Chapter 4 Consumer Purchasing and Protection

Consumer Purchasing Section 4.1

Factors That Influence Buying Decisions Economic Factors Ex. Prices Social Factors Ex. Hobbies Personal Factors Ex. Gender

Influences on Consumer Buying Decisions

Research-Based Buying Approach— 4 phases 1.Before you shop Identify your wants/needs Gather information and know the market place 2.Weighing alternatives Compare products, prices, brands, and sellers

Research-Based Buying Approach— 4 phases (Cont’d) 3.Making the purchase Payment options: cash or financing (interest rate, down payment*) Negotiate price, know the real price 4.After the purchase Ongoing costs (maintenance, etc.) Changes in needs Down payment—a portion of the total cost of an item that must be paid at the time of purchase

6 Smart Buying Strategies 1. Timing Purchases Consider supply/demand Wait for sales Buy out of season 2. Store selection Type of store In store or Online

6 Smart Buying Strategies 3. Brand Comparison Name brand vs. store brand (aka generic) Consider price and quality Shop with a list to avoid impulse buying* Impulse Buying—purchasing items on the spur of the moment

6 Smart Buying Strategies 4. Label Information Research Look past advertising Food labels Ex. “Low fat”, “All natural” Expiration date Open dating* Product efficiency on appliances Open dating—a labeling method that indicates the freshness, or shelf-life, of a perishable product, such as milk or bread

6 Smart Buying Strategies 5. Warranty* Evaluation Types of Warranties: Implied—unwritten Full or Limited Express—written Extended aka Service Contract Warranty—a written guarantee from the manufacturer or distributor that states the conditions under which the product can be returned, replaced, or repaired Service Contract—a separately purchased agreement by the manufacturer or distributor to cover the costs of repairing the item

Money Rules #41

6 Smart Buying Strategies Rebate—a partial refund of the price of a product Unit pricing—the standard unit of measurement to compare the prices of packages that are different sizes

6 Smart Buying Strategies

Common Consumer Complaints Defective Poor quality Unexpected costs Deceptive pricing Unsatisfactory repair service Fraud* Fraud—dishonest business practices that are meant to deceive, trick, or gain an unfair advantage

Tips for Protecting Yourself Only do business with companies that have good reputations Avoid signing contracts you do not understand Watch out for offers that seem to good to be true