Ch.8: Consumer Purchasing Strategies and Legal Protection Flashcards
What are five economic factors that impact consumer buying activities?
- Inflation
- Interest rates
- Tax rates
- Government regulations
- Product safety
What are six social factors that impact consumer buying activities?
- Lifestyle
- Interests
- Hobbies
- Peer group
- Culture
- Advertising media
What are seven personal factors that impact consumer buying activities?
- Gender
- Age
- Occupation
- Income
- Education
- Marital status
- Family size
What is the difference between comparison shopping and impulse buying?
Comparison shopping is planned shopping while impulse buying is unplanned shopping.
What does it mean to time your purchases?
It means that you wait for when a certain item goes on sale each year. Ex. Buying holiday items in late December and early January.
What are some strategies to help avoid unneeded purchases?
- Don’t buy an item right away. Delay it to consider its value
- Review delayed purchases in a month to decide if the urge still exists/money is still available.
- Use websites and apps to compare prices and obtain coupons.
- Calculate how many hours you need to work to pay for an item.
What is a cooperative?
A nonprofit organization in which members save money on various products and services. Ex. Food cooperatives allow members to buy in bulk.
What should you be aware of when buying at dollar stores?
- Expired food products
- “Look alikes” posing as famous brands
- Items that are more expensive than sale price as other stores
- Unsafe imported items (ex. extension cords, toys, vitamins, etc)
According to federal law, what must show up on food labels?
- Company name and address
- Ingredients
- Nutrients
- Food allergy warnings
What is open dating?
The date that describes the freshness or shelf life of a perishable product. Ex. Use before May 9th
True or False. Expiration dates relate to quality rather than safety.
True. Items that are past the sell by date are likely still safe for consumption. Canned or packaged foods will usually stay safe beyond the expiration date.
What is unit pricing? How do you calculate it?
The standard unit of measurement to compare the prices of packages of different sizes. It is calculated by dividing the price by the number of units of measurement (ex. pounds, gallons, number of sheets, etc.)
What is a rebate?
A partial refund of the price of a product
What are five things to remember when comparing prices?
- More store convenience (location, hours, sales staff) usually means higher prices
- Ready to use products have higher prices
- Large packages are usually the best to buy. Compare unit price
- “Sale” may not always mean saving money
- Many websites/apps are available with prices, coupons, and rebates.
What is a warranty?
A written guarantee from manufacturer/distributor that specifies the conditions under which product can be returned, replaced, or repaired.
What are the two forms of an express warranty?
Full warranty and limited warranty
What is a full warranty?
Warranty states that a defective product can be fixed or replaced during a reasonable amount of time.
What is a limited warranty?
Warranty that covers only certain aspects of a product or requires buyer to incur part of the cost for shipping or repairs.
What is an implied warranty?
Warranty that covers a product’s intended use or other basic understandings that are not in writing. Ex. A implied warranty of merchantability gurantees that the product is fit for the ordinary uses that it is intended for.
What does the FTC require used car businesses to do?
They require that businesses who sell used cards to put a buyer’s guide sticker in the windows of the cars for sale. The sticker must state whether or not the car comes with a warranty and, if so, what protection the dealer will provide.
What does the Buyer’s Guide from the FTC encourage you to do?
Have the used car inspected by the mechanic and get all promises in writing.
What are the main conditions of a new car warranty?
- Coverage of basic parts against defects
- Power train coverage for engine, transmission, and drivetrain
- Corrosion warranty
What other conditions are included in a new car warranty?
Whether the warranty is transferable to other owners of the car and details about the charges
What are service contracts?
Agreements between a business and a consumer to cover the repair costs of a product. They protect the buyer from high costs resulting from certain repairs and other losses.
What are the first two things you should do when buying a complex product?
Identify the problem (ex. I need transportation) and gather buying information.
What are five common information sources for buying info?
- Personal contacts (ex. family/friends)
- Business Organizations
- Media sources (ex. televisions, radio, newspapers, magazines, etc.)
- Independent testing organizations (ex. Consumer Union)
- Government agencies
What is the next thing you should do after identifying the problem and gathering info?
Evaluate alternatives. Be sure to ask yourself: is it possible to delay the purchase or do without the item? What method should I use to pay for it? Can I rent the item instead of buying?
In what situations can comparison shopping be beneficial?
- Buying expensive/complex items
- Buying items you purchase often
- The process can be done easily (ex. with advertisements, online, or in a catalog)
- Different sellers offer different prices and services
- Product quality or prices vary greatly
What three categories can optional equipment for cars be viewed as?
- Mechanical devices (things that improve performance like larger engines)
- Convenience options (things that provide convenience like sound systems)
- Aesthetic features (things that add to the vehicle’s visual appeal like metallic paint)
What are four high-tech safety features that newer car models may have?
- Forward Collision Warning
- Automatic Emergency Braking
- Blind spot warning tech
- Adaptive cruise control
- Lane keep assist and lane departure warning
What are some common sources for buying a used car?
- New car dealers
- Used car dealers
- Individuals selling their own cars
- Auctions and dealers that sell previously owned vehicles from businesses, auto rental companies, and gov agencies.
- Used car superstores
- Online used car businesses
What are CPO vehicles?
Nearly new cars with original manufacturer’s guarantee of quality. Is a higher price than other vehicles because of rigorous inspection and repair processes.