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Consumer Co‑operative

General Characteristics

A democratic, member-benefit organisation where the members are people who use the goods, services or facilities provided. Consequently consumer co‑operatives are usually self-financing by their members paying for those goods or services. Membership is open to all those who wish (and are able) to use the services on offer.

In common with other forms of co‑operative, control is normally exercised on a one member, one vote basis; the governing body is elected by and from the membership; and - although operated fundamentally as a business - there is a strong commitment to social welfare, sustainability, and support for the community.

Fully mutual co‑operatives only deal with their own members (e.g. housing co‑operatives, credit unions). Non-mutual co‑operatives (e.g. retail co‑operatives) will deal with non-members as well as members.

Ownership: a consumer co‑operative is owned by its customer-members.

Charitable status: a consumer co‑operative will not be eligible for charitable status.

Examples of Use

The term "consumer co‑operative" is particularly applied to those giants of the co‑operative movement, the retail co‑operative societies (i.e. "the Co‑op" shops, pharmacies, travel agents, undertakers etc).

However the term may more generally be applied to any consumer-run co‑operative enterprise, e.g. parent-run childcare facilities, tenant-run housing co‑operatives, credit unions.

Legal Forms Used

Traditionally consumer co‑operatives have registered as industrial and provident societies, but it is possible to design a similar co‑operative structure as a company.

Very small consumer co‑operatives which do not feature profit distribution may occasionally structure themselves as associations.

Profit Distribution

Participation may be rewarded by a return on each member's contribution to the co‑operative - the more a customer has spent, the more she or he receives back as a dividend. Retail co‑operatives traditionally pay such dividends; housing co‑operatives traditionally do not. As consumer co‑operatives are usually financed by members' payments, any distribution of financial surplus may simply be seen as a rebate of money overpaid.

A mutual co‑operative may reward its members by reducing charges rather than paying out dividends.

Participation Issues 

A consumer co‑operative is generally appropriate where a group of people (or organisations) have a common need which can best be met by a joint venture, and the members are prepared to pay for the service they require.

Participation will generally be promoted amongst the membership and by encouraging others to join. Some consumer co‑operatives offer the members additional services or benefits to make membership even more attractive and meaningful. For example, Japanese retail co‑operatives often network their members around health and fitness issues.

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