Learning area: Commerce

Syllabus Topic: Consumer rights and responsibilities

Part A

Consumer exploitation is a condition in which traders cheat the consumers by giving poor quality goods
or charges more than usual price for a commodity or service for examples, by giving substandard quality,
under-measurement, under-weight, duplicate, adultered or impure-goods, charging more price and
faulty manufacture goods or medicines. This usually happens when consumers' surplus is extracted into
producer surplus, often seen in highly concentrated markets where one or a few suppliers has significant
market power and is able to raise and then keep their prices well above cost.

Forms of consumer exploitation

-Fake Advertisement

- Substandard Products

- High Price

- Adulteration

- Under Measurement

-Black Marketing

- Duplicate Goods

- Lack of after Sale Service

- Lack of Information

- Rough behaviour and undue conditions

Fake Advertisement

The consumer is misled by the advert.Whatever is shown and disclosed through advertisements about
the product and service, is not completely true. The quality of the product and its durability is not always
perfect and long-lasting. The way it is shown only attracts the customers and compels the people to buy
it. Non-disclosure of reality is a disadvantage. The seller may only feed the information that they want
the consumers to know not the information the consumer should know about the products.

Substandard Products
Every business aims to earn profit and in order to gain profit, they tend to sell inferior quality products
which may cause harm. This practice is also unethical.

High Price

Sellers those who have a monopoly of the products and have the control to change the price, take unfair
advantage of charging the high prices of the products, and people are left with no choice but to buy the
product. Ignorance and urgency of customers usually cause the price to be inflated.

Adulteration and impure products

This is the worst forms of consumer exploitation. It not only causes monetary loss but also affects the
health of a person. The unwanted materials are mixed in the food items which harms the body and may
result in different types of diseases.

Under measurement

The quantity printed in the packet is not always accurate. Also, the material which is measured while
purchasing is not correct. Sometimes, sellers sell under measured goods and ask for the original quantity
price. In this way the buyers are cheated via underweight and under measurement tactics

Black marketing and hoarding

When there is a high demand for a certain product, sellers start stocking the product and they will
pretend that there is a scarcity of the product due to which the price will be increased (artificial
scarcity)and people will buy it because they need it. This happens especially for essential commodities.
For instance, the increase in the price of tomatoes in the market but in reality, they were stored in the
warehouse. This is an essential commodity and people have to buy it. Earlier, tomatoes were sold at $20
per kg but later on the price was increased to $80 per kg. This is hoarding and black marketing.

Duplicate Goods

Many sellers sell the goods in the name of branded goods. They change the quality and material and
puts the name and logo of different brands. This is misrepresentation and unethical to practice in
business.

Lack of after Sale Service

A seller has the duty and responsibility towards customer providing after-sale service. Manufacturing
and selling are not the only activity to be performed, if any customer faces any kind of problem after
using the product, then the problems must be heard and shall be solved. So most of the manufacturers
do not offer after sale service. Example of consumer exploitation is happening in Zimbabwe were most
of its brand new imported YTO tractors are down because no spairs are available.

Lack of Information
The ingredients used, manufacturing date, harm, and consequence of the product are the information
that should be disclosed to the customers otherwise they might face problems that will leave a negative
impact on the market.

Rough behaviour and undue conditions

Customers are often harrased and undue conditions are put before them to get their requirement
fulfilled.

Consumer Awareness

The most important and key objective of an Act is to create awareness among consumers. Consumers
shall be aware of rights, products, detailed information, rules, etc. there are incidents where people face
problems whether it is online shopping or in physical form. Consumer Protection Act makes sure that
people are aware of all the particulars and details.

ADVERTISEMENT

Importance of Consumer Awareness

1. Every consumer must be satisfied after buying any product or availing of services. People work hard to
earn money and the money they spend on goods must be worth it. Therefore, they must not be cheated
in any way.

2. Sellers usually charge more than expected or prescribed, just to earn profit. Those who do not have
knowledge regarding underweighting, fake articles, etc., are in the trap of suppliers, and in this way, the
manufacturers and sellers exploit the end-users.

3. There is a variety of products in the market which are for benefit of the people or may harm the
health of a person. For instance, tobacco, liquor, etc. may harm health due to which awareness should
be spread regarding products that are not good for health.
ADVERTISEMENT

4. Many consumers spend a lot of money on expensive products and they are not even aware of the
actual price and raw materials used to make it. If consumers are aware of the product then they would
save money and buy a substitute good and will make the right decisions while buying the goods.

5. When a consumer or customer is deceived by any retailer, producer, manufacturer, etc., he should be
aware of the solutions to solve the issue as many people are innocent, illiterate due to which they do
not have proper knowledge regarding laws prevailing in the country. Consumer awareness helps people
to make understand that they can approach consumer court if they face any kind of problem.

6. To maintain a healthy relationship between consumers and producers, the first step should be
building trust and not deceiving anyone. This will develop a healthy society.

ADVERTISEMENT

Rights of Consumers

1. Right to Choose

A customer has full right to select the goods from different shops. No seller can force any customer to
buy or avail of the service from that particular seller. If in case, any seller forces the customer to buy or
does any act or compels him to buy then the consumer can take legal actions against him.

2. Right to be Informed

ADVERTISEMENT

Every small detail must be mentioned on the packet, especially any unique information to be given while
using or consuming it. Like date of manufacturing, expiry date, ingredients, directions to use, where to
store, etc., these are the information that must be circulated. For instance, we buy winter clothes,
directions to wash must be mentioned so that the quality of the product must retain for a long time.

3. Right to Safety

Safety is a very important step to be taken by manufacturers. Business is not to only earn profit but to
provide safety. They shall make sure that every product must be safe to use. Many products are there in
the market which may cause risk to the customer if not properly used. For example, gas cylinders, food
coloring, etc.

ADVERTISEMENT

4. Right to be Heard

If any risk or problem is faced by the consumer, then the grievance must be heard. Selling the product
does not end the duty and responsibility of seller after-sale service is also important. Without being
heard, the problem will remain unsolved, and this is against business ethics.