It’s the “death penalty” every seller wants to avoid: being sued. Here are three big mistakes that screamed out “sue me!” in our recent store review.
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Getting sued is like getting hit by a car: When it happens, it’s already too late.
Needless to say, the consequences are pretty damaging and go beyond just “losing money”. For some, it could mean having profit margins slashed, running a store at loss, and the typical consequence: Your business dying overnight.
Luckily, there are ways to stay compliant to avoid getting sued.
I want to show you how. But not just with a few tips; I’m going to show you real life examples from three of our subscribers stores: Scoops World Online, Doggo Trend and Kokosale.
Let’s first start with Scoops World Online.
Store #1: Scoops World Online
Scoops World Online is a store that sells iPhone cases, phone accessories and headphones.
At glance, you’d think Thomas’ store seems pretty “sue-friendly”. He’s even made four sales! If he’s making sales, what could be the problem?
When you take a closer look, you realise one thing written all over his products: COPYRIGHT! Thomas is selling products have all been produced illegally in China.
See this Mike Tyson phone cover? Copyright.
This picture of Bob Marley? Copyright.
Marvel heroes? Definitely copyright.
I know what you’re thinking though: “If this is copyright infringement, why are Chinese suppliers producing them?!”
Copyright and trademark infringement are rampant in China, because those laws are pretty much not enforced. Basically, it’s the norm to sell and produce illegal items in China.
Selling branded items like Marvel heroes isn’t entirely illegal though. In fact, you’ll find thousands of Amazon sellers selling these exact action figures – legally.
How? Because they bought it from a store. This store bought their figurines legally from the licensed, accredited distributor, who got them directly from the copyright holder’s manufacturer.
Because they acquired this legally from a distributor who had also gotten them legally from the copyright holder’s manufacturer, it means that it would be also legal for me to buy it.
And it’s perfectly legal to resell items, even if they feature copyright characters – as long as it comes from a legal source. Aliexpress suppliers almost never have permission to use big, famous copyrighted characters and images.
Store #2: Doggo Trend
As you can tell by the name, this store is all about dogs.
Again, from glance, Doggo Trend looks a pretty safe website. No copyright infringement, legal items, and overall a pretty decent site.
It wasn’t until I scrolled down, that I figured Heemin was missing a HUGE piece on his site: a REFUND POLICY.
Now here is the thing: I don’t believe a refund policy isn’t a legal requirement, at least not a legal requirement in the USA, but it is important for you as a merchant to have one.
Think about this: a customer orders a shirt from you. And it arrives, and it’s the wrong size. It’s too small for them.
So, they email you, and say hey – I ordered a shirt, but it came in the wrong size. Can I please get a refund and a new shirt please?
Now, not only is that a huge pain, but you’ll lose money if you do that. So, you write back to the customer and go sorry – we only do refunds and returns for faulty items.
But you see, this consumer is used to the ridiculously generous return policy that huge stores like Macy’s offer – which by the way is NOT standard in the eCommerce world for small sellers.
And so, they go “well, you didn’t specify that! There is no policy on the site! How was I supposed to know you wouldn’t let me return an item if it didn’t fit? Screw you! I’m going to PayPal!”
And so, they go to PayPal and they dispute your order. Although you’d probably win that case, the damage is still done. PayPal and credit card companies watch your seller metrics. How many refunds do you get? How many disputes do you get? IF it’s too many, you risk getting kicked off and frozen.
Store #3: Kokosale
Kokosale failed at one thing every customer needs to know: SHIPPING TIMES!
Even though shipping times DON’T matter, being up front and clear with shipping times to your customer will save you loads of hassle in the future. Which is why it was confusing to see no shipping time disclaimer!
Funnily enough though, a lot of people are concerned that it’ll impact their conversions. And so, they try to hide it, and not tell the customer about them.
But that’s not going to work. After a week with no item the customer is going to email you and be like hey what’s up – don’t have my item? Where is it?
And when you reply “oh shipping times are 2-3 weeks, just be patient” – they aren’t going to be patient. They’re going to go and file a dispute with PayPal for you not telling them.
And y’know what? Not warning them about the abnormally shipping times IS shady practice and PayPal will NOT be impressed – and they’ll probably win it.
So don’t be shady. Will being upfront about the shipping times impact your conversions? Yes, but it’s been tested – and it doesn’t impact them as much as you’d think.
So make sure you’re very upfront about them. Say it’ll take 2-3 weeks or, to be even more safe, 2-4 weeks.
Protecting yourself from getting sued is something most sellers should prioritise – yet many fail to. Use this store review to avoid making the same mistakes as these sellers.
And for extra tips on safeguarding yourself from getting sued, watch the video below.
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