Vistaprint 2012 Annual Report Download - page 30

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offers-for example, that customers are required to pay shipping and processing charges to take advantage of a free
product offer-from time to time we face claims, complaints and inquiries from our customers, competitors,
governmental regulators, standards bodies and others that our free offers are misleading or do not comply with
applicable legislation or regulation, and we may receive similar complaints, claims and inquiries in the future. If we
are compelled or determine to curtail or eliminate our use of free offers as the result of any such actions, our
business prospects and results of operations could be materially harmed.
If we were required to review the content that our customers incorporate into our products and interdict the
shipment of products that violate copyright protections or other laws, our costs would significantly
increase, which would harm our results of operations.
Because of our focus on automation and high volumes, the vast majority of our sales do not involve any
human-based review of content. Although our websites' terms of use specifically require customers to represent
that they have the right and authority to reproduce a given content and that the content is in full compliance with all
relevant laws and regulations, we do not have the ability to determine the accuracy of these representations on a
case-by-case basis. There is a risk that a customer may supply an image or other content for a product order that
we produce that is the property of another party used without permission, that infringes the copyright or trademark
of another party, or that would be considered to be defamatory, hateful, obscene, or otherwise objectionable or
illegal under the laws of the jurisdiction(s) where that customer lives or where we operate. If we should become
legally obligated in the future to perform manual screening and review for all orders destined for a jurisdiction, we
will encounter increased production costs or may cease accepting orders for shipment to that jurisdiction, which
could substantially harm our business and results of operations. In addition, if we were held liable for actions of our
customers, we could be required to pay substantial penalties, fines, or monetary damages.
The third party membership programs previously offered on our website may continue to draw customer
complaints, litigation and governmental inquiries, which can be costly and could hurt our reputation.
We previously offered on our website third party membership discount programs, some of which have been,
and may continue to be, the subject of consumer complaints, litigation, and governmental regulatory actions
alleging that the enrollment and billing practices involved in the programs violate various consumer protection laws
or are otherwise deceptive. Although we removed all such membership discount program offerings from our
websites as of November 2009 and terminated our relationship with the third party merchant responsible for these
programs, we continue to receive complaints from our customers and inquiries by state attorneys general and
government agencies regarding these programs. Any private or governmental claims or actions that may be brought
against us relating to these third party membership programs could result in our being obligated to pay substantial
damages or incurring substantial legal fees in defending claims and have an adverse effect on our results of
operations. Even if we are successful in defending against these claims, such a defense may result in distraction of
management and significant costs. In addition, customer dissatisfaction or damage to our reputation as a result of
these claims could have a negative impact on our brands, revenues and profitability.
We are subject to customer payment-related risks.
We accept payments for our products and services on our websites by a variety of methods, including
credit or debit card, PayPal, check, wire transfer or other methods. In some geographic regions, we rely on one or
two third party companies to provide payment processing services. If any of the payment processing or other
companies with which we have contractual arrangements became unwilling or unable to provide these services to
us or we are unable to comply with our contractual requirements under such arrangements, then we would need to
find and engage replacement providers, which we may not be able to do on terms that are acceptable to us or at all,
or to process the payments ourselves. Any of these scenarios could be disruptive to our business as they could be
costly and time consuming and may unfavorably impact our customers.
As we offer new payment options to our customers, we may be subject to additional regulations,
compliance requirements and fraud risk. For certain payment methods, including credit and debit cards, we pay
interchange and other fees, which may increase over time and raise our operating costs and lower our profit
margins or require that we charge our customers more for our products. We are also subject to payment card
association and similar operating rules and requirements, which could change or be reinterpreted to make it difficult