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Here are 7 online business laws your e-commerce business needs to know today


Even businesses that conduct all their transactions online are not exempt from the law. With more companies looking to compete with giants like Amazon, there is a large retail market appearing on the Internet. The government is constantly enacting new laws and rules to adapt to the evolving environment.

Launching an online business might mean selling products exclusively on the Internet, or combining e-commerce with a brick-and-mortar shop.

When creating your e-commerce business, adhere to the rules before trouble finds you. Here are a few rules it might be easy to overlook.


When considering taxes the consumer has to pay, keep your target demographic in mind, along with their home country. Some countries charge tax as extra, while others include tax with the sale price. Various countries don’t charge tax at all when shopping online. Remember whom you’re selling to before setting up the store.

Meanwhile, you must pay your business taxes, as well. What you’re selling online and where you live could change how much you pay in taxes, or if you need to pay them at all. Look up the online tax laws of your local community and decide where the base of your business should be, potentially saving a lot of money in the long run.

Trademarks and permits

Trademark, patent and copyright may be terms you’ll want to familiarize yourself with. A trademark is an identifier that distinguishes products from each other. Patents protect inventions for a temporary amount of time, while copyrights protect works of art such as writings or music. Depending on your product, you may need to apply for one or more of these. On the other hand, you’ll have to remember not to sell something with protected content, like a shirt displaying Marvel characters.

You may need a permit or license to sell some of your goods in specific areas. Food or medical equipment, for instance, will require proper paperwork. Also, you won’t be able to sell some products, like alcohol, to minors in various areas. Look up what you will need to sell your products to your demographic before the store opens for business.

Terms and Conditions

As a customer yourself, you may think the usual terms and conditions on every website are tedious. The terms and conditions exist to help you and the customer, so your business is going to need a set. Start off with contact information, products you sell and clarification of your identity to protect the consumers. Also mention your insurance, including liability limitations. Finally, you’ll want to be sure to detail your return policy, jurisdiction and delivery terms.

Terms and conditions aren’t something to look over or do improperly. Research before writing the set for your business. There are generators and templates available online, as well as resources to get you started. Speak to a lawyer before putting your terms and conditions into action. With the ever-changing landscape of the Internet, allow the professionals to review the law for you.


Customer service and reputation will be the biggest earnings for your business. A customer not getting what they paid for would be an unwanted scenario for both of you. Regulations exist on certain shipping products for everyone’s protection. Restricted shipping items include aerosol cans, alcohol, explosives, ammunition, perishables, animals and other products. Note that some products that are usually restricted may be allowed to ship for extra fees and paperwork.

Also, consider having promotions for free shipping after spending a certain amount to help revenue. Regardless, provide clear guidelines on your shipping policy to make customers aware. Be sure to check on shipping laws about your products and plan accordingly before transactions.

PCI compliance

The Payment Card Industry Data Security Standard, or PCI DSS, are rules for any business that carries out transactions using credit or debit cards. The basics of PCI DSS include having a secure checkout experience that doesn’t threaten the customer’s information. Don’t store personal information on anything, including recordings of conversations. You will have to destroy any record of consumer data.

If a payment brand like Visa or MasterCard discovered your business is not in compliance with PCI, there would be fines and repercussions, especially if a data breach occurred. Lawmakers enacted PCI to keep large businesses in line, but small businesses must adhere to the rules, too.


Assuming you don’t have a brick-and-mortar store, your inventory will have to go somewhere until you sell it. Running a business right out of your home means keeping products in your house or investing in a type of storage. A large inventory will need more room and maybe even a proper warehouse.

Some areas have prohibitions on stocking up on large amounts of certain goods. Check on your zoning codes, as well as your lease or deed, to find out if there is anything specific for your business. If your area prohibits warehousing, double-check before you get fined.

Payment options

A payment gateway is a service to conduct a transaction without using your business to do so. Programs like PayPal and Square are well-known payment gateways. However, some programs have restrictions on selling certain products and may be limiting.

Check different payment gateways available to you before settling. Make sure you can sell your current and future products through their service before starting your business. You don’t want to suddenly have to change your payment options or end up with surprise transaction fees.

The law and you

Businesses must adhere to the law to operate in the interest of everyone’s safety. Remember to do a lot of research before settling on specific terms for your business. If you aren’t sure about something, seek professional help through an attorney’s office. The last thing you want to do is get anything wrong and face the consequences. Once you’ve checked all your boxes on the legal side, you can finally focus on your business.

Nathan Sykes is the editor of Finding an Outlet, where he writes about the latest in technology and business. Be sure to follow Nathan on Twitter @nathansykestech.