With retail insolvencies at a five-year high, brick-and-mortar retail businesses are now moving into online selling.
Many startups that might once have chosen to launch their business with a physical retail premises may now start with an online presence.
In addition to the usual commercial issues around usability, pricing, design and so on, there are also a number of legal issues which should be considered when selling goods or services over the internet with legal e-commerce.
In particular, SMES should be aware of the regulation surrounding consumer rights and data protection.
Consumer Laws and Consumer Rights for Legal E-Commerce
Any legal e-commerce retailer operating in the EU and selling to consumers will be subject to regulations relating to distance selling, including online selling. On June 13, the laws surrounding consumer rights became more detailed and prescriptive for legal e-commerce.
Under the new rules, certain specified information must be made available to the customer before they complete their purchase, including information about the consumer’s right to cancel the order within 14 days. In addition, much of the same information now needs to be sent to the customer again after the contract is concluded by email or hard copy.
Data Protection and Credit Card Data
If a retailer proposes to collect and process credit card payments directly, they would need to comply with the Payment Card Industry Data Security Standard (PCI-DSS) which includes security and encryption requirements for any business that stores, processes or transmits payment cardholder data. Compliance with these rules, which are generally imposed by global payment brands and participating organisations, will be difficult for most SMEs.