Glossary

Group buying

Organiser

A person who announces a purchase, collects participants' orders and money, buys the goods from the supplier and hands them out. They are usually paid an organiser's fee for their work.

Participant

A buyer who joins a purchase, chooses items and pays for them along with the fee. They are responsible for paying on time and collecting their order.

The stop

The moment when orders close and the contents of the purchase are fixed. After it, changing or cancelling an item is usually difficult or impossible.

Bulk buy

Payment for the batch to the supplier, which the organiser makes after the stop using the money collected from participants.

Distribution

Handing goods to participants after the organiser has received and sorted the batch: in person, via a pick-up point or by post.

Organiser's fee

The organiser's payment for their work, usually added to the price of the goods. It is best to know how much it is and what it covers before paying.

Law

Agency contract

A contract under which an agent, for a fee, carries out legal and other actions on the principal's instructions, either in the agent's own name but at the principal's expense, or in the name and at the expense of the principal (Art. 1005 of the Russian Civil Code).

Principal

The party to an agency contract on whose instructions and at whose expense the agent acts. In a group purchase, participants may find themselves in this role.

Simple written form

A transaction recorded in a document that sets out its content and is signed by the parties. Under Russian law it is mandatory for transactions between private individuals over 10,000 roubles, except those performed when made (Art. 161 of the Civil Code).

Written complaint

A written demand to the other party to refund money, replace an item or put a breach right. It usually sets out the problem, the demand and a deadline for a reply.

Distance selling

Selling on the basis of a description without the buyer seeing the goods in person: through a catalogue, a website or by phone. Under Russian law, special return rules apply to such purchases from a shop (Art. 26.1 of the Consumer Protection Law); the EU has its own rules on distance purchases.

Proper quality

The goods match the contract and normal requirements and have no defects. Returning such goods after a distance purchase is a withdrawal from the purchase, not a claim about a defect.

Money and taxes

Prepayment

Payment before the goods are received. It is the most common arrangement in group purchases, which is why it is so important to keep proof of the transfer and the purchase terms.

Refund

Paying the amount back when a purchase falls through, the goods are refused or a complaint is accepted. It is best to agree the timing and method in writing.

Professional income tax

A special Russian tax regime under Federal Law No. 422-FZ: 4 % on income from individuals and 6 % on income from sole traders and companies, for income of up to 2.4 million roubles a year. Other countries have their own tax rules.

Receipt

A document confirming payment. In a group purchase, the seller may issue one to the organiser, or the organiser to the participant; it is worth checking whether you will get one before paying.

Related sections

• Basics

  How a group purchase works: participant, organiser, supplier, order collection, the "stop", the bulk buy and distribution; why the organiser is an intermediary.

• Documents

  Which records prove the terms, payment, receipt and return; when written form is required; buyers' rights in distance selling.

• FAQ

  Short answers to questions from participants and organisers, plus disputes, returns and money matters in group buying.