Consumer Purchasing

1
Consumer Purchasing Protection

• Chapter 4

2
What Youll Learn

• When you have completed this chapter, you will be
  able to
• Determine the factors that influence buying
  decisions
• Explain a research-based approach to buying goods
  services
• Identify strategies for making wise buying
  decisions
• Identify ways to solve consumer problems
• Describe the legal alternatives for consumers

3
Consumer Purchasing

• What influences you to make a purchase?
• Trade-offs buying decisions
• Ex. Buying on credit allows you to obtain the
  product nowit will be more expensive in the long
  run due to interest charges
• Researching Consumer Purchases
• Four phases of buying
• Before you shop
• Weighing alternatives
• Making the purchase
• After the purchase

4
Influences on Consumer Buying Decisions (Figure
4.1) What are the economic, social, and personal
factors that would influence you if you were
going to buy a car?
Economic Factors Social Factors Personal Factors
Prices Lifestyle Gender
Interest rates Interests Age
Product quality Hobbies Occupation
Supply demand Friends Income
Convenience Culture Education
Product safety Advertisements Family size
Brand name Media Geographic region
Maintenance costs Ethnic background
Warranty Religion
5
Phase 1 Before you shop

• Identifying you needs
• Does it have to be name brand or can it be
  generic?
• Gathering information
• Becoming aware of the marketplace
• Completing these steps will enable you to get
  what you really want

6
Phase 2 Weighing the Alternatives

• Every consumer decision may be approached in
  several ways
• Instead of buying an item, what could you do
  instead?
• Identify what is important to you features,
  performance, design
• Compare prices
• Do comparison shopping

7
Phase 3 Making the Purchase

• Negotiate the price
• Decide on credit or cash consider the costs
  benefits of each
• Before deciding on credit, evaluate its costs,
  such as interest rates fees
• Down payment portion of total cost that must be
  paid at time of purchase
• Know the real price any extra costs
  (installation, delivery, etc.)

8
Phase 4 After the Purchase

• Any other costs or tasks?
• Ex. Additional maintenance ownership costs like
  insurance on car
• Learn how to operate the product correctly in
  order to avoid major repairs
• Learn the policy for returns or replacement of
  product

9
Smart Buying Strategies

• How can you make an informed purchase decision?
• Timing purchases seasonal deals
• Store selection
• Cooperative
• Brand comparison Generic vs. Name brand
• Impulse buying purchasing items on the spur of
  the moment can be more expensive

10
Label information research

• Labels often include a great deal of advertising
• Federal laws also require labels present factual
  information
• Labels on processed foods must have nutritional
  information
• Open dating helps determine freshness of some
  foods

11
Price comparison

• Unit pricing standard unit of measurement to
  compare the prices of packages that are different
  sizes
• Rebate partial refund of the price of a product
• Have to submit a form, the original receipt, and
  the packages UPC symbol, or bar code

12
Warranty evaluation

• Warranty written guarantee from manufacturer
  that states the conditions under which the
  product can be returned, replaced, or repaired
• Types of warranties
• Implied unwritten guarantees that cover certain
  aspects of the product or its use
• Express full or limited warranty will fix or
  replace product or parts

13
Service contract

• Separately purchased agreement by the
  manufacturer or distributor
• Cover costs of repairing the item
• Sometimes have extended warranties
• You have to pay extra for service contract

14
Resolving Consumer Complaints (4.2)

• Sources of consumer complaints
• Most customer dissatisfaction results from
  products that are defective or of poor quality
• Results in unexpected costs, deceptive pricing,
  and unsatisfactory repair service.

15
Fraud

• Dishonest business practices that are meant to
  deceive, trick, or gain an unfair advantage
• Types of fraud
• Telephone and mail scams may offer you phony free
  prizes, travel packages, work-at-home schemes,
  and investment opportunities
• Best way to protect yourself from consumer fraud
  is to recognize it before you become a victim

16
Resolving differences between buyers sellers

• Return to the place of purchase
• Contact company headquarters
• Consumer agency assistance
• Government agencies
• Dispute resolution
• Mediation attempt by a neutral 3rd party to
  solve problemnot legally binding
• Arbitration conflict is resolve by 3rd party
  and is legally binding

17
Legal options for consumers

• Small claims court court that deals with legal
  disputes that involve amounts below a certain
  limit
• Class action suits legal action on behalf of
  all people who have suffered same injustice
• Other legal alternatives
• Legal aid society network of community law
  offices that provide free or low-cost legal
  assistance. Not everyone is eligible for this
  servicebased on income