Establishing Ecommerce Policies

Wednesday, September 16th, 2009
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When merchants create their first online store, they are often so fixated on uploading products and creating an aesthetically pleasing site that they forget to establish good policies. Although establishing policies doesn’t fall into the “fun” category, policies can protect the merchant and are a necessity. The following is a list of Policies that every merchant should have: Return Policy, Shipping Policy, Privacy Policy, and Security Policy. This article will discuss each policy in detail.

The Return Policy is one of the most important policies a merchant can construct. It will vary from business to business and may also depend upon industry and what your competitors are doing. Some merchants like to say all shipments are final- period. Others will allow for exchanges and store credits, while others might offer a complete money back guarantee. Whichever category your business falls into, the return policy should mention a time component. For example, if someone attempts to return a product that they purchased 6 months ago, you may be less willing to take the product back then if they bought it 1 week ago. You should also establish shipping costs and how they pertain to returns. Is it the customer’s responsibility to pay for shipping if they return something or is your company willing to eat that cost? Also, what condition must the product be in to be returned? Having a clearly defined shipping policy is extremely important and unfortunately something that every online merchant will fall back on at some point in time.

A good shipping policy should set expectations for the customer. The most commonly looked for element in a shipping policy is the time element – how long will it take to get the package(s). Although you can’t control the shipping carrier’s time in transit, you can give the customer a good idea of how long it will take you to get a package in the hands of a carrier. Also, if there are days that you don’t ship, specify them. Many companies that sell wine or perishables won’t ship on Thursday and Friday because they don’t want the packages sitting in the carrier’s truck over the weekend. Merchants should also mention whether or not they’ll ship to PO Boxes.

In today’s world it is extremely tough to keep your email address off of spam lists. Consequently, consumers are more cautious than ever about giving out their contact information. Most merchant’s don’t sell their customers information or use if for other purposes and they should have a privacy policy that says just that. There are consumers that will not order from you if they think you are going to sell or rent their contact information. It’s not safe to assume that your customers will think you will not keep their information private.

The final policy that every merchant should have is a security policy. This will likely be an internal only policy, but should set guidelines for employees that have access to the Order Management System. Among other things, there should be policies in place for:

1. Discontinuing access to the Order Management System once an employee is terminated.
2. Defining Access Levels to the Order Management System.
3. Rules for handling files that are exported from the Order Management System.
4. Criteria for establishing unique logins and passwords to the Order Management System.
5. Guidelines for using antivirus software. It’s extremely important that merchants never login to an Order Management System if their computer has a key-logging program running.
6. Rules for accessing the Order Management System from other computers.
7. Timelines for periodically changing passwords.

Although the thought of writing policies makes most people yawn, take a couple hours and review the policies that your company has in place. Are there things that should be changed or added? If you haven’t reviewed them in a while, chances are that it’s time to revisit them.

After receiving a degree in Industrial Engineering from Cal Poly San Luis Obispo, Alex began his career as a technology consultant with Accenture. In 1999 he left Accenture and founded Nexternal – a cloud-based eCommerce Platform company. Alex is passionate about eCommerce and online marketing. He is now a Senior Vice President of HighJump, managing the Nexternal business unit.

2 Comments

  1. Good article to remind that policies are 100 % part of customer promises and need to be precisely made and detailed on website so that customers will know exactly where they are going to.

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  2. I agree – Many ecom stores forget about the old PO box scenario …especially for naughty products. You do need to match your product with the buyers expectation for delivery. And make sure this information is clearly outlined in the checkout and shipping policy. Controlling your shipping policy from day 1 can help you save bundles of time by following the above best practices. you do have to watch yourselves are crooks will try every trick in the book for a quick buck. In regards to shipping policy its tricky wording shipping policies not to harm without protecting/ covering yourself. Trying to include the key protection elements such as ” re delivery fees” and ” damages ” are what we find are the hardest ones to try and blend in to not scare customers away. I am from down under and flat rates are a scary way of ecommerce shipping due to the distance of the remote buyers. Huge price fluctuations for our country towns ..and these are the guys buying ( due to no local stores ) A delecate balance none the less. Hey thanks for your shipping policy info John.

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