to your customer’s credit card, on top of the cost of their order. You should acknowledge this additional fee in your business’ terms and conditions.

Delivery 

There are three issues in regards to delivery that you should acknowledge in your business’ terms and conditions.

1. Who Is Responsible for Delivering the Goods?

You should outline whether you deliver the goods yourself to your customers, or if you use a third-party service, such as a courier. 

If you wish to deliver the goods yourself, you will be responsible for any damage during the delivery process. However, you will not be held responsible for any issues that occur to your customer’s order during transit by a third-party delivery service.

Check the online terms to see if the supplier is responsible for the delivery. Your business’ terms and conditions should clearly specify if you are using a third-party service. This will influence whether your customer is entitled to a return or refund, should your product arrive damaged due to complications in the shipping process. 

2. The Time Allocated for Delivery

It is also useful to set an expected length of time that each delivery will take. This delivery timeline should take into account a wide range of factors, such as:

  • the destination;
  • the size of the product; and
  • the amount of demand your store is experiencing

If you are responsible for delivering orders, you are obliged to deliver these goods:

  • within the period specified in your terms and conditions; or
  • (if you do not set a fixed time) in a reasonable length of time. 

If an order is delayed or delivered outside of a reasonable period, your customers are entitled to request a refund or some other remedy. 

3. The Method of Changing the Delivery Address

It is not uncommon for your customers to make an error when placing an online order or filling in their personal information. Errors are common. They may send their order to an old address or type ‘street’ instead of ‘road’. 

As such mistakes occur, it is useful to incorporate a procedure that your customers can follow to change the delivery address after they place an order. You should consider specifying:

  • how a customer can change their delivery address; and
  • when they must make these changes. For example, a customer may only change an address five days after the order has been placed, or before it has been dispatched. 

Returns, Refunds and Replacements

Your online store is obligated to provide goods of acceptable quality. Acceptable quality is:

  • fit for all of the purposes that the goods were specified to have;
  • acceptable in both appearance and finish;
  • free from any minor defects; 
  • safe; and
  • durable. 

If your goods do not meet this standard of quality, your customer is entitled to:

  • have the goods repaired;
  • have the order replaced with goods of acceptable quality; or
  • a refund of any money spent on the order. 

Your terms and conditions should clearly outline the procedure a customer should follow, should they be entitled to a return, refund or replacement.

However, if a customer’s order is of acceptable quality, you are not obligated to have a general returns policy. If you do wish to include a general returns policy, you will need to specify the process for acquiring a refund or replacement. To issue a refund or replacement, your business may require:

  • the goods to be unused;
  • the goods to still be in its packaging or have its tag intact; 
  • the return to occur in a certain period after purchase; or
  • a proof of the purchase, such as a receipt. 

Guarantees

There are certain guarantees that all New Zealand suppliers are subject to follow. You should outline these guarantees in your terms and conditions. These guarantees include:

  • the good is fit for its particular purpose; 
  • the good complies with its description; and 
  • that your consumer is not obligated to pay more than a reasonable price for the goods.

It is crucial that your store’s terms and conditions comply with these guarantees. If your store has a condition that infringes one of these guarantees, that term can be deemed to be unfair and thus unenforceable.

How Can Customers View and Accept the Terms and Conditions?

There are two common methods that online stores use to incorporate terms and conditions into their websites. These are:

  • click wrap; and
  • browse wrap.

Click Wrap

The click wrap method is when an online store sets out the terms and conditions within the transaction process. 

Before checking out their cart or order, a customer must ‘click’ a box or phrase, such as ‘I agree to these terms and conditions’, to proceed with their order. This ‘click’ is taken as the customer assenting to the store’s terms and conditions, even if they have not read them. Under the click wrap method, customers cannot proceed with their purchase until they have checked this box. 

It is best practice to ask your website developer to include a click wrap method when building your website. Doing so will ensure that your customers actively assent to your terms and conditions before purchasing from your store.

Browse Wrap 

In browse wrap, the customer is not actively shown the terms and conditions, nor do they specifically agree to them. Instead, the terms and conditions will be available under the ‘terms and conditions’ or ‘about us’ tab on the store’s website. 

These terms and conditions will contain a statement that outlines that all users or customers agree to these terms merely by using the online store. 

As the browse wrap method does not require your customers to assent to, or view, your store’s conditions, it could result in customers disputing terms on the basis that they did not agree to them. To avoid such disputes, it is best practice to use the click wrap method when building the website for your online store.

Key Takeaways

As an online store, it is crucial that you have clear and well-written terms and conditions. Doing so will avoid misunderstandings with customers and ensure that you meet your legal obligations as a supplier of goods. You should also ensure that your customers agree to these terms before they complete an order, by using the click wrap method.

When you are drafting your business’ terms and conditions, you should include provisions on the:

  • payment method;
  • delivery process; 
  • refund and returns policy; and 
  • guarantees that your store is subject to. 

If you need assistance in drafting your online store’ terms and conditions, contact LegalVision’s contract lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What are website terms and conditions?

A website’s terms and conditions act as a contract between the website and its users. This agreement will contain guidelines that users must agree to in order to use that site.

How do you write terms and conditions for an online store?

As the terms and conditions of an online store are a contract, it is best practice to consult a legal professional when writing these terms for your online store.

Do you need terms and conditions for an online store?

Although there is no legal requirement to have terms and conditions for your online store, it is encouraged to have terms regardless.

What terms should I include in my online store‘s terms and conditions?

Some of the key terms that you should include in your online store’s terms and conditions are: the payment method; delivery method; refunds; returns; and guarantees.
Other terms, such as a privacy policy or a provision on intellectual property, may be necessary, but this will depend on your store and website contents.

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