Foundations of Personal Finance Ch. 13 © Goodheart-Willcox Co., Inc.

13 Smart Shopping Basics © Goodheart-Willcox Co., Inc.

Chapter Objectives Evaluate various types of sellers in the marketplace. Identify reliable sources of consumer information. Describe shopping tools for consumers. List guidelines for making rational shopping decisions. © Goodheart-Willcox Co., Inc.

Places to Shop The marketplace is where buyers and sellers meet to exchange goods, services, and money It is made up of many sellers and places to shop; each place has different characteristics Choosing from so many alternatives can be challenging continued © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 Places to Shop Neighborhood stores Shopping centers Downtown shopping areas At-home shopping © Goodheart-Willcox Co., Inc.

Types of Sellers Retail stores: Department stores Specialty stores Superstores and warehouse clubs Discount stores Factory outlets Resale shops continued © Goodheart-Willcox Co., Inc.

Types of Sellers Nonstore sellers: Direct marketers sell goods and services in different ways and from different locations Check reliability and legitimacy of sellers before buying © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 Nonstore Sellers Door-to-door salespersons Catalogs Telemarketing T-commerce E-commerce Internet auctions Consumer cooperatives Vending machines © Goodheart-Willcox Co., Inc.

Consumer Information Sources Foundations of Personal Finance Ch. 13 Consumer Information Sources Knowing how to find, evaluate, and use available information can help you become a smarter shopper © Goodheart-Willcox Co., Inc.

Other Consumers Friends, relatives, neighbors, and other people you know are good information sources Consumer reviews of products and services on the Internet provide comparisons and ratings © Goodheart-Willcox Co., Inc.

Advertisements Advertising is intended to promote and sell goods and services Most ads contain some useful information; they may introduce new products and services keep you up-to-date on existing products give changing price information tell where to find advertised items © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 Labels and Hangtags Contain information about content, quality, performance, care, and maintenance of products clothing, food, and drug facts required by law © Goodheart-Willcox Co., Inc.

Testing and Rating Services Foundations of Personal Finance Ch. 13 Testing and Rating Services Two common forms: Seals of approval or certifications issued by organizations that test products; products that meet standards are labeled Ratings in consumer publications continued © Goodheart-Willcox Co., Inc.

Testing and Rating Services Before using testing and rating info, ask Who sponsored or conducted the testing? What features and performance standards were tested? Under what conditions were tests run, and what test methods were used? What do the test results mean? When were products tested, which models were included? © Goodheart-Willcox Co., Inc.

Salespersons Knowledgeable salespeople can tell you how different brands and models compare what features are most important when new merchandise is expected when sales are scheduled Their job is to sell merchandise as well as please the customer continued © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 Salespersons You are likely to get better service if you are fair and considerate to salespersons © Goodheart-Willcox Co., Inc.

The Internet Use the Internet to compare product prices, features, availability check the reliability of sellers order merchandise access private and government agencies that protect consumers file complaints © Goodheart-Willcox Co., Inc.

Making Shopping Decisions Every shopping decision has an opportunity cost Smart shoppers use rational decision making know their needs, goals, and resources have a spending plan (budget) for routine shopping and big purchases © Goodheart-Willcox Co., Inc.

General Shopping Tips Deal only with reliable businesses and business people Compare products, services, and places to shop Consider the value of your time and energy Do your homework before buying continued © Goodheart-Willcox Co., Inc.

General Shopping Tips Report unfair or dishonest business practices Handle money with care whether you shop with cash or credit Deal fairly and honestly with others © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 In Your Opinion Can you think of other shopping tips besides those mentioned? © Goodheart-Willcox Co., Inc.

Shopping for Goods Check products carefully Read labels, hangtags, seals, manuals Look for information about price, quality, and performance features Consider extra costs for delivery, installation, upkeep, and servicing continued © Goodheart-Willcox Co., Inc.

Shopping for Goods For certain goods, it pays to buy in quantity; only buy what you can use and store You may be able to save money by comparison shopping © Goodheart-Willcox Co., Inc.

Warranties A written warranty provides specific remedies if a product does not perform as promised Consumers have a right to read warranty promises before they buy Most warranties cover products for a stated period of time continued © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 Warranties Warranties do not protect against failure caused by customer misuse of a product continued © Goodheart-Willcox Co., Inc.

Warranties Full warranty Limited warranty Free repair or replacement No unreasonable demands on customers Transfer of coverage to new owner Limited warranty Provides service, repairs, and replacements only under certain conditions May not cover replacement continued © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 Warranties Most products carry unwritten implied warranties Implied merchantability means the product does what its name implies Implied fitness means a product must be fit for any performance or purpose promised by the seller © Goodheart-Willcox Co., Inc.

Extended Warranties For an additional cost, you can buy an extended warranty when you buy major appliances, autos, or electronic products They can be expensive and may offer more protection than you need © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 Used Merchandise Save money by buying used instead of new items such as furniture sports equipment baby clothing musical instruments autos continued © Goodheart-Willcox Co., Inc.

Used Merchandise Used goods are usually sold as is, so examine them before buying Make sure a child or baby item wasn’t recalled due to a safety hazard Offers of free furniture and other items may be posted on Web sites and in local newspapers © Goodheart-Willcox Co., Inc.

Shopping for Services Unlike goods, services cannot be inspected and handled before buying Since you aren’t sure what you will get when you buy a service, it’s important to check the reputation of the business Ask former customers if they were satisfied continued © Goodheart-Willcox Co., Inc.

Foundations of Personal Finance Ch. 13 Shopping for Services Investigate qualifications Get written estimates Give clear and complete description of desired service © Goodheart-Willcox Co., Inc.

Work Orders and Contracts Work orders and contracts are common when buying services on a car or home, or for services performed over a period of time Signed contracts are used for expensive or lengthy jobs continued © Goodheart-Willcox Co., Inc.

Work Orders and Contracts Foundations of Personal Finance Ch. 13 Work Orders and Contracts Inspect the work before paying in full or signing off; don’t pay the full cost up front © Goodheart-Willcox Co., Inc.

Shopping at Sales Don’t let sales tempt you to buy what you don’t want or need Look for flaws that will affect the use of a product Consider cleaning or repair costs Check store policies on sale items Know when to expect price cuts and plan to shop then © Goodheart-Willcox Co., Inc.

The Right of Refusal In a market economy, consumers strengthen demand for what they buy and weaken demand for what they refuse By intelligently using their power, consumers protect their financial interests and make the economy work © Goodheart-Willcox Co., Inc.

Central Ideas of the Chapter To save money and build wealth, you must spend less than you earn. Being a smart shopper helps you accomplish that. Shopping choices are almost endless. Weighing the choices carefully involves rational decision making. © Goodheart-Willcox Co., Inc.

Glossary of Key Terms Back advertising. A paid message touting the attributes of something in order to convince consumers to buy it. comparison shopping. The process of gathering information about products and services to get the best quality or usefulness at the best price. © Goodheart-Willcox Co., Inc.

Glossary of Key Terms Back consumer cooperative. A nonretail association owned and operated by a group of members for their own benefit rather than for profit. e-commerce. Buying and selling goods and services online. extended warranty. A contract that provides for the servicing of a product, if needed, during the term of the contract. © Goodheart-Willcox Co., Inc.

Glossary of Key Terms Back full warranty. Provides for free repair or replacement of the warranted item or part if any defect occurs while the warranty is in effect. implied fitness. An unwritten warranty that guarantees a product is fit for any performance or purpose promised by the seller. © Goodheart-Willcox Co., Inc.

Glossary of Key Terms Back implied merchantability. An unwritten warranty that guarantees a product is what it is called and does what its name implies. limited warranty. Provides service, repairs, and replacements only under certain conditions. © Goodheart-Willcox Co., Inc.

Glossary of Key Terms Back nonstore sellers. Also called direct marketers, they sell goods and services in different ways and from different locations. They include door-to-door salespersons, catalogs, telemarketers, electronic sales via television or Internet, consumer cooperatives, and vending machines. peer pressure. The power a social group has over someone who seeks the group’s approval and acceptance. © Goodheart-Willcox Co., Inc.

Glossary of Key Terms Back retail stores. Stores that sell goods or services directly at their place of business. t-commerce. Shopping done on the television. telemarketing. A form of selling that generally involves the seller calling you on the telephone to sell goods or services. © Goodheart-Willcox Co., Inc.

Glossary of Key Terms Back warranty. A guarantee that a product will meet certain performance and quality standards. work order. A request for service; also includes a description of work to be done. © Goodheart-Willcox Co., Inc.