© Goodheart-Willcox Co., Inc.. 13 Smart Shopping Basics.


13

Smart Shopping Basics


Chapter Objectives

• Evaluate various types of sellers in the marketplace.

• Identify reliable sources of consumer information.

• Describe shopping tools for consumers.

• List guidelines for making rational shopping decisions.


Places to Shop

• The marketplace is where buyers and sellers meet to exchange goods, services, and money

• It is made up of many sellers and places to shop; each place has different characteristics

• Choosing from so many alternatives can be challenging

continued


Places to Shop

• Neighborhood stores

• Shopping centers

• Downtown shopping areas

• At-home shopping


Types of Sellers

• Retail stores:– Department stores– Specialty stores– Superstores and warehouse clubs– Discount stores– Factory outlets– Resale shops

continued


Types of Sellers

• Nonstore sellers:– Direct marketers sell goods and

services in different ways and from different locations

– Check reliability and legitimacy of sellers before buying


Nonstore Sellers

– Door-to-door salespersons

– Catalogs– Telemarketing– T-commerce

– E-commerce– Internet

auctions– Consumer

cooperatives– Vending

machines


Consumer Information Sources

• Knowing how to find, evaluate, and use available information can help you become a smarter shopper


Other Consumers

• Friends, relatives, neighbors, and other people you know are good information sources

• Consumer reviews of products and services on the Internet provide comparisons and ratings


Advertisements

• Advertising is intended to promote and sell goods and services

• Most ads contain some useful information; they may– introduce new products and services– keep you up-to-date on existing

products– give changing price information– tell where to find advertised items


Labels and Hangtags

• Contain information about – content, quality,

performance, care, and maintenance of products

– clothing, food, and drug facts required by law


Testing and Rating Services

• Two common forms:– Seals of approval or

certifications issued by organizations that test products; products that meet standards are labeled

– Ratings in consumer publications

continued


Testing and Rating Services

• Before using testing and rating info, ask– Who sponsored or conducted the testing?– What features and performance

standards were tested?– Under what conditions were tests run,

and what test methods were used?– What do the test results mean?– When were products tested, which

models were included?


Salespersons

• Knowledgeable salespeople can tell you– how different brands and models

compare– what features are most important– when new merchandise is expected– when sales are scheduled

• Their job is to sell merchandise as well as please the customer

continued


Salespersons

• You are likely to get better service if you are fair and considerate to salespersons


The Internet

• Use the Internet to – compare product prices, features,

availability– check the reliability of sellers– order merchandise– access private and government

agencies that protect consumers– file complaints


Making Shopping Decisions

• Every shopping decision has an opportunity cost

• Smart shoppers – use rational decision making– know their needs, goals, and

resources– have a spending plan (budget) for

routine shopping and big purchases


General Shopping Tips

• Deal only with reliable businesses and business people

• Compare products, services, and places to shop

• Consider the value of your time and energy

• Do your homework before buying

continued


General Shopping Tips

• Report unfair or dishonest business practices

• Handle money with care whether you shop with cash or credit

• Deal fairly and honestly with others


In Your Opinion

• Can you think of other shopping tips besides those mentioned?


Shopping for Goods

• Check products carefully• Read labels, hangtags, seals,

manuals• Look for information about price,

quality, and performance features• Consider extra costs for delivery,

installation, upkeep, and servicing

continued


Shopping for Goods

• For certain goods, it pays to buy in quantity; only buy what you can use and store

• You may be able to save money by comparison shopping


Warranties

• A written warranty provides specific remedies if a product does not perform as promised

• Consumers have a right to read warranty promises before they buy

• Most warranties cover products for a stated period of time

continued


Warranties

• Warranties do not protect against failure caused by customer misuse of a product

continued


Warranties

• Full warranty– Free repair or

replacement– No unreasonable

demands on customers

– Transfer of coverage to new owner

• Limited warranty– Provides service,

repairs, and replacements only under certain conditions

– May not cover replacement

continued


Warranties

• Most products carry unwritten implied warranties

• Implied merchantability means the product does what its name implies

• Implied fitness means a product must be fit for any performance or purpose promised by the seller


Extended Warranties

• For an additional cost, you can buy an extended warranty when you buy major appliances, autos, or electronic products

• They can be expensive and may offer more protection than you need


Used Merchandise

• Save money by buying used instead of new items such as– furniture– sports equipment– baby clothing– musical instruments– autos

continued


Used Merchandise

• Used goods are usually sold as is, so examine them before buying

• Make sure a child or baby item wasn’t recalled due to a safety hazard

• Offers of free furniture and other items may be posted on Web sites and in local newspapers


Shopping for Services

• Unlike goods, services cannot be inspected and handled before buying

• Since you aren’t sure what you will get when you buy a service, it’s important to check the reputation of the business

• Ask former customers if they were satisfied

continued


Shopping for Services

• Investigate qualifications

• Get written estimates

• Give clear and complete description of desired service


Work Orders and Contracts

• Work orders and contracts are common when buying services on a car or home, or for services performed over a period of time

• Signed contracts are used for expensive or lengthy jobs

continued


Work Orders and Contracts

• Inspect the work before paying in full or signing off; don’t pay the full cost up front


Shopping at Sales

• Don’t let sales tempt you to buy what you don’t want or need

• Look for flaws that will affect the use of a product

• Consider cleaning or repair costs• Check store policies on sale items• Know when to expect price cuts

and plan to shop then


The Right of Refusal

• In a market economy, consumers strengthen demand for what they buy and weaken demand for what they refuse

• By intelligently using their power, consumers protect their financial interests and make the economy work


Central Ideas of the Chapter

• To save money and build wealth, you must spend less than you earn. Being a smart shopper helps you accomplish that.

• Shopping choices are almost endless. Weighing the choices carefully involves rational decision making.


Glossary of Key Terms

• advertising. A paid message touting the attributes of something in order to convince consumers to buy it.

• comparison shopping. The process of gathering information about products and services to get the best quality or usefulness at the best price.

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• consumer cooperative. A nonretail association owned and operated by a group of members for their own benefit rather than for profit.

• e-commerce. Buying and selling goods and services online.

• extended warranty. A contract that provides for the servicing of a product, if needed, during the term of the contract.

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• full warranty. Provides for free repair or replacement of the warranted item or part if any defect occurs while the warranty is in effect.

• implied fitness. An unwritten warranty that guarantees a product is fit for any performance or purpose promised by the seller.

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• implied merchantability. An unwritten warranty that guarantees a product is what it is called and does what its name implies.

• limited warranty. Provides service, repairs, and replacements only under certain conditions.

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• nonstore sellers. Also called direct marketers, they sell goods and services in different ways and from different locations. They include door-to-door salespersons, catalogs, telemarketers, electronic sales via television or Internet, consumer cooperatives, and vending machines.

• peer pressure. The power a social group has over someone who seeks the group’s approval and acceptance.

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• retail stores. Stores that sell goods or services directly at their place of business.

• t-commerce. Shopping done on the television.

• telemarketing. A form of selling that generally involves the seller calling you on the telephone to sell goods or services.

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• warranty. A guarantee that a product will meet certain performance and quality standards.

• work order. A request for service; also includes a description of work to be done.

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© Goodheart-Willcox Co., Inc.. 13 Smart Shopping Basics.

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Transcript of © Goodheart-Willcox Co., Inc.. 13 Smart Shopping Basics.