Launching a dropshipping store is faster and cheaper than ever, but the stores that scale are the ones that get compliance right from day one. This practical starter kit distills the key legal, tax, privacy, and payment risk steps you need to take, with links to official sources and ready to use templates. Whether you are spinning up a Shopify store or a WooCommerce site with the WooDropship plugin, these foundations protect your revenue and help you pass payment gateway reviews on the first try.

1. Must have website policies that reduce risk and win gateway approvals

Payment providers look for specific website disclosures before they switch on live payments. The Website checklist from Stripe explicitly calls for a clear refund policy, shipping or delivery policy with timelines and fees, accurate contact information, and terms of service. According to PayPal's Seller Protection terms, coverage during disputes depends on proof of shipment or delivery, which only works if your policies match your operational reality.

• Publish these four pages before submitting your store for review: Privacy Policy, Terms of Service, Shipping Policy, and Returns and Refunds Policy. If you need help, start with our guide to a dropshipping return policy and pick a template from the best privacy policy generators.
• Set honest shipping windows. The FTC’s Mail, Internet, or Telephone Order Rule requires timely delivery or consent to a delay, otherwise a prompt refund is required, as explained in the FTC’s rule summary.
• Match your policies to your actual AliExpress lead times. If you are new to suppliers, read our guide to the best AliExpress shipping methods and how to handle returns and refunds with AliExpress.

WooDropship’s prebuilt Shopify stores ship with essential legal pages and gateway setup so you can go live quickly. See what is included in our dropshipping stores, or use the WooDropship plugin to import products to WooCommerce and generate compliant pages on WordPress.

2. Taxes made simple, from US sales tax to EU VAT and UK VAT

United States. Most states require remote sellers to register and collect sales tax when you cross an economic nexus threshold. Many jurisdictions have moved away from the 200 transaction rule and now focus on revenue. For example, Avalara’s state guide tracks that several states have eliminated the transaction count and use a 100,000 dollars sales threshold, with updates such as Indiana and Wyoming dropping the 200 transaction test in 2024, as reported by Avalara. Use a sales tax app or your accountant to monitor thresholds monthly.

European Union. If you sell to EU customers, the Import One Stop Shop simplifies VAT on low value consignments not exceeding 150 euros. The European Commission explains how the IOSS lets you charge VAT at checkout and remit it through a single return. This reduces delivery surprises for your customers and can cut customs delays.

United Kingdom. The VAT registration threshold increased to 90,000 pounds in April 2024. The official GOV.UK notice confirms the change in the VAT registration threshold. If you sell into the UK, assess whether you need a UK VAT number and clarify who is the importer of record in your shipping policy.

If you are validating product and channel fit with minimal volume, track where your customers are located and your rolling 12 month sales by state or country. Once you approach a threshold, register before crossing it.

3. GDPR and CCPA, what a dropshipper must do

GDPR. The European Commission’s summary of the EU data protection legal framework outlines obligations that apply if you process EU residents’ data. For a store, that means you must identify a lawful basis for processing, provide a clear privacy notice, honor access and deletion requests, and sign Data Processing Agreements with processors like your email provider. If you drop cookies for analytics or ads, obtain consent in the EU and document it. Use a cookie banner that lets visitors manage categories and refreshes tracking based on consent.

CCPA and CPRA. California consumers have rights to know, delete, and opt out of selling or sharing personal information. The Attorney General’s office explains the core rights on the CCPA page, and the California Privacy Protection Agency details required notices, including the Notice at Collection. If you use advertising cookies that share data for cross contextual advertising, provide a Do Not Sell or Share link and honor opt outs.

Action steps. Link your Privacy Policy in your footer, list categories of personal data collected, identify purposes, name your processors, and provide an email or webform for requests. If you sell to EU residents, add a GDPR compliant consent banner. If you advertise to Californians, include the Do Not Sell or Share link and respect Global Privacy Control signals.

For non technical founders, WooDropship’s store package includes SEO and legal pages so you start compliant on day one. If you are building on Shopify, you can get started with Shopify and let our team deliver a complete store in 7 days.

4. Chargebacks and disputes, how to keep ratios healthy

Marketplaces and gateways watch your dispute rate closely. The MasterCard Excessive Chargeback Merchant program flags merchants with at least 100 chargebacks in a month and a chargeback to transaction ratio of 1.5 percent or more, and considers 3.0 percent as high excessive, according to the Mastercard ECM guide via J.P. Morgan. Visa’s merchant guidelines detail dispute reasons and how to respond, including using AVS, CVV2, and 3DS authentication for card not present transactions, as outlined in the Visa Dispute Management Guidelines.

Practical wins for dropshippers:

• Authenticate high risk orders with 3DS when available, keep AVS and CVV2 checks on, and capture clear delivery proof to the AVS matched address. Visa’s guide explains that Visa Secure can shift liability and reduce certain fraud disputes when used correctly.
• Ship before capturing funds when possible, set realistic delivery times, and proactively notify customers of delays to prevent Item Not Received disputes. The FTC’s rule on mail and internet orders requires consent for delays, which also reduces complaints.
• Sync tracking numbers to PayPal and customer emails. Our tutorial shows how to sync order tracking with PayPal so Seller Protection can apply.

If you see a pattern of disputes linked to one supplier or product, stop advertising it, retrain the supplier on packaging and timelines, or switch vendors. Our guide on how to avoid common dropshipping mistakes covers proactive QA steps.

5. Payment gateway approvals, what reviewers check and how to pass

Stripe and PayPal want to see a real business, not a placeholder. According to Stripe’s website checklist, reviewers check that your domain is live, your products are accurately described, your prices and currencies are visible, and your refund and shipping policies are easy to find. PayPal’s Seller Protection terms require proof of shipment or delivery for coverage, so list your courier methods and tracking practices.

Approval checklist you can follow today:

• Purchase a branded domain and publish a finished theme with product pages, clear images, and pricing. If you need themes, see our picks for the best WordPress themes for dropshipping.
• Add Privacy Policy, Terms, Shipping, and Returns to your footer and checkout. Use our return policy guide to align with your suppliers.
• Display your support email, business address, and response time. If you promise 24 hour replies, honor it.
• Avoid restricted products and counterfeit listings. Visa’s dispute rules include specific reason codes for counterfeit goods, so only list items from reliable AliExpress suppliers. If you are starting out, read AliExpress Dropshipping 101 and learn how to automate your AliExpress operations.

If you want speed, our prebuilt Shopify stores include gateway setup, 30 vetted products, premium theme, and conversion apps, delivered in 7 days for a one time fee. Prefer WordPress, start your free trial of the WooDropship AliExpress plugin and import products in one click with our Chrome extension.

Happy WooDropshipping!