Calling All Etsy Sellers: Implement This Legal Agreement FIRST
As an Etsy seller, you pour your heart and soul into every handmade item, but in the bustling world of online sales, it's crucial to protect your craft and your business.
Just like any business, it’s important that you treat your Etsy shop as well… a BUSINESS! Even if it’s something that you consider to be a hobby or a side hustle, you want to make sure that you’re treating it just as you would any other business venture.
For many Etsy sellers, the legalities of business are easy to overlook, because again, it might be something that started as a side hustle and suddenly turned into something that generates real cash for you.
No matter where you find yourself in your Etsy shop journey, it’s important to take the necessary precautions and implement certain policies to ensure that you and your business are fully protected every step of the way.
One of the most important things to implement first? 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.
What is a Terms of Purchase Agreement?
The best way to think about a Terms of Purchase Agreement for your business is like a rulebook for a game.
It sets the ground rules and expectations for how your customers can use your products while simultaneously providing a safety net for you as the business owner.
Just like in a football game, when there’s a dispute of any kind, the referees refer to the rulebook for their final call. The same goes for your business – if or when you run into a problem of any kind, you can turn to your business owner “rulebook” to determine your plan of action for resolution.
You’ve probably heard Terms of Purchase described as the Terms and Conditions – they’re one in the same!
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.
5 Key Elements of a Terms of Purchase Agreement
Now that you understand what exactly a Terms of Purchase Agreement is, you might be wondering what exactly needs to be included in your agreement to make it the most effective.
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!
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.
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 clients 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 one for you specifically!)
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!
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 clients, make sure it’s outlined here!
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 something to fall back on.
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:
- Etsy Shop Policies Section – this section can be dedicated to outline the key policies of your shop and serve as the first line of defense and the first place customers will look when purchasing from you
- 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
- 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!)
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 everything you need in one place to protect your Etsy shop and lay out exactly what will happen if the purchaser requests a refund, initiates a chargeback, or the item arrives damaged.
For all other legal agreement needs, you can browse the contract shop and if you aren’t sure what you need, send us a DM - we’re always here to help. 💖