Chapter 6 terms

small claims court

a court that deals with legal disputes that involve amounts below a certain limit

class-action suit

a legal action on behalf of all the people who have suffered the same injustice

legal aid society

a network of community law offices that provide free or low-cost legal assistance

rebate

a partial refund of the price of a product

down payment

a portion of the total cost of an item that must be paid at the time of purchase

arbitration

a process whereby a conflict between a customer and a business is resolved by an impartial third party whose decision is legally binding

service contract

a separately purchased agreement by the manufacturer or distributor to cover the costs of repairing the item

warranty

a written guarantee from the manufacturer or distributor that states the conditions under which the product can be returned, replaced, or repaired

store selection alternatives

cooperative direct selling (mailorder, TV shopping, online shopping)

Phase 4: After the Purchase

costs and tasks that follow

fraud

dishonest business practices that are meant to deceive, trick, or gain an unfair advantage

factors that influence buying decisions and examples

economic factors - prices, interest rates, product quality social factors - lifestyle, interests, hobbies personal factors - gender, age, occupation

label information research

food labels: government regulated open dating

When is the lowest price generally the wisest choice?

If there aer two identical items that are priced differently, the lower price is generally the wisest choice

give one advantage and disadvantage of direct selling

+ convenience of not having to leave home - paying for shipping and handling, difficulty in returning purchases

give one advantage and one disadvantage to shooping at a cooperative

+ lower prices for its members - offer few customers services

Smart buying strategies

- Timing purchases - Store selection - Brand Comparison: Consider price and quality when deciding - Label information research: regulated by law, information must be factual - price comparison - warranty evaluation

Phase 2: weighing the alternatives

- identify waht is important to you - compare prices - do comparison shopping

Phase 1: Before you shop

- identify your needs - gather information - be aware of the marketplace

Phase 3: Making the Purchase

- negotiate the price: real estate and cars - compaaring financing options - know the real price

difference service contract

- sometimes called extended warranties but they are not really warranties - you have to pay a fee to obtain a service contract - generally offered on large, expenseive items such as cars and home appliances

implied warranties

- unwritten guarantees that cover certain aspects of a product or its use - a product is fit for its use example: a toaster will toast bread, CD player will play CDs

express warranties

- usually written, come in two forms: full and limited - full warranty states that a defective product will be fixed or replaced at no charge during a reasonable amount of time - limited warranty covers only certain aspects of the product, such as parts

a research based approach to buying has 4 phases

1. before you shop 2. weighing alternatives 3. making the purchase 4. after the purchase

open dating

A labeling method that indicates the freshness, or shelf life, of a perishable product, such as milk or bread.

wise shopping involves impulse buying? T/F

F

marginal cost and marginal benefit

if two identical items are priced differently, the marginal benefit increases when the lower priced option is selected. if the items were similar but not identical you would have to assess the costs and benefits of purchasing each item.

types of warranties

implied and express

if I choose the less expensive item is the Marginal Benefit going to increase or decrease?

increase

what is the role of a small caims court?

it deals wiht legal disputes that involve amounts below a certain limit

What role does the Better Business Bureau play?

it deals with complaints against local merchants

who settles the claims in a small claims court?

judge

When is a good time to find a good price on a seasonal item?

midseason

brand comparison

national brands, store brands / generic

who settles disputes in mediations and arbitrations?

neutral third party

What are 3 common reasons for consumer complaints

poor quality, defective, unexpected costs

what 2 things should be considered when comparing brands?

price and quality

impulse buying

purchasing items on the spur of the moment

ways to avoid fraud?

recognize it before you become a victim report it if you see it happening

mediation

the attempt by a neutral third party to resolve a conflict between a customer and a business through discussion and negotiation

unit pricing

the use of a standard unit of measurement to compare the prices of packages that are different sizes

trade - offs and buying decisions

to make the omst of your buying power, consider trade - offs

price comparison

unit pricing for "apples to apples" comparison

when comapring unit prices what must be the same?

units of measure