Transparent information about the terms and conditions associated with the product or service can facilitate a plenty of regulatory requirements to redress the consumer related grievances. Primarily, complete information will level the information asymmetries, improve consumer’s decision- making capability vis-à-vis the seller’s complex knowledge about the product they are selling.
Consumer information also harmonises and solve consumer problems, create awareness and guide their Behaviour. Another important objective that is achieved by informing the consumer is impact on Competitive policy. This will enable the traders and service providers to give greater information to consumers about their product, educate them about the product quality and other specifications. In addition to the compliance to the legal obligations, the business firms also have their planned, tactical and important business- related reasons behind informing the consumer.
The business organisation ensure consumer’s expectation management by equipping them with certain knowledge about the commodity. Many times, business face disincentive by providing information to the consumers, as it might harm the marketability and attractiveness of their product. This indicate the power gained on being an informed consumer. The economic analysis indicates that information asymmetry to consumer is a major ground for market failure, causing the consumer to make irrational decisions. Thus, unbiased information can solve the market problems by equipping the customers with appropriate information and thereby ensuring healthy market practices.
Consumers derive their information from multiple sources. The following are the sources from where a consumer gathers the desired knowledge about the product:
- Governments issue public information for the consumers
- Regulatory authorities, review and testing services and comparison sites
- Social networks (friends, family, children, acquaintance etc.)
- Suppliers of the products or services.
- The media
Consumer derives information from a variety sources, each source illustrating its own interest, skills and resources. However, it is essential for the consumers to recognize their personal interests and make a judicious decision.
- Know who you are dealing with: Don’t do business with any company that won’t provide its name, street address, and telephone number.
- Protect your personal information: Share credit card or other personal information only when you’re buying from a company you know and trust.
- Take your time: Resist any urge to “act now” despite the offer and the terms. Once you turn over your money, you may never get it back.
- Read the small print: Get all promises in writing and review all the documents carefully before you pay any money or sign a contract.
- Never pay for a “free” gift: Throw away any offer that asks you to pay for a gift. If it’s free or a gift, you shouldn’t have to pay for it. Free is free.
- Know the risks before you spend your money: When it comes to investments, every potentially high-profit investment is high-risk. That means you could lose your investment – all of it.
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