1. Consumer Purchasing Strategies and Legal Protection Chapter 4

2. Factors That Influence Buying Decisions l Economic Factors – Prices, Convenience, Product Quality l Social Factors – Lifestyle, Interests, Friends, Culture, Media, TV l Personal Factors – Gender, Age, Occupation, Income, Education, Ethnic, Geographic region

3. Consumer Purchasing: A Research-Based Approach l Doing research enables you to get more for your money l Spending a little time researching will save you money l A research-based approach has four phases

4. Phase 1: Before You Shop l Three Steps 1. Identify your needs 2. Gathering Information l People, Ads, Reports/Magazines, Web sites 3. Becoming aware of the marketplace

5. Phase 2: Weighing the Alternatives l Decide what’s important to you l Compare Prices l Do Some Comparison Shopping

6. Comparing Prices l Unit pricing-use of a standard unit of measurement to compare the prices of packages that are different sizes. l Divide the price of the item by the unit of measurement l The best unit price may not be your best purchase

7. Phase 3: Making the Purchase l Can you negotiate the price? – What items can you usually negotiate? l Should you use cash or credit? – Down Payment-Portion of the total cost of an item that must be paid at the time of purchase l Do you know what the real price is? – Installation, delivery – Get all costs in writing

8. Phase 4: After the Purchase You may have to – learn how to use your new item – Return the item/Complain

9. Assignment Comparison Shopping Assignment

10. Smart Buying Strategies

11. Timing Purchases l Supply and Demand – When does an item cost the most? l Sales l Competition

12. Selecting the Store l Quality and variety of goods l Hours, location, prices, reputation, policies, parking, delivery l Cooperative-a non profit organization owned and operated by its members for the purpose of saving money l Direct Selling-mail order, TV home shopping, online shopping (shipping & handling fees)‏

13. Comparing Brands l Brand name products widely advertised, widely available l Store brands-carries the name of the chain on its label (usually less expensive)‏ l Compare price and quality l Impulse buying- purchasing items on the spur of the moment

14. Label Information l Packages contain advertising and information l Food labels must indicate – Common name, address of the manufacturer, net weight, list of ingredients, nutritional information l Foods must meet government criteria to be labeled “low in fat”… l Open Dating-Indicates the freshness or “shelf life” of a perishable product l Labels for appliances include information about operating costs

15. Comparing Prices Continued l Two common ways to save money – Discount coupons – Manufacturers Rebates l Rebate-a partial refund of the price of a product

16. Comparing Prices Guidelines l More Convenience=Higher Prices l Ready-to-use Products=Higher Prices l Large packages are usually the best buy-use unit pricing l Sale may not always mean you save money

17. Evaluating Warranties l Warranty-A written guarantee of quality from the manufacturer or distributor that states the conditions under which the product can be returned, replaced or repaired. l Two Types: Implied-Unwritten guarantee that covers certain aspects of a product or its use Express-Full or limited l Service Contract-Separately purchased agreement to cover the costs of repairing the item.

18. Assignment l Section 4.1 Assessment Page 104 l 1-6 l Warranty Assignment

19. Resolving Consumer Complaints Section 4.2

20. Sources of Common Consumer Complaints l Every purchase involves some degree of risk l Defective or poor quality l Unexpected costs, deceptive pricing l Fraud-dishonest business practices that are meant to deceive, trick, or gain an unfair advantage

21. Common Types of Fraud l Fraud costs consumers tens of billions of dollars l Telephone and mail scams l Travel scams, work-at-home schemes, investment opportunities l Medical scams l Recognize scams and report them l FTC Guidelines FTC Guidelines

22. Resolving Differences Between Buyers and Sellers l Make sure to document the process l Keep receipts, names of people you talk to, dates of attempted repairs, copies of letters you wrote, any fees you have paid l Usually can be handled in five different ways

23. Five Ways to Resolve Complaints 1. Return to the place of purchase – Businesses care about reputation for honesty and fairness. – Bring receipts and other information – Keep calm and reasonable 2. Contact Company Headquarters – Send letter or call company customer service line

24. Five Ways to Resolve Complaints 3. Get help from a Consumer Agency – Better Business Bureau – Go to: http://wisconsin.bbb.org/consumers/ http://wisconsin.bbb.org/consumers/ – Food and Drug Administration 4. Dispute Resolution – Mediation-the attempt by a neutral third party to resolve a conflict between a customer and a business 5. Take Legal Action – If all else fails

25. Assignment Complaint Letter

26. Legal Options for Consumers When all else fails

27. Small Claims Court l A court that deals with legal disputes that involve amounts below a certain limit. l From $500 to $10,000 l Usually don’t involve juries or lawyers=Low cost l Judges decision is final

28. Class-Action Suits l A legal action on behalf of all the people who have suffered the same injustice. l Group of people represented by one lawyer or group of lawyers l Money awarded is divided among all involved or put into government funds

29. Hiring a Lawyer Find a lawyer with experience in your type of case Ask about fees/payment policies Legal aid society-network of community law offices that provide free or low- cost legal assistance Not everyone is eligible

30. Legal Issues Questions 1. What is the limit for small claims court in Wisconsin? 2. What cases can you use small claims court for? 3. Tell me three class action law suits. What year were they in and what was the reward? 4. Find a lawyer in the area who deals with: – Personal Injury – Medical 5. What does a clerk of courts do? 6. Who is the Marathon County Clerk of courts? 7. Who are the judges in Marathon and Clark Counties.

31. Assignment Section 4.2 Assessment Page 113 1-6