AI chat widgets are easy to add to a website now, and the pitch is tempting: answer customer questions around the clock while you’re at your day job or asleep. For a one-person business, that sounds like hiring help for the price of a subscription. Before you add one, it’s worth understanding what you’re signing up for, because whatever the bot says, you said.
The Case That Should Make Every Small Seller Pause
In February 2024, a British Columbia tribunal ruled against Air Canada in a dispute over its website chatbot. As the American Bar Association’s Business Law Today summarizes it, the bot told a grieving customer he could apply for a bereavement discount within 90 days after buying his ticket. The airline’s actual policy said no such refunds after travel. Air Canada argued, among other things, that the chatbot was responsible for its own actions and that the correct policy was available elsewhere on its site.
The tribunal disagreed. It found the airline liable for negligent misrepresentation, said the chatbot was part of Air Canada’s website, and noted that customers shouldn’t have to cross-check one part of a site against another. The award was about CAD $650 plus interest and fees. It was a decision by British Columbia’s Civil Resolution Tribunal, not a court ruling and not a US case, so its legal weight is limited. The practical lesson still travels well: customers will treat your bot’s answers as your answers.
What US Regulators Have Said
The Federal Trade Commission has also published business guidance on chatbots. A July 2024 summary by the law firm Fenwick lists five don’ts drawn from that guidance:
- Don’t misrepresent what your chatbot is or what it can do.
- Don’t deploy it without reasonable steps to limit harmful or wrong output.
- Don’t place ads inside the chat without making clear they’re paid.
- Don’t exploit the trust people place in a bot or avatar to sell to them.
- Don’t violate customers’ privacy.
This is general information, not legal advice, and rules vary by state and country. If you sell to customers in the EU or other regions, check what applies there too.
The Honest Pros and Cons
Where a Chatbot Can Help
- Answering the same handful of questions you get every week: download links, file formats, refund policy, how to access a course
- Giving customers a faster first response while you’re unavailable
- Pointing people to the right help page instead of making them search
Where It Can Hurt
- AI models can produce confident, wrong answers, including about your refund terms or what a product includes
- Customers may type personal or payment details into the chat, which creates privacy responsibilities
- A bot that can’t hand off to a human can turn a small question into an angry email or a chargeback
Try the Low-Tech Version First
For most side businesses, the better first step isn’t a bot at all. It’s a clear FAQ page plus a set of saved replies in your email for your most common questions. You can use an AI assistant privately to help draft those answers, then edit and fact-check them yourself before they ever reach a customer. That gives you most of the speed with none of the risk of a bot improvising.
If You Do Add a Chatbot
- Limit what it knows. Choose a tool that answers only from content you supply, such as your FAQ, policies and product pages, and check its documentation for how it handles questions outside that content.
- Say it’s AI. Label it clearly so nobody thinks they’re talking to you.
- Keep policies out of its improvisation. For refunds, pricing and licensing, have it quote or link the official page rather than paraphrase.
- Offer a human route. Include an easy “email me instead” option and a realistic reply time.
- Read the logs. Review conversations weekly at first. Fix wrong answers at the source by improving your FAQ.
- Check the privacy terms. Find out what the vendor stores, for how long and whether it’s used for training, and update your privacy policy to match.
Budget your own time as well as the subscription fee. A chatbot isn’t set-and-forget: you’ll need to write and update the content it draws from, review conversations and fix mistakes, especially in the first few weeks. If you only get a handful of customer questions a week, that upkeep may cost more time than the bot saves. Costs and features change often, so confirm current pricing and limits on each vendor’s official pages before you commit.
Do This Today
Open your inbox, find the five customer questions you’ve answered most often, and write a short, accurate answer to each. Put them on an FAQ page or save them as email templates. Whether or not you ever add a chatbot, that list is the foundation any good one would need.
More on Totally Relentless
- How to Fact-Check AI Output Before You Hit Publish
- When to Disclose AI Use: KDP, YouTube and FTC Rules in Plain Words
- What to Keep Out of AI Chats: Protecting Private Data in a One-Person Business
