ODR in the consumer context refers to the use of ICT tools and methods (usually alternative to the court system) employed by businesses and consumers (B2C) to settle conflicts that arise out of economic transactions between the parties, particularly in e-commerce.
It is often distinguished from other fields where ODR is used, such as in the commercial field (B2B), in the public sphere to resolve government and citizen (G2C) disputes, and in the resolution of disputes related to intellectual property.
A consumer transaction (B2C), akin to a consumer dispute, will be one where an individual, acting on a personal capacity, buys goods or services for his or her personal use. Conversely, a business is an individual or an entity that acts on a professional capacity selling goods or services as part of their profession.
In a B2C dispute, the aggrieved party is frequently the consumer as they normally pay in advance for their purchased goods and services. Consequently, the consumer is the weaker party in a dispute where the business has the payment and the experience of dealing with similar disputes. Consumers will often get more involved in the dispute, taking it more personal, and thus requiring a more transformative solution, while the business is mostly interested in resolving the dispute as fast and inexpensively as possible.
In certain cases, businesses will be keen in resolving the dispute in order to maintain their reputation. This is relevant when, as it happens in eBay, the buyer leaves feedback after a transaction. When ODR is effectively used in this way, it has an added value for the parties; it increases the consumers’ trust in those online sellers that provide ODR services. Greater trust means that reliable sellers would boost their trade and consumers will be protected from the potential abuse by the dominant party in the transaction. ODR services may be employed to ensure that consumers’ rights are respected by the online vendor, hence enhancing consumers’ confidence in the online transaction. As a result,ODR would ultimately enhance the business’s ability to sell while at the same time protecting the consumer’s ability to participate safely in e-commerce.