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With the increasing convenience that the Internet brings to commercial dealings, you can potentially reach more customers, both new and old, through selling your services online. This process can manifest in different ways, as you can:

  • offer your services entirely through a digital medium; 
  • allow booking and contracting to happen online; or
  • facilitate payment through an online portal.

However you decide to sell your services online, you need to make sure you do so legally. Depending on how you operate and who you sell to, you will have various legal obligations you need to meet. Therefore, this article will go through five things to consider when selling your services online.

1. Are You Selling to Consumers?

In any kind of trade, whether online or in-person, your legal obligations will vary depending on who you sell your services to. Consequently, if you sell to consumers, you will have legal requirements under consumer law to protect their rights. Consumers are people that buy goods or services for their everyday personal use. 

For example, if you offer an online nutritional consulting service over Zoom for people wanting to improve their health, your customers are consumers.

Businesses can be consumers too, if they are buying your services for domestic use. However, if they use your services for a commercial purpose, then they are not consumers in that case. Commercial purposes can include:

  • resupply in trade; and
  • consuming or using for manufacture or production.

For example, if you run a repair business for factory machinery, your customers likely will not be consumers.

When selling your services online, you should determine what categories your customers fall into, as this will determine your legal responsibilities to those customers.

2. Meeting Your Consumer Guarantees

When you sell services to consumers, you need to uphold the consumer guarantees that apply. Under the Consumer Guarantees Act, these are minimum standards for your services that you need to meet. This law applies to a range of services, including:

  • insurance contracts;
  • banking contracts;
  • contracts for performing work;
  • service or care of other people or animals; and
  • supply of telecommunications, gas, water, electricity, and wastewater removal.

Consumer guarantees can apply even if you do not have a specific contract for your service or you provide them at no cost.

Therefore, you need to ensure you know what these guarantees are and how you can meet them. According to the Consumer Guarantees Act, you need to carry out your service:

  • with reasonable skill and care;
  • in a way that is fit for the customer’s intended purpose;
  • within a reasonable timeframe where you have not specified a time; and
  • for a reasonable price where you have not specified a price.

The exact parameters of how these requirements play out will depend on what kind of service you provide and the industry standard.

If your service is substandard and does not meet these requirements, your customers can request a:

  • refund;
  • repair; or
  • replacement.

Note that if a customer was unclear with their instructions, or did not take your advice when deciding what they wanted, then you may not have to provide them with a remedy, depending on the circumstances. However, you still need to have carried out your work with reasonable care and skill.

3. Keeping Your Promotion and Advertising Straightforward

When you offer services online, you will rely a lot on advertising and marketing to get your business out there and gain new customers. You usually cannot rely on product imaging or depictions as an online store selling goods would, so you have to focus on the quality of your work and what it can bring your customers. 

However you decide to advertise, you should not:

  • overly rely on fine print for your disclaimers;
  • mislead or deceive your customers;
  • engage in unfair sales practices, such as bait advertising;
  • use unfair contract terms;
  • make claims about your services that you cannot back up with facts or evidence; or
  • offer services that you do not actually provide.

You should make it clear to customers that you are in trade, so that they know that they can rely on their consumer rights when buying your services.

4. Licences and Regulations

Depending on the kind of service you provide, there may be industry-specific licences or regulations that you need to abide by. These will vary according to sector and may have additional rules for contracting online as well.

For example, if you offer financial services, you may need to register as a financial service provider and meet other requirements.

Before you start to sell online, ensure that you have the necessary licences and have met the necessary regulations to avoid issues in the future.

5. Privacy

As a part of operating online, you will be collecting your customers’ personal information as they engage with your website or online portal for selling your services. You may do this differently than you would when operating offline, so it is vital to re-evaluate your data processes to ensure you protect your customers’ privacy. Otherwise, you run the risk of fines under the Privacy Act.

Key Takeaways

Selling your services online can be a convenient way to reach your customers and gain access to a new market. However, you need to do so in a way that translates to running your business efficiently and still complies with your legal obligations. If you would like more information or help with selling your services online, contact LegalVision’s eCommerce lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What are consumer guarantees?

Consumer guarantees are a minimum standard for goods and services that consumer law requires. If your service business sells to consumers, then your services need to meet these standards.

What is the best platform for selling services online?

The best platform for selling services will vary depending on what you want to provide. In some cases, operating from your own website may be of more benefit. In others, running from social media like Instagram or Facebook may be better. You can also run from multiple platforms.

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