Posted on by Pedro Lima
How to create an online store (ecommerce) within the legality?
Are you thinking about creating an online store?
Creating an online store today is so easy and affordable that anyone can do it for free. However, we do not always have the time or knowledge to do so. That and the fact that, in many cases, they are delimited by certain cases and more complex which in certain cases can increase the investment to hundreds of thousands of euros. But the investment to create an online store can be quite expensive if, legally, you are not careful to comply with some essential rules in the business. Being a sector that represents billions in sales worldwide annually and with growth rates expected for the next 4 years (from 2020 to 2024) close to 10%, so we have many opportunities ahead and, of course, we have a sector that will be more and more regulated and controlled, for the good of all, thus trying to avoid fraud, scams and unfair competition. Simple to undo how, not showing the discount percentage or the price practiced prior to the promotion or balance, can lead to fines that amount to close to € 30,000. It is also prohibited to use designations such as “outlet”, “super price” or “opportunities” to designate promotions or sales. Opening an online store in Portugal, as well as in many other countries, namely within the EU, implies knowing and applying the current legislation and always keeping abreast of the most important changes, thus avoiding fines that can ruin the entire business. Whether it is the Food and Economic Security Authority (ASAE) or as Finance, or even other authorities, they can impose heavy fines on companies if an online store does not comply with the terms of the law.
In the case of ASAE, the authority carries out “planned inspection actions on sites that sell goods and provide services at a distance (online stores / e-commerce) to verify that they present the mandatory information for the online sale modality” and if comply with legislation on online sales. Therefore, compliance from the “zero moment” when the online store is exposed to the public is absolutely crucial, as agents are checking and testing daily. In addition to the specific legal requirements for ecommerce, there are rules transversal to any business, such as, for example, the billing regime. Sometimes these rules are easily overlooked or neglected in online stores, but despite the channel being digital, the sanctions are very real. In this case the fines can go up to 30 or 50 thousand euros, according to the law broken. It is absolutely crucial to prevent ecommerce projects from these penalties and, for this, we have compiled a set of mandatory information to be presented to the consumer on e-commerce websites. Use our checklist of mandatory information to include in online stores to validate that your online store is in compliance with the law and avoid fines from ASAE. In this article, we discuss the legal obligations of websites and online stores, in order to avoid common legal errors in ecommerce projects.
Identification and general information
The online store must present complete elements of identification of the company / seller, namely:
- Name or corporate name;
- Geographical address in which it is established and electronic address;
- Tax Identification Number.
Likewise, the designated alternative consumer dispute resolution (RAL) entity and the respective website must be presented.
It may also contain the address and telephone contacts of the same. If the company’s activity is subject to prior authorization, information must be presented regarding the entity that authorized the exercise of the activity.
Shipping and payments
Any geographical or other restrictions on delivery must be indicated, as well as the means of payment accepted. These restrictions must be indicated at the latest at the beginning of the ordering process.
Any additional costs must be indicated prior to the purchase of the products / services.
Returns and refunds
The consumer has the right to return the product (cancel the contract) for 14 days without incurring any costs. Except for personalized products, sealed audio or video recordings and sealed software, which the consumer has removed the tamper-proof seal after delivery. The refund (including delivery costs) must be made within 14 days using the same payment method used by the consumer. However, if the consumer requests a different delivery method, the online store is not obliged to refund any additional delivery costs.
Prices and price reductions (sales, promotions and sales) It is crucial to report discounts without breaking the law. The total price of the products, including taxes, taxes, transportation costs or other charges that exist must be presented before the consumer makes the purchase.
In price drops, it is necessary to present the following information:
- Sales modality (balances, promotions or settlement);
- Type of products;
- Reduction percentage;
- Start date and duration.
It is mandatory that price reductions fall into one of the following modalities:
- Balances –sale of products at a price lower than the lowest price previously practiced, in order to accelerate the flow of existing products;
- Promotions –sale promoted at a lower price or with more advantageous conditions, with a view to enhancing the sale of products or the launch of a product not previously sold, as well as the development of commercial activity, not carried out simultaneously with a sale on balances;
- Sale off –the sale of products of an exceptional nature intended for accelerated disposal with a reduction in the price of all or part of the establishment’s stocks, resulting from the occurrence of reasons that determine the interruption of the sale or activity in the establishment.
It is prohibited to use other expressions, even if they are similar, to advertise sales with reduced prices (eg “opportunities”).
Balances can be made at any time of the year, as long as they do not exceed 124 days per year (about four months).
The balances must be communicated to ASAE, at least five working days in advance, with the following information:
- Identification and address of the merchant or address of the establishment;
- Tax Identification Number;
- Indication of the start and end date of the balance period in question.
Promotions can be made at any time, but cannot run at the same time as sales.
The advertised price reduction percentage (-30%, -50%, etc.) must be in relation to the lowest price at which the product was sold in the 90 days prior to the day on which it is offered for sale on sale or on sale, with the exception of any balances and promotions that took place during that period.
The consumer must give prior consent for unsolicited communications to be sent to him.
The invoice must be issued immediately after paying for an online purchase.
The sending of invoices in digital format must meet several requirements, namely that of electronic signature.
It is necessary to inform Banco de Portugal of transactions with other countries (inflows and outflows) when they exceed one hundred thousand euros per year.
What are the relevant raws for e-commerce and online stores?
- DL n.º 24/2014 –contracts signed at a distance and outside the commercial establishment;
- DL n.º 70/2007 – commercial practices with price reduction;
- DL n.º 7/2004 – electronic commerce in the internal market and processing of personal data;
- Informative guide on rules and good practices in commercial communication in the digital environment;
- DL n.º 156/2005 – Complaint book;
- Law n.º 144/2015 –mechanisms for out-of-court settlement of consumer disputes;
- VAT code;
- DL n.º 198/2012 – issuing invoices;
- Regulation (EU) 2018/302 of the European Parliament and of the Council;
- General Data Protection Regulation (GDPR / GDPR)
- DL n.º 166/2013 – regime applicable to individual restrictive trade practices;
- Instrução n.º 27/2012 – communication of statistical information to Portugal Bank
- Law n.º 46/2012 – processing of personal data and protection of privacy in electronic communications.