E-commerce: terms A to Z
Every online selling term explained in plain English: cart, checkout, SKU, gateway, chargeback, and more.
Running an online store introduces a whole new vocabulary. This page explains every term you'll encounter, from your first product listing to payment disputes.
A to C
| Term | Plain-English definition |
|---|---|
| Abandoned cart | A shopping cart a visitor filled with items but then left without completing the purchase. See Understanding abandoned carts. |
| API | Application Programming Interface. Lets your store software communicate with payment processors, shipping carriers, and other services automatically. |
| Authorization | A hold placed on a customer's payment card that reserves funds without actually charging them yet. |
| Average order value (AOV) | The average amount customers spend per order. A key e-commerce metric. |
| Back order | A product ordered when it's temporarily out of stock. Usually the customer pays now and you ship once stock arrives. |
| Basket | Another word for shopping cart (more common in the UK). |
| Bundle | A group of products sold together as a package, often at a slight discount. |
| Cart | The virtual basket where customers collect items before checkout. See Your store's key pages. |
| Chargeback | When a customer disputes a transaction with their bank and the bank reverses the payment. Can result in fees for the merchant. See Chargebacks & disputes explained. |
| Checkout | The process a customer goes through to enter payment and shipping details and place an order. |
| Conversion | When a visitor completes a desired action: most commonly, making a purchase. |
| Conversion rate | The percentage of sessions that end in a purchase. E.g. 100 sessions, 2 purchases = 2% conversion rate. In GA4 the on-screen metric is Session key event rate; a separate User key event rate divides by users instead, so check which one you're reading. |
| Coupon | A discount code customers enter at checkout to reduce the order total. See Creating coupons & discounts. |
| Cross-sell | Suggesting related products to a customer. "You might also like…" |
| CSV | Comma-Separated Values. A spreadsheet format used to import or export large numbers of products at once. |
| Customer lifetime value (CLV/LTV) | The total revenue a customer is expected to generate over their entire relationship with your business. |
D to G
| Term | Plain-English definition |
|---|---|
| Digital product | A product delivered electronically: PDFs, software, music, courses, templates. No physical shipping needed. See Selling digital & downloadable products. |
| Discount | A price reduction, either a fixed amount ("$10 off") or a percentage ("20% off"). |
| Drop-shipping | Selling products you don't stock yourself: a third-party supplier ships directly to your customer when an order is placed. |
| Fulfillment | The process of packing and shipping an order to the customer. |
| Gateway | Short for payment gateway. See below. |
| Gift card | A prepaid credit customers can use on your store. |
| Gross revenue | Total sales before any deductions: fees, refunds, or returns. |
I to N
| Term | Plain-English definition |
|---|---|
| Inventory | The stock of products you have available to sell. Managing inventory means tracking what's in stock and when to reorder. See Managing stock & inventory. |
| Invoice | A document requesting payment from a customer, listing what was purchased and the amount owed. |
| Merchant account | A type of bank account that lets businesses accept card payments. Services like Stripe cover the equivalent as part of what they do, so a small store may never need to open one separately. |
| Net revenue | Gross revenue minus refunds, fees, and returns. What you actually keep. |
O to P
| Term | Plain-English definition |
|---|---|
| Order | A customer's confirmed purchase. Includes items, shipping address, payment info, and status. See Understanding orders. |
| Order status | Where an order is in its lifecycle. WooCommerce uses pending payment, processing, on hold, completed, cancelled, refunded and failed, plus a draft state the block checkout creates. See Order statuses explained. |
| PCI compliance | Payment Card Industry compliance. Security standards that apply if you store, process or transmit cardholder data. Using a hosted checkout reduces your scope, but it doesn't remove it. See PCI compliance, in plain English. |
| Payment gateway | The service that securely transmits card data between your checkout and the payment processor. With services like Stripe, one company covers both jobs. |
| Payment processor | The company that handles the actual movement of money between your customer's bank and yours. See Payment processors explained. |
| PayPal | A popular online payment service. Customers can pay with their PayPal balance or linked card. See PayPal basics for business owners. |
| Product | An item listed for sale on your store. WooCommerce's built-in product types are simple, grouped, external/affiliate and variable, with separate checkboxes to mark a product virtual (not shipped) or downloadable. |
| Product category | A grouping for products in your store: "Men's Shoes," "Office Supplies," etc. |
Not one continuous action, but separate events on separate clocks. The approval round trip is over in about two seconds, and it only reserves the money. Capture moves it. Your payout is batched at the end of the business day and reaches your bank one to three business days later, already net of fees.
Read this as text
The customer clicks “Pay now” on your website. The payment form your site shows is usually hosted by your payment gateway and processor (Stripe, for example, combines those two roles in one product), so the card details go straight there and the raw card number never sits on your own server. The processor asks the card network to authorize the charge, and the network routes the request to the customer’s own bank, which checks the available balance and looks for fraud signals. The approval or decline comes back to the customer in about two seconds.
Authorization only reserves the money. Capture actually moves it, and it is a separate event. Most online stores capture immediately at checkout, which is why the two are so easily confused. A business that ships goods after confirming stock can authorize first and capture when the item ships.
Getting paid runs on a different clock again. At the end of each business day the processor batches and settles all the captured transactions, and the net amount (the sale minus fees) moves toward your bank account. Depending on your processor and your settings, it arrives one to three business days later. The card network and the customer’s bank are not your systems: the customer’s bank is the one that approves or declines the charge.
R to S
| Term | Plain-English definition |
|---|---|
| Recurring payment | A payment that repeats on a schedule: weekly, monthly, annually. Used for subscriptions. See Recurring payments & subscriptions. |
| Refund | Returning money to a customer for a returned or cancelled order. See How to refund an order. |
| Return | When a customer sends back a physical product. Often triggers a refund. |
| Revenue | The total money your store brings in from sales. |
| Review | A rating and comment left by a customer on a product page. Builds trust with new shoppers. |
| Sales tax | Tax collected from customers at checkout, usually based on their location. Required in many jurisdictions. See Sales tax basics for online sellers. |
| Shipping zone | A geographic area with specific shipping rates applied to orders from that region. See Setting up shipping zones & rates. |
| SKU | Stock Keeping Unit. A unique code you assign to each product (or variant) for inventory tracking. |
| Stock | See Inventory. The quantity of a product you have available. |
| Store | Your online shop, all the products, checkout flow, and order management together. |
| Stripe | A popular payment processor used for accepting credit and debit cards online. See Stripe basics for business owners. |
| Subscription | A product or service charged on a recurring basis. WooCommerce needs an extension for this, such as WooCommerce Subscriptions. See Selling subscriptions (overview). |
T to Z
| Term | Plain-English definition |
|---|---|
| Tax rate | The percentage of tax applied to an order. Varies by product type and customer location. |
| Transaction fee | The fee a payment processor charges you per transaction, usually a percentage plus a flat amount. Rates change, so check your processor's own pricing page for the current rate. |
| Upsell | Encouraging a customer to buy a more expensive or premium version of what they're considering. |
| Variable product | A product with multiple options: size, color, material. Each combination can have its own price and stock level. See How to add a variable product. |
| Virtual product | Not a product type but a checkbox: tick Virtual in WooCommerce for anything you don't ship, such as a service or a booking. It switches off the shipping fields and the cart's shipping calculator. |
| Wishlist | A feature letting customers save products they like for later, without adding them to cart. |
| WooCommerce | A free WordPress plugin that turns a WordPress site into an online store, and one of the most widely used e-commerce platforms. See What is WooCommerce?. |
Common questions
Related guides
Was this page helpful?
Go deeper on chykalophia.com
Done for you
Rather not do this yourself?
This is everyday work for our team. Book a free discovery call and we'll tell you honestly whether it's worth paying someone for.
Already a client? Email support@chykalophia.com.
Last updated