Presentation Transcript

1. Consumer Information & Action Consumer Rights & Responsibilities Consumer Protection Consumers Beware Making Choices
2. Tammy has rented a DVD from Hollywood Video. She then proceeds to softball practice, leaving the DVD to bake in the car for two hours. When Tammy gets home to watch the DVD, it doesn’t function properly.
3. *Consumer Rights & Responsibilities* YOU! WHO is your first line of defense against consumer fraud and deception? WHO must seek assistance when a violation of consumer rights has occurred? WHO must contact the appropriate agency in order to seek assistance and advice? WHO has rights and responsibilities as a consumer?
4. What is the Consumer Movement? Developed to protect the consumer
5. What makes the Consumer Movement successful? Poor economic conditions Scandals/fraud Active participation by all players
6. Four Key Players in the Consumer Movement Sellers Government Consumer Organizations Consumers
7. What Do We Want Today? Increased quality & info of products Consumer Reports The Consumers Union Environmental Groups Objective & useful info Consumer Reports Better Business Bureau Resolving consumer problems & strengthening redress systems
8. The Consumer Bill of Rights John F. Kennedy The Right to Safety The Right to be Informed The Right to Choose The Right to be Heard The Right to Redress The Right to Consumer Education The Right to a Healthy Environment
9. The Consumer Bill of Rights The Right to Safety Protection against products that are hazardous to health/life
10. The Consumer Bill of Rights The Right to be Informed Against fraud/deceit The assurance of receiving the necessary facts to make an informed choice
11. The Consumer Bill of Rights The Right to Choose Access to a variety of quality products and services The right to buy what you want at a fair price
12. The Consumer Bill of Rights The Right to be Heard Assurance of representation against government Help in the formulation of policies
13. The Consumer Bill of Rights The Right to Redress The right to complain, and achieve satisfaction from the complaint process
14. The Consumer Bill of Rights The Right to Consumer Education Receive the necessary education and assistance to use resources efficiently
15. The Consumer Bill of Rights The Right to a Healthy Environment At home and while out and about
16. Your Consumer Rights Ensure Quality products Product knowledge No Monopolies Your opinions matter Customer satisfaction Being informed Green movement
17. SOURCES OF ASSISTANCE Federal Agencies Private Agencies State/Local Assistance
18. Federal Agencies USDA – U.S. Dept. of Agriculture FDA – Food & Drug Administration CCCS – Consumer Credit Counseling Service CPSC – Consumer Product Safety Commission FCC – Federal Communications Commission FTC - Federal Trade Commission
19. Federal Agencies USPSIS – U.S. Postal Inspection Service FAA– Federal Aviation Administration NIST – National Institute Standards & Tech SEC – Securities Exchange Commission FCIC – Federal Citizen Information Center NTIA – National Telecom & Info Administration
20. Notable Federal Acts Food, Drug, and Cosmetic Act Hazardous Substances Labeling Act  Cigarette Labeling and Advertising Act Child Protection and Toy Safety Act
21. Notable Federal Acts Wool Products Labeling Act Poultry Products Inspection Act Flammable Fabrics Act National Traffic and Motor Vehicle Safety Act
22. Private Organizations BBB – Better Business Bureau Business sponsored, not government
23. Private Organizations MACAP – Major Appliance Consumer Action Panel Represents consumer in the purchase and use of home appliances
24. Private Organizations Consumer Advocates Promote and/or protect the causes of interest of consumers
25. State/Local Assistance County/city governments Public interest groups Independent consumer groups Newspapers, TV, other media
26. Consumer Protection Contracts Promises Warranties
27. Consumer Protection Contracts – An agreement between two or more parties Must be 18 yrs. old +
28. Consumer Protection Promises – Declaration that something will or will not happen in the future Create moral, not legal obligations
29. *Consumer Protection* Warranties – A promise that a product will perform in a specified manner
30. Implied Warranties Implied Warranty– unspoken and/or unwritten promises made by a seller to a buyer that the item being sold works Implied Warranty of Merchantability Implied Warranty of Fitness
31. Implied Warranties Implied Warranty of Merchantability - the promise that the product sold is in good working order and will do what it is supposed to do Implied Warranty of Fitness (for a particular purpose) - the promise that the seller’s advice on how to use the product will be correct
32. Express Warranties Express Warranty - an explicit written and/or verbal offer made voluntarily by the seller that a product will perform according to particular expectations Full Warranty Limited Warranty
33. Express Warranties Full Warranty – if the product malfunctions, is defected or does not conform with the written warranty, the seller must remedy the product free of charge within a reasonable amount of time by repair, replacement, or refund Limited Warranty - specifies under what conditions, to what extent, and for how long the manufacturer of an item guarantees that it will perform as claimed
34. Extended Warranties Extended Warranty – a prolonged warranty in addition to the original warranty, usually costs extra, and certain exclusions often apply (normal wear and tear, owner abuse, and “acts of God”) Common for automobiles and electronics Also called a Service Contract
35. “As Is” Goods “As Is Goods - goods that do not require the seller to offer any warranty, the seller is required to make clear to consumers that the product is being sold in less than prime condition and that the consumer assumes all responsibility for any faults and flaws Some states prohibit this practice, Illinois is NOT one of them
36. Amy agreed to go to the homecoming dance with Mike. Later Steve, the captain of the football team, asked Amy to be his date for the dance. Amy broke her date with Mike to go out with Steve instead. Does Mike have a legal claim against Amy? Why or why not?
37. Bait & Switch Referral Sales Fake Sales Low Balling Pyramid Schemes *CONSUMER BEWARE*Fraudulent & Deceptive Marketing Practices Pigeon Drop Fraudulent Representation Health & Medical Product Fraud Infomercials
38. Bait and Switch A marketer advertises a very attractive price that is designed to draw customers. Once the customer comes into the store the advertiser will attempt to sell the customer a more expensive product (the "switch").
39. Fake Sales When a store places a high "regular" price on an item, then deeply discounts it to try to make customers think they're getting a bargain. in some cases the discount amount is very small or is in fact still higher than a competitor’s regular price.
40. Fraudulent Representation Making a false statement about a material fact, with the full knowledge the statement is false Intention is to make another person believe a false statement in order to get that person to enter a contract or sales agreement
41. Health & Medical Product Fraud Fraudsters prey on their victims by tricking them into believing they will receive an approved form of alternative medicine at a lower price than comparable legitimate products Ex: Miracle products with miracle cures
42. Low-Balling A persuasion and selling technique in which an agreed upon item or service is offered at a lower price than is actually intended to be charged After a customer feels attached or committed to the product or service being offered, the seller adds items or services to the original order which raises the price for the customer and increase profits for the seller
43. Pigeon Drop In the pigeon drop scam, swindlers work in pairs or teams. One befriends an unsuspecting consumer, the "pigeon," while the other approaches them with money or valuables he claims to have just found. After some rehearsed conversation, the con artists agree to split the money three ways with you and arrange to meet at a lawyer's office or somewhere else of their choosing.
44. Pigeon Drop (continued) But can they trust you, they ask. To get your share, you'll need to put up some "good faith" money, which they will return to you after the goods are divided. To prove yourself trustworthy, you turn over a large sum of money to them and later go to meet them at the designated spot. Soon after arriving, you realize the pair is long gone -- and so is your money.
45. Pyramid Schemes It starts with one person - the initial recruiter This person recruits a second person, who is required to “invest” money which is paid to the initial recruiter
46. Pyramid Schemes (continued) The new recruit must recruit more people to “invest” to make his or her money back The process continues until the base of the pyramid can NOT support the top of the pyramid The initial recruiter(s) keep their money while everyone else loses theirs
47. Referral Sales When a consumer is persuaded to buy goods or services by promises of a rebate, commission, or other benefit for supplying information that helps the trader sell to other consumers The consumer does not get the promised benefit unless some other event happens after the agreement is made
48. Infomercials Failure to promptly deliver the product in a timely manner, if at all. Excessive or artificially inflated shipping and handling charges. Failure to provide the quality or characteristics advertised.
49. Infomercials (continued) Failure to deliver the quality construction or workmanship promised. Difficulty returning or receiving a refund. Difficulty communicating with customer service.
50. *Making Choices* We are constantly making decisions about wants and needs Obtain & evaluate accurate information Compare alternatives Take Action Re-evaluate
51. PERSONAL FACTORS Personal resources – time, money, energy, skills Position in life – Age, gender, martial status, lifestyle, employment status Cultural factors – background, customs, religion Values and goals Making Choices – InfluencesPersonal Factors
52. OUTSIDE FACTORS Economy – interest rate, inflation, general condition Technology - advances Environment – actions to clean up and prevent damage Social pressures - media Making Choices – InfluencesOutside Factors
53. ANY PURCHASES Information for your purchase should be: Accessible Current Factual Unbiased Making Choices –Influences
54. MAJOR PURCHASE FACTORS Why? How long will I use this product? Substitutes? Can it be postponed? Additional costs? Other purchases instead? What is the total cost of this product? Making Choices – Influences
55. Displays Contests/Games Coupons Packaging Sampling/Give-a-ways Rebates Direct Mail Marketing Print Media How much do these techniques influence your decision to buy? Making ChoicesPromotional Techniques & Incentives
56. Pricing $1.99, $2.98 5/$1.00 instead of $.20 each Sales End of season, end of month, anniversary and holiday sales Buy One, Get One Free Clearance merchandise or going out-of-business Door Busters Ex: Black Friday Making ChoicesMarketing Influences
57. *Advertising* Target Market—the specific group of people we are trying to aim at: Age Gender Income Ethnicity Lifestyle Interests
58. Function of Advertisements Educational Informative Economic Social Value
59. Types of Advertisements Product/Consumer Advertising Specific product at specific group of people Ex: Trix Cereal, HoverRound Selective/Comparative Advertising No particular product, just choose our company Ex: Ford vs. Chevy, McDonald’s vs. Burger King Primary Advertising General product, no specific company Ex: Milk, Beef, Cotton
60. Types of Advertisements Newspapers & Magazines Radio Television Direct Mail or Junk Mail Outdoor Media Internet *Are we Influenced by media?
61. Elements of Print Media Logo Artwork/Picture Description Optional elements Copy White Space Price
62. Celebrity Endorsements Do they actually have to claim use of the product?
63. Cost & Effectiveness The average production cost for a 60 second TV spot is: $30,000 - $70,000
64. Cost & Effectiveness Do you really NEED it?
65. If it sounds to good to be true?
66. Does this have the same meaning? This study proves that Acetaminophen use causes Asthma … OR Studies suggest that the use of Acetaminophen is linked Asthma…
67. False or Misleading Advertisements What did the DOT say?
68. Protect Yourself from Unfair Sales Practices Know what you want in a purchase beforehand and insist on it!
69. Unordered Products If you receive unordered products they are yours for the keeping and the business cannot expect payment
70. Cooling Off Period (FTC) You have 3 days to change your mind Door to door, phone solicited sales Applies to Purchases over $25
71. Advertisements Now that you are aware of the persuasive methods of advertisers… Use this information to become a wiser consumer!
72. Advertising Project