If you have ever purchased an ice cream cone, rented a movie or taken a taxi across town, then you’ve completed a consumer transaction. An act like buying a lottery ticket might not actually net any kind of reward, but it still falls in the same category. These transactions are an integral part of an economy. People need products and services, and businesses do their part to fill consumer needs.
According to U.S. Legal Definitions, a consumer transaction is defined as “a sale, lease, assignment, award by chance,or other disposition of an item of personal property.” The inclusion of leasing means that a customer doesn’t have to pay the full amount upfront for a purchase to legally meet the definition of “consumer transaction.” Additionally, he does not even need to directly purchase a product. As an example, when a person buys a raffle ticket it is considered by law to be a consumer transaction, whether or not he actually wins a prize.
Consumer transactions serve the purpose of providing people with the products and services they need or want. These financial interactions are vital for keeping companies in business and providing jobs to people who, in turn, become consumers themselves. They are also essential for a healthy economy, which impacts local governments and political parties. State and local sales taxes rely on citizens purchasing goods and services. The funds drawn from these transactions are used to help provide for municipal services, such as law enforcement and education.
ECommerce is an emerging form of consumer transactions. Beginning in the late 1990s with such pioneers as eBay and Amazon.com, the Internet became a means for consumers to conduct business with companies. By utilizing the Internet, customers are able to find virtually any type of product they need or want. These transactions can be made at any hour of the day and provide consumers with the greatest amount of convenience.
There are a variety of transactions performed in any given economy. When a business sells good or services to another business--an action which is referred to as “B2B”--it differs from a consumer transaction. The major distinction is that in a business to consumer transaction--known as “B2C”--the final product is used by the consumer and not sold or used for additional processing.
When a lumber company sells wood to a carpenter for the manufacture of chairs to be sold, it is considered to be a B2B transaction. If the same carpenter buys the wood to complete a deck on his own house, then the transaction is B2C.
Whereas consumers are protected under the law, it is important for customers to be aware and not fall into financial traps from scam artists. Consumers should be careful to complete their transactions with reputable businesses. Another major area for concern with regard to safety is online purchases. When a consumer completes a transaction over the Internet, a credit or debit card is commonly used. Anyone making a purchase in this manner should be sure the website uses data encryption for the transaction.
Consumer Product Safety Commission
Free Dictionary.com notes that the Consumer Product Safety Commission was established by the U.S. Congress in 1972 and functions to protect consumers from faulty or dangerous products. This can help provide a certain level of assurance for customers and also gives legal grounds for action against companies that provide products that are not safe.