The business of selling erotic novelties online possesses obvious appeal to entrepreneurs getting their first start in online commerce: Independence, freedom to set one's own hours, the potential to make substantial money without substantial up-front costs, and for many, a strong sense of personal fulfillment.
But no business opportunity worth much exists without risk, and legal risk in particular. Selling sex toys on the internet carries its own distinctive risks. As an entrepreneur, you must become aware of them, size up your operation in terms of compliance, and make smart changes to reduce your risk.
1. Selling Sex Toys is a Crime in Some States
To those of us who live in parts of the US that consider themselves enlightened (I'm thinking about the Blue States here) it seems like a natural thing that vibrators and dildos and other more creative novelties should be available in stores and online for anyone who wants them. It may be surprising to learn that some states have laws criminalizing the sale and distribution of sex toys, but it is true.
Though it genuinely should seem troubling in light of the United States Supreme Court's decision n Lawrence v. Texas (2003) that the Texas law against consensual sodomy could not constitutionally stand against the privacy rights of persons in their homes, as recently as February, 2007, the federal courts have upheld criminal statutes in Alabama criminally proscribing the sale of "any device designed or marketed as useful primarily for the stimulation of human genital organs." Williams v. Morgan, (Eleventh Cir., February 14, 2007). The Eleventh Circuit court, sitting in Atlanta, determined that "public morality" survives the decision in Lawrence, so that states can legitimately enact laws designed to protect that public morality; The Eleventh Circuit distinguished the unprotected sale of sex devices from the protected sodomy in Lawrence by the nuance that private sodomy in the home is constitutionally different-and more protected-than the public commerce in sex devices.
The Bottom Line: Don't sell and ship sexual devices in Alabama or any other state prohibiting them unless you wish to fund a test case. Consult with a lawyer experienced in the representation of online or mail-order novelty sales to create a "Don't Ship" list of jurisdictions.
2. Does the Packaging Comply with Section 2257?
There exists some possibility that a retailer or distributor may retain in its inventory materials containing depictions that are now newly covered by the July 2006 amendments to Section 2257-but without bearing the mandatory Disclosure Statement. This category would most likely consist of packaging materials containing photographs that depict the genitals or public area in a lascivious manner.
It is not the responsibility of the retailer to assure the accuracy of the information contained in the notice; He discharges his responsibility in the law by ascertaining that a notice containing the required information is affixed in the manner also prescribed by the statute and regulations.
The Bottom Line: Packaging material should be closely inspected. The packaging of novelties produced offshore or by small, independent domestic producers, as well as novelties in long and constant production deserve special scrutiny.
3. Email Marketing: CanSpam
The CanSpam Act is complex, but the most critical elements you should know about include:
- You can't use misleading header identification or spoof origination from another email address.
- You can't use deceptive subject headings.
- You must include a valid "repy-to" email address.
- If the recipient objects to receiving your emails, you must remove him within 10 days. Caution: Make sure this is covered during any vacation or illness.
- You must indicate in the email message that it is an advertisement or solicitation.
- If the advertisement is sexually-oriented, specific words must appear in your subject header.
- You must include an "opt-out" mechanism.
- You must include a physical address for communications to be sent to you in the real world by snailmail.
The Bottom Line: Before using email to advertise, develop and fine tune your understanding of the requirements of law, and establish protocols to comply with an attorney skilled in this area.
4. Advertise Only with Images and Copy that You Own or Have Permission to Use
Any time online publishers (that includes you!) use an image to advertise or promote, there are at least four dimensions that must be considered with respect to each image. Each image must be assessed for obscenity, Section 2257 compliance, copyright or license to use the images-in the way you want to use them, and release of personal rights of the models depicted for publication of the model's image-in the way you want to use it. The use of images pilfered from cyberspace is bad business for many reasons beyond the obvious liability for copyright infringement that will probably arise. Advertising copy is subject to copyright law, too, and you should only use copy that you have written, bought, or licensed.
The Bottom Line: Don't Steal Advertising Content.
5. Don't Misrepresent Your Merchandise
From every possible perspective, it makes eminent good sense to market your materials in a manner that is accurate and comprehensive, and to avoid exaggeration and misleading statements and partial truths like the plague. The federal government and a large, if not universal, segment of the states have enacted legislation which vigorously protects against consumer fraud and deceptive business practices, usually awarding attorney's fees and punitive damages to the disgruntled customer who may sue you in an inconvenient location. Be generous in all of your policies. You will not only avoid expensive charge-backs, but you will have invested in the best kind of advertising, satisfied customers.
The Bottom Line: Be an honest and helpful merchant.
This article is written for the general legal education of the public and not as legal advice to any person. No person becomes a client of the author by reading it. If you need legal advice, contact a lawyer.
