If you sell products on Etsy, a Terms of Purchase can help you clearly establish the rules that apply to your transactions with customers, including payment, shipping, returns, refunds, cancellations, and custom orders.
Etsy provides its own marketplace rules and shop policy tools, but those aren't necessarily a substitute for having your own terms for your business. A well-drafted Terms of Purchase can help you set expectations with customers and give you clear policies to refer back to when an issue comes up.
Even if your Etsy shop started as a hobby or side hustle, once you're making regular sales, it's worth treating it like a real business. That means thinking about the legal foundation of your shop, not just the products you're selling.
One of the best places to start? A Terms of Purchase Agreement.
And while that might sound like some legal jargon that you want to stay far away from, I promise it’s more simple than you might think.
Why Etsy Sellers Need a Terms of Purchase
A Terms of Purchase for Etsy sellers helps establish clear terms for transactions, including payment, shipping, returns, refunds, cancellations, custom orders, and disputes.
Etsy's own policies and marketplace rules still apply, but having your own terms gives your business a centralized place to explain what customers can expect when they buy from you.
What Is a Terms of Purchase Agreement?
The best way to think about a Terms of Purchase for your business is as a rulebook for a game.
It sets the ground rules and expectations for what happens when a customer purchases from your business, while giving you a clear framework to refer back to when questions or disputes come up.
Just like in a football game, when there’s a dispute, the referees refer back to the rulebook to help determine how the situation should be handled. The same goes for your business. If or when you run into a problem, you can refer back to your Terms of Purchase to help determine how you want to handle the situation.
You may have heard terms like "Terms and Conditions" or "Terms of Purchase" used when talking about business policies. While these documents can overlap, they aren't always the same thing. Terms of Purchase are specifically focused on the terms of a transaction, including what happens when someone buys your products.
Essentially, a Terms of Purchase Agreement outlines the specific terms of a transaction for either physical or digital products and covers policies that are a part of the purchase process, such as refunds, chargebacks or cancellations.
It can help establish clear expectations between you and your customer, although your terms still need to comply with applicable law and any platform rules that apply to your Etsy shop.
Are Etsy's Shop Policies Enough?
Short answer: They can be an important part of your Etsy shop, but they aren't necessarily a substitute for your own Terms of Purchase.
Etsy provides sellers with platform tools and policies that address certain aspects of selling through Etsy. Your own Terms of Purchase can go further by clearly explaining the terms that apply to your transactions, including payment expectations, custom orders, returns, refunds, cancellations, shipping, and what happens if a customer disputes a purchase.
Think of it this way: Etsy's rules govern your use of the Etsy marketplace, while your Terms of Purchase can help establish the terms of your transaction with your customer. Your terms should be consistent with Etsy's policies and applicable law, rather than attempting to override them.
5 Key Terms Every Etsy Seller Should Include in a Terms of Purchase
Now that you understand what a Terms of Purchase is, you might be wondering what needs to be included to make it as effective as possible.
At The Boutique Lawyer, we’ve crafted a “plug and play” Terms of Purchase that includes 30+ clauses, but for the purpose of this blog, we’re going to highlight 5 of the most important elements that you definitely don’t want to skip as an Etsy seller specifically!
Payment Terms
Whether you’re selling on Etsy or another platform, you want to make sure that your Terms of Purchase covers your payment terms.
In this clause, you’ll clearly outline how and when you expect to be paid, which can include accepted payment methods, deposits for custom orders, and payment timelines.
Having this information clearly defined for your customers allows you to eliminate any miscommunication and avoid any misunderstandings.
Shipping Policies
As an Etsy seller, you’re most likely shipping products to your customers and if so it’s important that you detail your shipping methods, timelines, and costs.
When it comes to shipping, your customers want one thing: transparency! With that in mind, make sure you provide realistic and honest shipping information up front so that your customers aren’t caught off guard if you run into any potential delays.
As someone that’s likely crafting handmade goods, you never know when you’re going to run out of supply, be hit with an influx of orders, or experience delays that are out of your control (we’re looking at you holiday season!), so get ahead of the fuss by having accurate shipping policies front and center.
(And P.S. – if you’re selling digital products on Etsy and aren’t concerned with shipping, you STILL need a Terms of Purchase Agreement. Here’s a Terms of Purchase Agreement for Digital Products.)
Return, Exchange, & Refund Policies
Like any business, you have to anticipate the possibility of return, exchange, or refund requests and as an Etsy seller, these requests can sometimes be tricky to navigate, especially if you’re selling items that are custom.
The best thing you can do for yourself is to go ahead and expect these requests and create a policy for each of them before they ever come up.
In your Terms of Purchase Agreement, specify under what conditions you accept returns or exchanges.
Additionally, outline your refund policy (or no refund policy 👀) so that there’s full clarity with your customers from the very beginning!
Custom Order Guidelines
As an Etsy seller, you may find yourself in a unique position of creating custom orders and if that’s the case it will be extra important for you to set super clear guidelines for your customers!
This can range from the design approval process, your working timeline, and revision limits.
Essentially, anything that you need to make your life easier when working with customers, make sure it’s outlined here!
If your "custom orders" involve substantial design work, consulting, or other services beyond simply creating a product, you may need a different or additional agreement to properly cover the relationship. A Terms of Purchase can be a great fit for product sales, but it isn't necessarily a replacement for a services agreement when you're actually providing services.
Dispute Resolution
Lastly, how will you handle disputes? Because if you can count on one thing as a business owner, disputes are one of them.
This can be things like returns or refunds as mentioned above or unhappy customers that aren’t pleased with their custom work.
While all of these things can feel like a nightmare as a business owner, it’s important to get ahead of these issues and have a clear policy that outlines the expectations for the customer, so that if or when the disputes pop up, you have clear terms you can refer back to when deciding how to respond.
Where Should Your Terms of Purchase Live?
Your Terms of Purchase should be easy for customers to find before they buy. Depending on your Etsy setup and the tools available to you, you may reference your terms through your shop policies, listing descriptions, FAQs, and other customer-facing communications.
The key is consistency. If your listing says "no returns," but another part of your shop suggests returns are accepted, you can create unnecessary confusion. Make sure the policies you communicate throughout your shop match the terms you're actually using for your business.
Think of your full Terms of Purchase as the master document, and your Etsy shop policies and listing information as places where you highlight the terms that are most relevant to a particular purchase.
How To Implement Terms of Purchase on Etsy
As mentioned earlier, Etsy might seem like a casual marketplace for those with hobbies and side hustles, but the truth of the matter is that it’s still very much a business platform and it needs to be treated like one!
With this in mind, there’s a few sections on Etsy that you want to pay close attention to when setting up your shop and adding new products:
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Etsy Shop Policies Section – this section can be dedicated to outlining the key policies of your shop and give customers an easy place to review important shop policies before purchasing from you.
One important note: simply having your terms somewhere in your shop isn't always the same as having a customer affirmatively agree to them. The best way to structure acceptance depends on how you're selling, what Etsy's platform allows, and the terms you're trying to enforce. At a minimum, make your key policies easy for customers to find and keep your terms consistent across your shop, listings, and checkout process.
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Item Descriptions – every item description area should be used to reiterate important terms related to the specific product, like custom order timelines or specific return restrictions for that item. A lot of this information can be copy and pasted from your master Terms of Purchase Agreement.
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Follow-Up Messages – Etsy makes it easy for you to set up automatic after purchase messages that can double as a personal touch to say “thanks!” but also to reiterate the most crucial points of your Terms of Purchase.
- FAQ Section – one of the first things that many customers look for is an FAQ section, so having a dedicated page or section for this makes it easy to display the most common questions that people have and give easy access to your terms (this is something we implement in the TBL shop too!)
Frequently Asked Questions About Etsy Terms of Purchase
Does Etsy provide a Terms of Purchase for sellers?
Etsy provides marketplace rules and tools for sellers to communicate certain shop policies, but Etsy's platform policies aren't necessarily a substitute for having your own Terms of Purchase for your business.
Do Etsy sellers need Terms of Purchase?
There isn't one universal rule that every Etsy seller must have a standalone Terms of Purchase. However, having clear terms can help sellers establish expectations around payment, shipping, returns, refunds, cancellations, custom orders, and other parts of the transaction.
Can I use the same Terms of Purchase for physical and digital Etsy products?
You can use a general Terms of Purchase as a foundation for both, but your terms should address the specific issues that apply to the products you're selling. Physical products may need shipping and delivery provisions, while digital products may need terms addressing digital delivery, downloads, and access.
Can I use Etsy's Shop Policies instead of a Terms of Purchase?
Etsy's Shop Policies can be an important part of communicating with customers, but they don't necessarily cover every term you may want to establish for your business. Your own Terms of Purchase can provide a more comprehensive framework for your transactions, while still needing to comply with Etsy's rules and applicable law.
What should an Etsy Terms of Purchase include?
Common provisions include payment terms, shipping and delivery, returns and exchanges, refunds, cancellations, custom orders, chargebacks, and dispute-related provisions. The right terms depend on what you're selling and how your business operates.
Quick Etsy Terms of Purchase Checklist
Before you start selling or update your existing Etsy shop, make sure you've addressed:
- Payment and accepted payment methods
- Shipping and estimated delivery timelines
- Returns and exchanges
- Refunds and cancellations
- Custom order requirements and approval process
- Revision limits for custom work
- What happens if an item arrives damaged
- Chargebacks and payment disputes
- How customers can contact you with questions or concerns
- Where customers can find your terms before purchasing
Your terms should also be consistent with Etsy's current policies and applicable law.
One more important distinction: A Terms of Purchase is designed to address the terms of your transactions with customers. It's different from a Website Terms and Conditions, which generally governs how visitors can use your website. If you sell products through your own website in addition to Etsy, you may need both types of documents as part of your broader legal foundation.
The FIRST step for implementing any of these things is having a Terms of Purchase in the first place and if you aren’t sure where to start, we of course have you covered!
With this Terms of Purchase template, you’ll get a strong starting point for establishing clear terms for your Etsy transactions and laying out exactly what will happen if a purchaser requests a refund, initiates a chargeback, or the item arrives damaged.
For all other legal agreement needs, you can browse The Boutique Lawyer's contract template shop.
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ABOUT THE AUTHOR, AMBER GILORMO – ATTORNEY AND FOUNDER OF THE BOUTIQUE LAWYER
Amber Gilormo is the cool lawyer behind The Boutique Lawyer – a one-stop contract template shop for creative entrepreneurs, online business owners, coaches, and service providers.
From client agreements to digital product terms and everything in between, our lawyer-drafted templates take the guesswork out of staying legally protected online (no legal jargon required).
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