3 Reasons Why You Need Terms and Conditions and a Privacy Policy

I’ll never forget a client emailing me frantically about a disgruntled customer who was demanding a full refund on a $600 digital course. Luckily, my client had website terms and conditions (tailored to her business) that allowed her to get out of the situation unscathed and without having to pay a dime! Of course, this scenario isn’t anything unique in the world of online business, but it’s just one of the many reasons why having website terms and conditions (and a privacy policy) is so important.

While there are many reasons why you should have these terms and policies in place, below are a few high points on why legalizing your website with terms and conditions, and a compliant privacy policy is necessary to protect your business and bottom line.

1. Terms and Conditions Set Ground Rules

Terms and Conditions are where visitors to your website are informed of any special terms they’re agreeing to by using your website. These terms typically include things like:

  • Your payment processing systems and return policy;
  • Disclaimers – such as a disclaimer that you do not guarantee any particular result will be achieved from the use of your products or services;
  • Limitation of liability for things posted on your website;
  • How visitors can contact you if they have any questions; and
  • Establishing governing law in the event of a dispute

Each of these things is necessary to establish clear expectations with potential customers, limit your liability, and quickly extinguish any issues that may come up.

2. Terms and Conditions Protect Your Rights

Beyond establishing ground rules for your business, your terms and conditions also protect your rights to the content you publish on your website. This is of utmost importance if you’re publishing original content, such as blog posts, podcasts, music, or other creative works.

Your terms also allow you to put visitors on notice of any trademarks, copyrights, or patents you own and what actions will be taken if any of your content or brand marks are infringed upon. 

3. Privacy Policies are Legally Required

In addition to your website’s terms and conditions, it’s also imperative that you have a privacy policy in place, for one simple reason –

privacy policies are legally required.

Having a privacy policy ensures that you maintain compliance with federal and global regulations like the General Data Protection Regulation (GDPR) and the Federal Trade Commission (FTC) (which can issue fines up to $16k per violation).  It’s also important to note, that whether you’re selling products or services directly from your website or not, is irrelevant. You must have a privacy policy if you’re collecting information from consumers, even information that you may not realize your website is collecting for you.

The primary information that must be included in your privacy policy includes:

  • Notification to users when there are significant changes to your data collection and sharing processes;
  • Informing visitors of what personally identifiable information is being collected (such as name, email, address, credit card info, etc.), and what you will do with that information;
  • Informing visitors of what non-personally identifiable information is being collected, and how that information will be used (such as to enhance the experience of all visitors in the future); and
  • Whether information is being placed on the web site visitor’s computer (i.e. cookies).

General Data Protection Regulation (GDPR)

In May of last year, you undoubtedly received countless emails from companies informing you that their privacy policy had changed. This was to ensure compliance with the newly enacted GDPR, which requires a greater level of transparency regarding consumer information and consumer consent in signing-up for and participating in your offerings (including freebies!).

If you’re wondering whether the infamous GDPR applies to you, there’s a 99.9% chance it does…

This law applies to all companies processing the personal data of individuals residing in the European Union (EU), regardless of the company’s location. Additionally, it relates to all activities regarding goods or services, regardless of whether payment is required. So even if you’re just tracking the search behavior of these residents this law still applies! Meaning, your compliance with this law in your privacy policy is legally required.

I know dealing with the legalize of business can be overwhelming and difficult to manage, (reasons why it keeps getting pushed down your to-do list…), and that nothing may go wrong, but do you really want to risk it?

The cost of getting your affairs in order from the outset will always be less than settling a dispute in court or being hit with a month’s worth of revenue in fees. If you’re already using terms and conditions and a privacy policy, but aren’t sure if they’re legally up to code to protect you, take this 5-minute audit to see what may be missing!