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
