Terms and conditions are a set of detailed terms that customers must agree to before they purchase a product and must be displayed on all online stores providing goods and services. They allow for clarity and prevent customer confusion as to their rights and liabilities in an online transaction. An eCommerce business owner may include a variety of terms and conditions including terms regarding copyright and privacy. However, the Australian Consumer Law (ACL) has additional terms that are mandatory in all terms and conditions regardless of whether it is an online business or not. This article will outline mandatory terms and conditions required by the ACL and a few terms that are commonly included at the discretion of the business owner.
The ACL requires that all Australian business owners, including eCommerce websites, display terms and conditions of the sale to consumers. This law also provides mandatory terms for all terms and conditions. If a business owner fails to include terms and conditions that satisfies the legislation’s requirements, they will be subject to checks and potentially receive penalties from the Australian Competition and Consumer Commission (ACCC).
ACL Compliance Statement
The ACL requires that terms and conditions include a statement that the eCommerce business complies with the ACL.
Guarantees and Warranties
The ACL provides customers with several rights and guarantees that cannot be excluded in a business’s terms and conditions. The most important ones being that the product :
- Is of an acceptable quality,
- Is for a particular purpose disclosed by the customer to the business owner,
- Matches any samples provided by the business owner.
If an eCommerce business fails to satisfy these guarantees, the customer of the product with the damage or inconsistency will have rights to receive a refund, repair the product or obtain a replacement.
The business owner may also decide to provide additional warranties outside of the ACL such as providing customers with a lifetime guarantee regarding the quality of the product. If a seller does elect to include additional warranties, they must clearly write the term and specifically outline the customer’s rights. This is required by the ACL and a business owner may receive penalties if they fail to do this. Additional warranties should explain what issues it covers, the length of time the warranty is valid for and any requirements a customer must satisfy in order to be protected under the warranty.
Responses to refunds, repairs, and replacement
Under the ACL, a customer has rights to repair, replace or refund any product where the eCommerce business fails to satisfy the consumer guarantees under the legislation.
Terms and conditions cannot include a statement prohibiting returns such as a simple ‘no refunds’ policy. All eCommerce business owners must detail their return policy in their terms and conditions. It is important to specify in which circumstances refunds will be provided to minimise confusion for customers. These circumstances may include when the customer requests a refund within a time period or where the seller has had an opportunity to fix the product.
Additionally, change of mind returns are also commonly requested by customers. However, the ACL does not provide change of mind returns as an essential requirement for terms and conditions. The seller has the option to include this kind of return in their terms and conditions, and may include additional requirements customers must satisfy related to this type of return. These may be providing proof of purchase or ensuring the product has been unused.
Along with the terms required by the ACL, it is recommended to include the following into any terms and conditions to enhance clarity and prevent potential customer confusion.
To facilitate the transaction for customers, sellers should detail the payment process in their eCommerce terms and conditions. As there are a range of third-party providers that are increasingly being relied upon by eCommerce business owners (such as PayPal and AfterPay), it is important to look into their policies. It is advised that business owners consult with these third-party providers as to how to incorporate their demands into the eCommerce business’s terms and conditions.
Terms and conditions detailing payment may also depend on the nature of the transaction between the customer and the seller. If a customer requests to have a custom item made for them by the seller, it may be more effective to include a term noticing customers may be requested to pay a deposit for these custom made items.
It is also recommended that terms and conditions include information regarding delivery and shipping. This is because issues with delivery have been a common source of stress and frustration for both customers and business owners. This can tarnish a business’s reputation as it may lead to bad online reviews and raise further hassle through refund requests. Information about delivery in a set of terms and conditions should specify:
- Regions/ countries where the business ships to,
- An estimate delivery time,
- Whether the business relies on third-party delivery providers,
- Who is liable over product damage or loss during transit,
- At what moment ownership of the product passes to the buyer.
These details may go further and specify the circumstances when the seller’s liability over product loss or damage ceases after delivery. These may include where the buyer requests to have the product left near the door where it then gets stolen or when the damage is caused by the customer.
A business owner may also include terms and conditions providing information on the following matters. Note this is not an exhaustive list
- Store credit,
- Gift vouchers,
- Dispute resolution,
- Cancellation policy,
- Information regarding any third-party involved in the transaction,
- Customer privacy
Not only is it important to draft eCommerce terms and conditions to adhere to the ACL, it is also necessary to ensure you incorporate any information that will cater to your business’s individual needs. Business owners should be vigilant that their terms and conditions are written in a detailed manner that clearly express their intentions. Otherwise, if the term is vague it may be deemed invalid. This will ensure compliance with the ACL and allow for customers to easily understand their rights in the transaction.
If you need assistance with an eCommerce terms and conditions get in touch with us via the contact form or by calling 1300 337 997.