Refund Policy: When Should You Give Customer Refunds And Accept Returns?

By | Business Contracts, Business Lawyer | No Comments

refund policy for customer returnsThere’s a lot of confusion on what type of refund policy, if any, business owners should have. And there’s no single one-size-fits-all answer to that question either.

Business-To-Business (B2B)

As a practical matter, a “no refunds” policy is typically okay from a legal standpoint if it is a B2B transaction. Of course, you’d want to make it clear to the business customer prior to purchase that all sales are final and there are no refunds.

However, if that’s not the norm in your industry, you may be at a competitive disadvantage by having a no-refunds policy. It’s more a question of testing the market than a legal one in the B2B arena.

Business-To-Consumer (B2C) Refund Policy

It gets a lot more complicated if it’s a consumer purchasing your products or services.

Retail Shops

If you’ve got a brick-and-mortar retail store, the first thing you’ll want to do is see if your state has a specific law covering refunds and product returns. Some states not only have specific refund and returns policies protecting consumers but they also require you to post that policy by the cash register and/or put the policy on the customer’s receipt.

For certain large purchases (e.g. car purchases, gym memberships, etc.), there’s a federal “cooling off” rule and some states have similar laws. The most popular version of this is a 3-day cooling off period where the consumer has a right to cancel the purchase within 3 business days of signing the contract.

Online B2C Businesses

If you’re selling products or services online to consumers, there’s a risk that a government agency in another state will attempt to apply its laws to the purchase to protect consumers who bought from you in that state. And with 50 states in the U.S. alone (plus Washington, D.C.), that’s a lot of laws, rules, and regulations to figure out.

As a general rule of thumb, however, you can reduce your legal risks online by making it clear that the laws of your state apply to the transaction (including dispute resolution) and U.S. federal law too. Then have a website refund and returns policy that reflects federal and your state’s laws for returns and refunds, including any cooling off period right to cancel.

Marketing Reasons For A Generous Refund Policy

Note that this discussion of refund and returns policies focuses on the legal requirements for B2B and B2C transactions.

Yet there may be marketing reasons why it makes sense to offer a generous refund and returns policy even if not legally required to do so.

For example, you may have higher sales conversions without increased demands for a refund if there’s a 30, 60, 90+ day refund policy that partially reverses risk. And, of course, the person who promptly receives a refund is less likely to smear your business online by posting negative reviews that are nearly impossible to get taken down.

An experienced business lawyer can draft a refund and returns policy that’s right for your business while taking into account your marketing and online reputation concerns.

Email Marketing: How To Avoid Becoming A Mail Chump

By | Internet Lawyer | No Comments

mailchimp email marketingIf you have an email marketing list, you’ll want to protect that asset by regularly making backup copies.

Why is this important? Data loss and deplatforming.

Data Loss

Something can happen to your email autoresponder service. For example, I once had a client who failed to back up his lists. There was a server crash. And he lost a list of 325,000. What had been generating a very nice income for the client was gone in a flash. And under the terms of his agreement with his email service provider, they weren’t liable for his loss.

Deplatforming

email marketing complaintA more recent trend is social justice warriors (SJWs) waging war by deplatforming those they disagree with on any issue. Typically this involves attempts to get the person’s social media accounts (e.g. Twitter and Facebook) banned for allegedly being racist, sexist, transphobic, etc.

The employee activists at these social media companies will often violate their own terms of service to arbitrarily implement a ban based on prejudged guilt because of the SJW’s accusation.

This deplatforming has now spread to email marketing service providers.

For example, yesterday a so-called “woke” individual tweeted a complaint to Mailchimp about a twitter user she accused of being racist, etc.

In response, Mailchimp promptly terminated the accused’s email marketing account.

Whether or not you believe the marketer deserved to have his account terminated because of his beliefs, the moral of the story is that you need to back up your lists because it could happen to you someday. If there’s a lesson to be learned online about disagreements, it’s that popular opinion today on an issue can make you a pariah six months from now.

Email Marketing Precautions

Before you sign up for an autoresponder service, be sure to read the provider’s terms of service so that you understand what the company’s official policy is on the content you send to your lists.

Make sure you have those regular list backups made so that you can port to another autoresponder service if there’s a server data loss or your account is terminated.

And be sure to comply with applicable email marketing laws. I cover many of these legal risks — and how to avoid them — in my book “Email Marketing: How To Protect Your Business When Selling By Email.”

Recommended Email Service Providers

At the present time, I can no longer recommend Mailchimp because of their complicity in deplatforming email marketers based on views.

Many of my clients use either ActiveCampaign or AWeber for their email marketing. I’ve used AWeber for the past dozen years to handle the firm’s lists and I’m an affiliate for the company. I highly recommend AWeber for simplicity and legal compliance reasons.

 

Website Membership Contract: Do You Need One On Your Site?

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

website membership contractThere’s a lot of confusion as to whether a website membership contract is necessary. Many online businesses mistakenly think that the site’s terms of use (a.k.a. terms of service) provides enough protection when selling online memberships (sometimes referred to as a subscription or continuity program).

Yet, as part of your website legal documents, it’s important to have a separate membership agreement in these instances to protect  intellectual property and other legal rights. A good contract will reduce lawsuits and the likelihood you’ll get into trouble with the FTC or another government agency.

This membership contract spells out exactly what the buyer is getting with the purchase (e.g. a license to use X), what happens when membership ends, and many other important key terms that are unique to the membership itself (as opposed to all website visitors).

In addition, a good online membership agreement will address what will happen if there’s a conflict between the terms and conditions of the agreement and your site’s general terms of use and refund policy.

A skilled Internet business lawyer can draft a custom website membership contract that’s specifically designed to protect you and your venture.

App Development Agreement – Scope Of Work

By | Software Agreements, Software Lawyer | No Comments

Just reviewed an app development agreement with a scope of work that stated, “to be agreed to by the parties.”

Other than a general description in the opening paragraph of the contract, there was nothing that gave a clue what exactly was being developed.

This is an agreement to agree…and when it comes time to perform, there will plenty of disagreement between the developer and the client.

Take time on the front end with your software lawyer to get a software development contract prepared correctly to protect you. Otherwise, it’s a recipe for a failed project and lawsuits.

Texas Personal Trainer Insurance And Gym Owners

By | Business Contracts, Business Lawyer | No Comments

Texas Personal Trainer Insurance And Gym OwnersMany Lone Star State gym owners leave themselves needlessly exposed to lawsuits because of personal trainers who contract to provide fitness training to gym members and guests. If someone gets seriously injured or dies during training, there will be a lawsuit. The simple solution is to have the instructor’s independent contractor agreement with the gym require Texas personal trainer insurance.

What Type Of Insurance Should A Personal Trainer Be Required To Carry?

At a minimum, the fitness instructor should have a commercial general liability insurance policy. If the trainer has a vehicle that’s used on the gym’s premises (e.g. fitness center parking lot), there should also be commercial automobile liability insurance.

The Texas Gym Owner As An Additional Insured

It’s not enough for the personal trainer to have such insurance. The policies must also name the gym owner as an additional insured.

Why?

Because if a gym member is injured while receiving personal trainer services, it’s highly likely the gym will be named as either the sole defendant or a co-defendant in the subsequent civil lawsuit for damages.

Proof Of Texas Personal Trainer Insurance

The personal trainer’s contract with the gym should require the instructor to provide proof of such insurance naming the Texas fitness center owner as an additional insured before the trainer can provide services to gym members and guests.

Is this redundant if the gym already carries its own general liability and auto insurance?

No. At a minimum, it’s an extra pocket for a plaintiff to tap for compensation if there’s been an injury or death on your gym’s premises. And the trainer’s policies may be able to cover any gaps in your gym’s insurance that you didn’t even know existed.

An experienced Texas business contracts lawyer can ensure that these insurance issues, Texas Health Spa Act compliance, biometrics privacy issues, and other legal risks are addressed in your gym’s contracts, waivers, and other legal documents.