CONSUMER CHOICE
In this topic you will learn how to identify, research
and evaluate options when making decisions
related to solving those problems and issues that
confront consumers
Life is full of choices
Commerce and choice: CREATING POSTERS
 Decisions affecting the quality of your lives
 consumer
 financial
 business
 Employment
 Legal
 Environmental
ON POSTERS: CREATE A MIND MAP OF THE
DIFFERENT CONSUMER DECISIONS
CONSUMER DECISION MINDMAP TO
INCLUDE...
CONSUMER DECISIONS: A
consumer is someone who
purchases goods and services
to satisfy needs and wants..why
has this process become
increasingly more difficult in
today’s world?
CHOICE...!As more choice becomes
available, it is increasingly
difficult for consumers to make
wise decisions
 3 basic questions before deciding
to buy something are:
1.
Do I really want to buy this
item?
2. Can I afford it?
3. Is there something better?
Financial Decisions
 The most basic financial decision consumers need to
make is how much of their income to save and how
much to spend
 What is income?
 To gain the greatest possible satisfaction from their
income, many people develop a financial
plan..BUDGETS
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A budget assists you to make wise financial decisions because it
controls your desire to buy on impulse
 Financial decision of payment: cash or credit
 FIDO:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Budget_plannerv2.pdf/$file/Budget_planner-v2.pdf
Budget
Business decisions
 Have you ever babysat..? Then you have entered the
world of business
 As a ‘business owner’ you must make a number of
important decisions. How well you make these
decisions largely determines the success of your
business. The main business decisions include:
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To whom will I sell my good or service?
How much will I charge?
Where will I buy my supplies?
How will I market my business?
Sarah Glover: slide show
HTTP://SARAHGLOVER.COM.AU/
Employment decisions
What do you want to do after you leave school?
Employment decisions
 What am I good at?
 What do I love?
Choose a job you love, and you will never have to work
a day in your life. ~ Confucius
work

“Work is the refuge of people who have nothing
better to do” Oscar Wilde
 Every day I get up and look through the Forbes list of
the richest people in America. If I'm not there, I go
to work. ~Robert Orben
 The brain is a wonderful organ. It starts working the
moment you get up in the morning, and does not
stop until you get into the office. ~Robert Frost
Employment
 Difficult to decide what you want to do when you
leave school and the labour force is changing so
rapidly
 The decision on which career path to take is one of
the most important you will make. Therefore, you
need to investigate the various options. When
deciding on a career what should you consider?
Employment decisions
 Things to consider:
 Your abilities, interests
and personality
 The careers market –
what is available now as
well as future prospects
 How to become qualified
and prepare yourself for a
job
 What happens when you
get the job
Legal Decisions
 When you purchase something you make a number of
legal decisions
 When you buy an item you assume that:
1- The goods will be of a merchantable quality: that is,
of an acceptable quality in keeping with the price that
you must pay for them
2- The sale involves a contract between two parties in
which each party agrees to provide something of value
for the other.
Purchasing tomatoes>more significant purchasing
decisions...
Legal Decisions
...it may be difficult to determine on first inspection if
a product is faulty, especially if it is well packaged.
Consequently, laws have been developed to protect
the consumer. If you buy a product and then find it
is faulty, you need to be aware of your rights and
responsibilities according to the law for consumer
protection
Can you think of an example?
Environmental decisions
 Responsibility to protect the world’s environment for
now and the future
 As a consumer you can decide to purchase products
that are less harmful to the environment
 You can recycle
 Consumers are being encouraged to consider
alternatives to the plastic shopping bag because it is
not biodegradable
Commerce and choice
 In pairs: identify and classify examples of different types of
commercial and legal decisions that people make on a daily basis
HINT: It may help you to think about each activity you do from the
time you wake up until you go to sleep..on a weekend.
 Classification into the following categories
1.
Consumer
2. Financial
3. Business
4. Employment
5. Legal
6. Environmental
TASK
 Collect 3 examples of decisions made in your own life
and write an explanation of the factors affecting your
consumer decisions.
 E.g. Buying a dog, TV, laptop, bed etc
Commerce and choice
 What is a good and what is a service?
DEBATE
 “That plastic shopping bags should be banned as in
South Australia”
Commerce and choice
 What is comparison shopping and why do we do it?
 Who mostly comparison shops?
Commerce and choice
 Most goods and services are available from more
than one retailer. Often the same product costs
different amounts at different stores.
 Shopping around to obtain the best deal is referred
to as comparison shopping.
 Usually when making a MAJOR PURCHASE e.g.?
Commerce and choice
 Comparison shopping: When making a major
purchase, it is essential you compare the price,
quality, availability and after-sales service.
 The more INFORMED you are about the items you
intend to buy, the better shopper you will be...why?
Consumer decisions
COMPARISON SHOPPING
- Types of goods and services
 Consumables, household goods, luxury items, repair
services or information services
- Different brands and products
 Well-known, highly reputable brands tend to be more
expensive than those brands that are not well known. Is
this due to quality?
- Choosing what to buy
Commerce and choice
Did you know many Australian families spend up to
40% of their disposable income at the supermarket
each week..!
How do you decide where to buy different things?
BRAINSTORM: How many different ways are there to
buy?
Consumer decisions
CHOOSING WHERE TO BUY
- Range of locations and sources
- Types of retail outlets
- Internet purchasing and mail order
- Locally, interstate, globally
- Ways of buying: Phone, internet, door to door,
magazines, markets, outlets, itunes, petrol pay at the
pump, sms, self service at coles etc, vending
machines..
Consumer decisions
 Short essay: explain the factors influencing decisions
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to buy locally, regionally, interstate or globally, retail
or wholesale or on the internet...
What products would you buy where
Soap:
Pasta:
Cheese:
Dress:
Handbag:
Music, films, etc:
Consumer decisions
KEY FACTORS AFFECTING CONSUMER
DECISIONS
- finance, price, marketing, age, gender, convenience,
service
- Environmental considerations
Consumer protection
The need for consumer protection- scams and rip-offs
SCAM WATCH: http://www.scamwatch.gov.au/content/index.phtml/itemId/693900

Shopping SHOULD be enjoyable, but can be frustrating and stressful if you are unaware
of your RIGHTS as a consumer.

unconscionable conduct by businesses?

Advice to beat cheats and save money and time!
TASK: Worksheet on scams and rip offs
Consumer protection: scams and rip-offs
 Misleading advertising: bait and switch (low price/limited items)
 ‘Fake’ price reductions: E.g. ‘reduced to 29.95’ when original price was $30. Consumers have a right
to know what original price was! Illegal for retailers to invent a higher figure
 Double taking: two or more prices on a product or service and customer charged the higher price.
Illegal
practice under the Trade Practices Act 1974 (Cwth) and consumers have the right to complain to consumer affairs
department
 Overvalued and unsafe vehicles: 2nd hand motor vehicle industry has a poor reputation due to
unlicensed motor dealers purchasing old, run-down cars add paint and pass them on for higher prices. Office of Fair
Trading complaints.
 Unsolicited goods:
sending people goods they didn’t ask for them demanding payment. Usually books,
magazine etc in the hope that the potential customer will want to order more. NSW consumer protection law gives
consumers 2 choices. Write to seller and they will return goods and if no collection in a month consumer can keep them
at no charge. Sender does not have right to use legal action or debt collectors.
 Door-to-door sales:
If dishonest or high-pressured techniques are used to force a sale. Make unrealistic
claims. Key to success is to avoid being bullied and ask relevant questions. Who is the salesperson and to what
company is the salesperson connected? What is the total price of the product? Physical force or harassment by a
salesperson is illegal and you have the right to ask the salesperson to leave your property. SEE TXT Pg. 21
 Pyramid schemes: NSW Fair Trading Act 1987 outlaws these. Promise of quick and easy money in return
for a ‘joining fee’. Only people at the top benefit.
 Internet offers: ‘guaranteed income’ in return for an upfront membership fee. IF THEY SOUND TOO
GOOD TO BE TRUE THEN THEY PROBABLY ARE!
Consumer protection
Features of a simple contract
WHAT IS A CONTRACT?
FEATURES OF A SIMPLE CONTRACT
 ANY agreement to buy or sell goods and services,
whether it is written or spoken, is a form or contract.
 This means that both the buyer and seller have important
rights and responsibilities that can be enforced by
LAW
 Each person assured that the other individual or business
involved in the contract will perform their part of the
agreement.
 ARE ALL CONTRACTS MADE IN WRITING?
CONTRACTS
 SOME types of sales contracts are required by LAW
to be made in writing.
 For a contract to be legally enforceable it must have
6 ESSENTIAL FEATURES:see pg. 24 of txt.
1: LEGAL OBJECT
2:POSSIBLE TO PERFORM
3: CONSIDERATION
4: LEGAL RIGHT
5:INTENTION
6: OFFER AND ACCEPTANCE
CONSUMER PROTECTION: KEY TERMS
 CONSUMER SOVEREIGNTY
 MERCHANTABLE QUALITY
 UNCONSCIONABLE CONDUCT
CONSUMER PROTECTION: KEY TERMS
 CONSUMER SOVEREIGNTY: The POWER
of consumers to decide which businesses and
products survive in the marketplace.
 MERCHANTABLE QUALITY: Fit for the
purpose for which a good is bought. (PRICE
MATCHES QUALITY)
 UNCONSCIONABLE CONDUCT: Dishonest
and unfair conduct by individuals or
businesses providing goods and services to
consumers
Documentary: Consuming kids
 Consuming Kids throws desperately needed light on the practices of
a relentless multi-billion dollar marketing machine that now sells
kids and their parents everything from junk food and violent video
games to bogus educational products and the family car.
Drawing on the insights of health care professionals, children’s
advocates, and industry insiders, the film focuses on the explosive
growth of child marketing in the wake of deregulation, showing how
youth marketers have used the latest advances in psychology,
anthropology, and neuroscience to transform American children
into one of the most powerful and profitable consumer
demographics in the world.
Consuming Kids pushes back against the wholesale commercialization
of childhood, raising urgent questions about the ethics of children’s
marketing and its impact on the health and well-being of kids.
Consumer protection
Legal rights and protective legislation for consumers
 Australia’s consumer protection laws provide consumers with
important rights.
 The NSW Office of Fair Trading outlines four important consumer
rights:
1.
Goods and services should be safe and of merchantable quality.
A consumer has the right to purchase goods that are of reasonable
quality and fit for the purpose for which they were bought. E.g
2. Right to be protected from misleading and deceiving practices.
3. Information provided with goods and services should be accurate
and, by law, is required to give details such as the price, and the
content and weight of the package. Care instructions must be
labelled on garments and textiles
4. Safety instructions should appear on dangerous products.
Consumers should be informed of the correct way of using a
product and any potential dangers the product may present
Steps in resolving a consumer complaint
Draw this up and use an image to represent each step.
 On page 22.
 STEP 1: Identify the problem –gather relevant documents, including
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receipt and warranty
STEP 2: Contact the business without delay – write to or phone the
person you had a problem with or the manager to seek a remedy
STEP 3: Contact the relevant industry association or ombudsman –
NSW Office of fair trading/Cth ombudsman
STEP 4: Contact the state government's consumer affairs department
– can inform you or your rights
STEP 5: Contact a mediation/conflict resolution service
STEP 6: Contact a court or tribunal - courts and tribunals can make
a decision that is legally binding. However, this can be a very costly way
to resolve a dispute
Write a letter
 Have you ever been with your parents when you got
a parking fine?
 Have you ever got the wrong product or faulty
product and written a letter about it?
 See page 1.3c
 TAKE ACTION: new law, new road etc you are
unhappy with, do something about it.
LEGAL RIGHTS AND PROTECTIVE
LEGISLATION FOR CONSUMERS
 See pg. 25 of text
 Trade Practices Act 1974 (Cwth)
 Prices Surveillance Act 1974 (Cwth)
The above laws administered by the...
 Australian Competition and Consumer Comission
(ACCC)
LEGAL RIGHTS AND PROTECTIVE
LEGISLATION FOR CONSUMERS
 Trade Practices Act 1974 (Cwth)
Aim of this act is to improve the wellbeing of Australians by promoting competition, fair trade and
consumer protection. This law deals with issues such as anticompetitive and unfair practices, product
safety, conditions and warranties, and actions against manufacturers and importers.
 Prices Surveillance Act 1974 (Cwth)
Designed to protects consumers against unfair price increases. The Act gives the ACCC the power to
monitor and report on the prices, costs and profits of companies and government authorities.
The above laws administered by the...
 Australian Competition and Consumer Commission
(ACCC)
Can launch a public inquiry into the price of particular goods and services and force businesses to notify
the ACC of any intention to raise their prices. The ACCC has recently investigated trends in petrol
prices, airport and postal services to determine whether they are in breach of the act.
POSTERS ON COMPUTERS: INFORMING
CONSUMERS OF THEIR RIGHTS AND
FEATURES OF A CONSUMER CONTRACT
YOUR RIGHTS/RESPONSIBILITIES AS A
CONSUMER – see pg. 25
POSTER FOR NEW AUSTRALIAN
CITIZENS/EXCHANGE STUDENTS
http://www.moneystuff.net.au/Default.aspx?alias=ww
w.moneystuff.net.au/nsw
Honey, who shrank the groceries?
 http://www.smh.com.au/business/honey-who-
shrank-the-groceries-20110329-1cen2.html
Michaela
 visit
GLOBILISATION DEBATE
“It does not matter how far apart we might all be
geographically, economically or culturally,
globalisation unites us all.”
Each student should come up with 3 written points for
or against this statement.
Commercial vs ethical chocolate...the test
Conduct a taste test of commercial chocolate as
opposed to ethical chocolate.
Visit www.worldvision.com.au and obtain a list of
brands from the Good Chocolate Guide to Australia.
Create a table and compare packaging, price, taste,
quality and availability.
Organisations that provide assistance for
consumers
In Australia, legal assistance for consumers can be obtained
from government authorities at the national and state levels
as well as from independent associations around the country.
Which organisations provide assistance for consumers?
- Government departments and organisations – state and
federal
- Independent organisations
Organisations that provide assistance for
consumers
STATE GOVERNMENT AUTHORITIES:
Office of Fair Trading NSW:
http://www.fairtrading.nsw.gov.au/default.html
The Consumer, Trader and Tenancy Tribunal (CTTT)
http://www.cttt.nsw.gov.au/default.html
Research: what are their roles?
Office of Fair Trading NSW:
http://www.fairtrading.nsw.gov.au/default.html
 Aims to protect consumer rights in NSW
 Provide advice for businesses about fair and ethical
retail practices
 To administer the rules that ensure transactions
between consumers and traders (businesses) are fair
 Investigates unfair business practices and operates a
licensing system to ensure that employees in a range
of NSW Industries are appropriately qualified
 Administers more that 80 state laws that protect
consumer rights in NSW
The Consumer, Trader and Tenancy Tribunal
(CTTT)
http://www.cttt.nsw.gov.au/default.html
 Is a NSW court that aims to resolve consumer-related
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1.
2.
3.
4.
5.
6.
7.
8.
disputes as well as trader and tenancy-based matters
(those involving rental property and housing)
There is a small fee to lodge an application, discount for
pensioners
140 venues in NSW for hearings
The NSW Office of Fair Trading can refer consumers to
the tribunal
Deals with matters under 8 main categories:
Home building
Residential parks
Motor vehicles
Retirement villages
Tenancy (housing) issues
Commercial matters
General consumer issues
Strata and community schemes
Federal Government departments
 The Australian Competition and Consumer Policy
Division within the Department of Treasury aims to
protect and promote the power of consumers
= consumer sovereignty
 The Australian Competition and Consumer Commission:
ACCC also deals with consumer concerns
 ACCC handles issues sch as anticompetitive and unfair
market practices, mergers or takeovers of companies and
product safety/liability

ACCC only national agency dealing generally with competition
matters in Australia:
http://www.accc.gov.au/content/index.phtml/itemId/142
Ombudsmen
 If you experience problems in your dealings with a
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government department you will need to contact the
ombudsman
Ombudsman is an independent official who has been
appointed to deal with complaints against either
government departments or private businesses.
In Australia we have a Commonwealth Ombudsman as well
as state and territory ombudsmen
Industry ombudsmen
http://www.ombudsman.gov.au/
http://www.ombo.nsw.gov.au/
Independent organisations
 Australia Consumer’s Association (ACA)
 What are the other organisations:
 Kidsafe, community organisations
Payment choices
What different ways can we pay for things?
Payment choices: methods of payment
 CASH
 DIRECT DEBITS
 CHEQUES
 CREDIT CARDS
 BOOKING IT UP
 LAY-BY
 ELECTRONIC FUNDS TRANSFER
 Bpay
 EFTPOS
Payment
 Set up tables to determine the most appropriate
methods of payment in a range of contexts
Method of
Payment
Definition
Advantage
Disadvantage
An example of
when and who
may use this
method
Cash
Direct
Debits
Cheques
Credit
Cards
Booking it
up
Lay-by
Electronic
funds
transfer
Bpay
Eftpos
Cash
 Def: The most liquid asset!
 Many consumers still prefer cash
 Advantage is it is immediate
 All shops accept cash and often things can only be
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purchased using cash e.g.?
Easy to monitor how much cash you have
Limit dealings with bank
No interest
Can potentially negotiate lower prices when pay for items
with cash
HOWEVER: Bulky, not secure...any others?
Direct Debit
 Avoid inconvenience of paying bills by mail or at the
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bank by setting up a direct debit from regular savings
or cheque account
Popular for household services (utilities, gas, phone
electricity)
Gym
Health insurance
Rent
However..what can go wrong?
Cheques
 Written instruction asking for funds to be transferred
from young bank account into someone else’s
 Convenient when paying for expensive items
 HOWEVER
 Checks may bounce
 Time it takes for funds to ‘clear’
 See example of cheque on page 30.
Credit Card/s
 Enable customers to purchase goods and services with
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money lent to them by a bank, other financial institution
or retailer
Usually have an interest-free period within which
consumers can accumulate debt at NO CHARGE
After this date INTERST is charged on the daily
outstanding balance
Useful when used effectively
What types of credit cards are there?
When are credit cards really useful?
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Phone, internet, can build positive credit for future loans with good
track record...music concerts..
PIN VS SIGNATURE ...
Booking it up
 Used in rural communities and remote parts of the
country
 Has any one had experience with this?
 Retailers offer small amounts of short-term credit to
customers so that they can make purchases at their
store. In return, customers need to provide some
form of security such as a debit card and pin number
 HOWEVER what are some of the problems?
Lay-by
 Provided by a limited number of retail stores
 Allows us to purchase goods when we don’t have the
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money to buy them up front
Retailer will hold the goods at the store for a
specified period of time until you have paid for them
No interest is charged with lay –by
Also protects you from potential price increases in
the product
Seller will hold goods at original price unless you fail
to make the payments as agreed
Electronic funds transfer
 The term EFT =electronic funds transfer
 Refers to all types of financial transactions that are
carried out electronically
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EFTPOS, Bpay, Internet banking and using and ATM
WESTPAC YESTERDAY?
Question to think about and answer after listening to clip..
 Do you think that Westpac should have to compensate people for
this technical glitch? Explain why or why not.

Bpay
 Method of making electronic payments
 Enables you to pay your bills over the phone or using
the Internet
 Reduces the time and cost associated with traditional
bill payment and is available 24 hours a day, 7 days a
week!
 Funds used for Bpay come from where?
 An example!
EFTPOS
 ELECTRONIC FUNDS TRANSFER AT POINT OF
SALE! = EFTPOS
 , has become a popular method of paying for goods
and services
 Allows you to pay for items directly from your bank
account using a plastic debit card and a PIN =
Personal identification number
Disadvantages...?
Class discussion
Discuss the need for banks to provide banking facilities
in remote areas?
ATM’s in pubs/pokies debate?
Keeping records
 Wise consumers keep records of their income and
expenditure over time
 Storing important documents such as:
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Records of purchases (cash and EFT receipts)
Bank statements
Pay slips
Product instructions and warranties
Banks send you a monthly/quarterly statement and you should check
these statements against your records why?
Also important for the ATO= Australian Taxation Office- they may
ask for receipts to justify claims on your annual tax return
Importance of Budgeting
E.g. Why and how has this changed?
Changes over time and the impact of technology
Online and internet shopping
EFTPOS
SELF- CHECKOUT
SMART CARDS....
TASK:
a)
YOU ARE TO FIND A NEWS ARTICLE ON A NEW PAYMENT
TECHNOLOGY THAT WILL TRANSFORM THE WAY WE SHOP (e.g.)
(it could be one of the above or something different)
b)
SUMMARISE THE ARTICLE
c)
LIST ARGUMENTS FOR AND AGAINST THIS NEW TECHNOLOGY
AND CONCLUDE BY INCLUDING YOUR OWN OPINION
** Please note your article can be a radio story but ensure you don’t use
articles/stories from poor sources, what is a good source? The SMH
online, ABC ratio national online, The Australian Newspaper online, The
New York Times, The Economist, BRW, Time Magazine etc
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Financial literacy!
Define Financial literacy and examine how it assists a
consumer – thus need for equity with indigenous
people
FEDERAL BUDGET
 Budget vs budget!
 Explain the type of person that would benefit most
from the federal budget
BUDGET: BUDGETING
Construct a budget using Monday Smart or FIDO
website:
http://www.moneysmart.gov.au/tools-andresources/calculators-and-tools/budget-planner
Title: My personal budget
(remember Budget vs budget!?!)
Methods of keeping records
 Develop and use spreadsheets and databases to
maintain effective record and monitor monthly
transactions including running totals of cash, direct
debit and credit purchases
Changes over time and the impact of technology
 Identify how technology has impacted on payment
processes of businesses and consumers