If you’re looking to start an eCommerce website, you’re not alone. Many business owners have decided to sell their products and services through their eCommerce website. eCommerce sales accounted for nearly six percent of the entire global retail market in 2014 (around $1.316 trillion). Because of how many people shop online, there are many requirements that eCommerce websites have to meet in order to protect consumers. In the United States, the Federal Trade Commission (FTC) is the agency that regulates eCommerce activities. This is just one set of regulations that you’ll have to contend with. There is also the Payment Card Industry (PCI) Security Standards Council which provides security standards and regulations for the handling and storing of all of your customer’s financial data. You have to understand and meet these regulations in order to protect both your customers and your business. We’ve detailed out a few of the primary issues that a business owner should be conscious of when starting an eCommerce website.
How to Prepare For an eCommerce Website
Privacy is one of the biggest issues in the online world right now. This is especially a concern for eCommerce websites and their customers, since many websites collect and keep the personal information about their customers including the name, address, email address, financial information, etc. This information, if collected and kept, has to be protected according to state and federal laws.
Taxes are a complicated process that you have to include in your eCommerce website. The IRS wants their money and you have to ensure they get it. If you have a brick/mortar store alongside your online store, you have to make sure to collect a sales tax from customers on your eCommerce website. You are required by law to do this in the United States. But if your business is completely online, then a tax collection is NOT required. This is based off a 1992 (yes, 1992!) Supreme Court Decision. This ruling declared that states cannot require mail order businesses (and this has now been extended to online stores) to collect sales tax unless they have a physical presence.
But don’t get excited too quickly if you don’t have a physical store because your individual state might still count your eCommerce website as a physical store. Each state defines a physical presence differently and the best thing to do would be to contact a tax lawyer or your state’s revenue agency to make sure you have the correct information.
eCommerce website owners have some surprising things to think about as they set up their website. Advertising regulations and compliances must be followed by online retailers when they’re advertising online. These regulations are designed by the FTC to prevent unfair actions against consumers.
If you’re a small business, you may think that you don’t have to worry so much about this, however, if you conduct a lot of your advertising through email, then you should take a step back and reconsider. Online retailers needs to be familiar with federal advertising laws in order to ensure that their emails are compliant. Federal advertising laws are not the only laws an email marketer should be familiar with – there is also the CAN-SPAM Act (Controlling the Non-Solicited Pornography and Marketing Act) that was created in 2003 by the United States Congress. You wouldn’t think, based on the first part of the title, that this would have anything to do with your online retailer’s email marketing, but in fact, this act established requirements that must be followed by any email marketer. The fines for violating this act can be astronomical when added together since each email that violates the act is subject to penalties of up to sixteen thousand dollars. Some of the more important regulations that you need to include in your online email marketing include access to opting out of the email(s), identifying the email as an advertisement in the header, as well as the inclusion of the business’ postal address within the email. The other regulations are included in the link above.
This is one of the most stringent of e-commerce regulations. We mentioned PCI compliance earlier in this article, and, now we’ll explain why it’s so important. These standards are a must. When you’re storing, processing, and transmitting credit card information, you have to meet the PCI Data Security Standard (DSS).
The PCI Security Standards Council is the organization that is responsible of developing and implementing of security standards for account data protection. This organization was founded by JCB International, Visa, Mastercard, amongst many other reputable financial institutions in order to make sure consumers were protected from credit card fraud. Through its standards, they seek to advance payment data security for all consumers. These standards include initiatives like including a firewall between a wireless network and the cardholder data environment, using a network intrusion detection system, etc. This website offers a lot of information as to how to comply with these standards and requirements.
However, meeting these standards can be hard for a small business owner, since it’s a difficult and time-consuming process. Small business owners can outsource the process of becoming PCI compliant to a third party in order to ensure that your business meets PCI regulations.
At digiTech Web Design, we can help you manage your eCommerce website and meet PCI regulations. We aim to make your customers feel safe and secure when using your eCommerce website. Please contact us today if you’d like to know more.