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Shopify is one of the most popular platforms for running an e-commerce store. However, before setting up a Shopify store, you should consider the risks of building a business using Shopify. This article explains what these risks are and how to mitigate them.

Shopify Can Delete Your Account

Under Shopify’s Terms of Service, Shopify can cancel your account at any time, for any reason. If Shopify concludes that you have breached their Acceptable Use Policy or the Terms of Service, Shopify may:

  • remove any images or content from your account; or
  • suspend or terminate your account.

If you run a legitimate online business and comply with Shopify’s Terms of Service, having your account terminated is only a small risk. Nevertheless, it is a risk that does not exist when you create an independent store on your own website.

Shopify Locks You into Price Increases

Shopify charges two fees for using its service:

  1. a monthly flat fee; and
  2. a percentage of any sales you make through the platform.

The fees are tiered depending on the features you want. If you are on a budget, you can stick to the barebones package to keep costs low.

However, as stated in their Terms of Service, Shopify can increase its prices by giving you 30 days’ notice. Given your initial investment in setting up the store, you might be reluctant to change if Shopify’s fees increase. If you choose to use a hosted platform like Shopify, then be aware that Shopify controls pricing for using its services.

Shopify Will Delete Content If You Move to a Different Platform

You may wish to move your successful online store off the Shopify platform for any number of reasons. You might want greater freedom to design your website, or avoid having to pay Shopify’s fees.

If you do move your store, then be aware that Shopify does not have a legal obligation to keep descriptions of your products, customer information or product images. Therefore, keep backups on your hard drive or export this material before you close your store.

You Still Need a Terms of Service and Privacy Policy

Whether selling products online or in a market stall, you need policies to deal with refunds, delivery and limitation of liability. The Shopify Terms of Use require that you upload your terms of service and a privacy policy when setting up a Shopify store. Shopify offers template versions of these documents for you to customise. However, as Shopify is a Canadian company, you will need to check that these comply with Australian law.

In particular, you need to understand your obligations under the Australian Consumer Law. These include that you must offer to fix a product if there is a minor fault (a fault that can be repaired to its original condition). If there is a major fault (one that cannot be fixed), you need to exchange or refund the product.

Shopify is PCI DSS Compliant

Setting up a Shopify store does reduce risk in one important way, however. Shopify offers payment processors that are PCI DSS compliant, which means Shopify adheres to secure payment processing standards that help prevent credit card fraud. Attaining PCI DSS compliance is complex and involves setting up high-grade security measures for each point of sale terminal and quarantining customers’ credit card details, for example.

You do not want to be held liable if credit card fraud occurs on your site, so Shopify offering PCI DSS compliance is a big advantage. Shopify offers integration with PayPal Express and Apple Pay, both of which comply with PCI DSS.

Key Takeaways

Setting up a Shopify store is an excellent way to start building an online business. Shopify offers free website templates and importantly, PCI DSS compliance. However, using Shopify does expose you to some small risks that your account might be shut down and valuable information and content lost. You are also still responsible for having terms of service and a privacy policy.

If you need assistance with setting up a Shopify store, call LegalVision’s online lawyers on 1300 544 755 or fill out the form on this page.

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