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Consumer Purchasing & ProtectionChapter 4
04/21/23
1
What You’ll 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
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Consumer Purchasing• What influences you to make a purchase?
• Trade-offs & buying decisions• Ex. Buying on credit allows you to obtain the product
now…it will be more expensive in the long run due to interest charges
• Researching Consumer Purchases• Four phases of buying
1. Before you shop2. Weighing alternatives3. Making the purchase4. After the purchase
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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
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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
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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
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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.)
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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
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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
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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
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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 package’s UPC symbol, or bar code
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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
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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
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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.
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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
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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
problem…not legally binding• Arbitration – conflict is resolve by 3rd party and is legally
binding
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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 service…based on income
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