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Chapter 23Consumer Rights andResponsibilitiesAfter completing this chapter, you will be able to:Section 23.1 Consumer Rights Describe seven protections that are included in the Consumer Bill of Rights.Section 23.2 Consumer Responsibilities Describe the responsibilities of consumers.AskQ:A:Taxes and InvestingWhat responsibilities do I have for paying taxes on my investment earnings?Everyone is required to pay taxes on investments. The amount of taxes you owe onan investment is dependent on how much your investment grew, how long youheld the investment, and on your tax bracket. Your tax bracket is the amount atwhich your regular income is taxed. It is important to figure taxes into your calculations when comparing your investment choices. The difference they can make isstartling. In fact, the tax advantage afforded to long-term capital gains is anotherbig reason why long-term investing approaches work so well.Mathematics John and Esperanza both fall in the 35% tax bracket. John decides tomake a single 10,000 investment at the beginning of the year and hold it into thenext year. Esperanza moves her 10,000 from stock to stock throughout the year.John’s investment doubles to 20,000, while Esperanza’s increases by 125% to 22,500.However, because John’s investment qualifies as a long-term investment, he owes only 1,500 in taxes. Esperanza owes the full 35%, 5,250, because she bought and soldmultiple times. At what rate was John taxed?Use a Variable to Represent a Percent Just as a variable can represent aninteger, it can also represent a decimal or percent. Just as you would solve any otheralgebraic expression, isolate the variable on one side to determine its value.404Unit 8Buying Goods and Services
Photo Credit: Photodisc Green/Getty Images (RF)Knowledge Is Power Consumers can learnabout ingredients by reading the labels onfood products. Do you compare the labels offood products before deciding which productto buy?Chapter 23 Consumer Rights and Responsibilities405Photo Credit: vlkjdf;lkjeijeojf;ldkjl;dskfj;
Section 23.1Consumer RightsThink about the importance of your rights as a consumer and theways those rights can impact your life.Read to LearnGraphic Organizer Describe seven protections that are includedList the benefits of each of the seven basicconsumer rights in a figure like the one below.in the Consumer Bill of Rights.The Main IdeaConsumers are protected by the Consumer Billof Rights. The bill states that consumers havethe right to be informed, the right to choose,the right to safety, the right to be heard, theright to have problems corrected, the right toconsumer education, and the right to service.Key ConceptConsumer RightBenefit of that RightThe Right to BeInformedThe Right to ChooseThe Right to Safety The Consumer Bill of RightsVocabularyKey Termsconsumer rightsconsumer movementproduct liabilitybait and switchAcademic VocabularyYou will find these words in your reading andon your tests. Make sure you know theirmeanings.accuratedevicesresolvedscenarioThe Right to BeHeardThe Right to HaveProblems CorrectedThe Right toConsumer EducationThe Right to ServiceGo to the Introduction to Business OnlineLearning Center through glencoe.com fora printable graphic organizer.Academic StandardsEnglish Language ArtsNCTE 1 Read texts to acquire new informationMathematicsAlgebra Represent and analyze mathematical situations and structures using algebraic symbols406Chapter 23 Consumer Rights and Responsibilitiesglencoe.com
The Consumer Bill of RightsImagine that you just bought an MP3 player. The first time youplay it, you do not hear a sound. The good news is that you haverights as a consumer. These rights protect you when a product isdefective.In 1962, President John F. Kennedy outlined what he calledthe Consumer Bill of Rights. The bill stated that every person hasfour basic consumer rights—the right to be informed, the rightto choose, the right to safety, and the right to be heard. Theserights received a lot of attention from the consumer movement,a movement to pass laws protecting consumers from unfair andunsafe business practices. Over the years, three other rights wereadded: the right to have problems corrected, the right to consumer education, and the right to service.Think aboutyour rights as aconsumer. Haveyou ever observedyour consumerprotection rightswhen dealing witha defective productyou purchased?The Right to Be InformedAs a consumer, you have a right to receive accurate information. Consumers can make wise decisions only if they have theinformation they need. Businesses are required to provide certaindetails about their products. For example, drug companies mustlist the complete contents of every medicine. Clothing manufacturers must list the fibers used in materials. Packaged foods mustshow all ingredients, with the main one listed first. Companiesprovide this information through product labeling.The Right to ChooseBecause the United States has a market economy, its consumers can choose from a wide variety of goods and services.Businesses compete with each other to sell their products to consumers. They offer new products, lower prices, higher quality, orimproved services to get you to choose their products. Competition provides choices. A lack of it hurts consumers.Product SafetyCritical Reading Life is full of important decisions. Think aboutthe kinds of decisions that you make as you read the questionbelow.A product your company makes has a slight design flaw. You arethe only one who knows about the problem, and the chances of itcausing someone harm are negligible. The warning label that wasprinted, although thorough, does not address the design flaw. Toreprint the warning labels would put this product over budget.Decision Making Would you have the warning labels reprinted?Explain your answer.Section 23.1 Consumer Rights407
Think about howbusinesses competeto sell their productsto consumers.Have you ever beenaffected by a lack ofcompetition?The federal government has the power to keep markets competitive. It can use antitrust laws to break up monopolies or keepthem from forming. Sometimes it will prevent a large companyfrom buying a smaller one if the purchase would lead to controlof a market.Explain What type of economy gives its citizensthe right to choose from a wide variety of goodsand services?The Right to SafetyYou have a right to products that are safe to use. Productliability is the legal responsibility that manufacturers have tomake a safe product. For example, tools and appliances mustinclude safety devices for your protection. Federal laws ensurethat clothing, food, toys, and other items will not harm consumers. The U.S. Consumer Product Safety Commission enforcesproduct-safety standards.Reader and Case StudyHP Wants Your Old PCs BackIt’s pushing states to force recycling of TVs,computers, and other e-gear. Here’s why.A few years ago, when environmentalists inWashington State began agitating to rid localdumps of toxic old computers and televisions,they found an unexpected ally: Hewlett-PackardCo. Teaming up with greens and retailers, HPtook on IBM, Apple Computer, and several majorTV manufacturers, which were resisting recycling programs because of the costs.Aided by HP’s energetic lobbying, the greenspersuaded state lawmakers to adopt a landmarkprogram that forces electronics companies tofoot the bill for recycling their old equipment.“This bill puts our market-based economy towork for the environment,” said WashingtonGovernor Christine O. Gregoire as she signedthe plan into law on Mar. 24.The movement to recycle electronic refuse,or “e-waste,” is spreading across the nation,408and so is HP’s clout. The company helped thegreens win a big battle in Maine in 2004 whenthe state passed the nation’s first e-waste “takeback” law.CASE STUDYGo to the Introduction toBusiness Online Learning Center throughglencoe.com for the BusinessWeek ReaderCase Study.Active LearningResearch the components that are used tomake a computer and the reasons those components should not end up in a landfill. Writea letter to your state representative. Explainthe reasons it is important to your future foryour state to preserve the environment.Chapter 23 Consumer Rights and Responsibilitiesglencoe.com
The Right to Be HeardConsumers who have complaints about products or serviceshave a right to be heard. Suppose you buy a bike helmet from asporting goods store. After wearing the helmet a few times, youfind that the chinstrap keeps coming loose. You have the rightto let the store know you are not satisfied with the helmet. Businesses rely on customer satisfaction. The purpose of the customerservice department is to listen to the concerns of customers.The Right to Have Problems CorrectedSometimes products do not work properly after they are purchased. Usually if a customer takes a defective item back to astore with a receipt, the business will replace it or issue a refund.If a business cannot or will not correct a problem, consumerscan write to the manufacturer to find out how to get the matter resolved. If the manufacturer will not help, a governmentagency might be your next step. Figure 23.1 asks you to matcheach scenario with the appropriate consumer right.Figure 23.1Real WorldConsumerResourcesConsumer.gov is anonline resource forconsumer informationfrom the federalgovernment. It isdesigned so thatconsumers canlocate information bycategory—such asfood, health, productsafety, money, andtransportation. Howmight this consumerresource be usefulto you?Know Your Consumer RightsConsumer IssueConsumer Right1. An automaker recalls its new model after someof its seat belts fail to keep children safe.Right to be heard2. A restaurant asks you to fill out a comment cardafter eating your meal.Right to choose3. An advertisement for a new TV informs theconsumer about the total cost and interest rate.Right to service4. An electronics store displays three competingbrands of computers from which to choose.Right to safety5. A shoe store replaces your new shoes after youdiscover a problem with the soles.Right to be informed6. Consumer Reports educates consumers whoare researching different models of cameras.Right to have problems corrected7. You pay an auto-repair service to rebuild yourcar’s engine.Right to consumer educationConsumer Rights The Consumer Bill of Rights states that every person hasthe right to be informed, to choose, to be safe, to be heard, to have problemscorrected, to receive consumer education, and to receive service. Can you matchthe consumer issue with the appropriate consumer right?Section 23.1 Consumer Rights409
Real WorldConsumerAwareness Inthe United States,National ConsumerProtection Weekhighlights consumerprotection andeducation efforts.Whether you areinvesting in abusiness opportunity,taking part in anonline auction,or looking for ascholarship, it paysto be aware as aconsumer. What issuemight be a themefor the next NationalConsumer ProtectionWeek?The Right to Consumer EducationConsumers have the right to learn how a market system works.You should know how to get the best value and satisfaction foryour money. When you decide to buy an item, you should knowthat different stores might charge different prices. You shouldknow how to comparison shop to find the best buy. Check theinformation required by law on labels, and read fact sheets aboutproducts.The Bait-and-Switch Tactic There are always some businessesthat do not operate in the best interests of the consumer. Somemight try a tactic known as bait and switch. Bait and switch is asales tactic in which buyers are tempted by an advertised bargainbut are then persuaded to buy a more expensive item instead.The Right to ServiceCustomers have a right to be treated in a respectful and courteous manner. You have the right to expect prompt delivery ofgoods or services that meet the standard of quality a businessclaims. You also have the right to be served without discrimination on the basis of your race, gender, income, or age. Theserights apply wherever you are being served.Section 23.1Review Key Concepts1. What are four basic consumer rights provided by the 1962 Consumer Bill of Rights?2. What three consumer rights have been added to the Consumer Bill of Rights since1962?3. How does the bait-and-switch tactic work? Why is it unfair to consumers?Academic Skills4. Mathematics Today you found thetablecloth you wanted to buy on salefor the bargain price of 20. At otherstores the same tablecloth costs 23.Write an expression that could be usedto determine the percent discount of thebargain tablecloth.Percent Discount Percentdiscount is a ratio of the difference in pricedivided by the original price. To convert adecimal to a percent, multiply by 100 bymoving the decimal point two places to theright.For math help, go to theMath Appendix.Go to the Introduction to Business Online Learning Center throughglencoe.com to check your answers.410Chapter 23 Consumer Rights and Responsibilitiesglencoe.com
Section 23.2Consumer ResponsibilitiesThink about your responsibilities as a consumer and the waysthose responsibilities can impact businesses.Read to LearnGraphic Organizer Describe the responsibilities of consumers.In a table like the one shown, list examples ofeach of the six responsibilities of consumers.The Main IdeaAlong with your consumer rights, you haveresponsibilities. You must use informationprovided to you, choose carefully, use productssafely, and learn consumer skills. It is yourresponsibility to speak out and seek a remedywhen problems occur.Key Concept Your Responsibilities as a ConsumerVocabularyKey TermspollutionrecyclingconservationboycottAcademic VocabularyYou will find these words in your reading andon your tests. Make sure you know ResponsibilityExampleThe Responsibilityto Be InformedThe Responsibilityto Choose CarefullyThe Responsibilityto Use ProductsSafelyThe Responsibilityto Speak OutThe Responsibilityto Seek a RemedyThe Responsibilityto Learn ConsumerSkillsGo to the Introduction to Business OnlineLearning Center through glencoe.com fora printable graphic organizer.Academic StandardsEnglish Language ArtsNCTE 1 Read texts to acquire new informationNCTE 8 Use information resources to gather information and create and communicate knowledgeScienceContent Standard F Students should develop understanding of environmental quality and scienceand technology in local, national, and global challengesglencoe.comSection 23.2 Consumer Responsibilities411
Real WorldWho IsResponsible? Someconsumers havesued a leading fastfood giant becauseof the contents andpreparation of itsfood items. Somestates have alsosued the tobaccoindustry becauseof the contents ofits products andits sales tactics.In both instances,the complaint wasthat the productscontributed tosome consumers’poor health. Do youthink a companyis responsible if aconsumer’s health isnegatively affected byits products?Your Responsibilities as a ConsumerAlong with rights come responsibilities. As a consumer, youhave the responsibility to educate yourself. If information abouta product is available, you have the responsibility to read thatinformation and to use the product the way it is intended.The Responsibility to Be InformedResponsible consumers know what they are buying. Whenyou shop for food, read the labels for nutritional facts. Productlabels can tell you how much salt, sugar, fat, or protein a productcontains. When you shop for clothes, read the labels to find outwhat materials they contain. The labels will also indicate howthe clothes should be cleaned.Before making a major purchase, you should always do somehomework. Some consumers read the fact sheets from the U.S.Consumer Product Safety Commission. The fact sheets tell howa product is rated on safety, performance, and value. There isalso lots of information on the Internet. Read consumer magazines such as Consumer Reports and Consumers’ Research Magazine,which evaluate and rate products. Most consumer organizationsand manufacturers have Web sites. Figure 23.2 shows the Website for J.D. Power and Associates , a leading market research andconsumer information firm.Contrast How do product labels and factsheets from the U.S. Consumer Product SafetyCommission differ?Stay Informed It is yourresponsibility to learn aboutproducts before buyingthem. How is this persontaking responsibility as aconsumer?412Chapter 23 Consumer Rights and ResponsibilitiesPhoto Credit: Rachel Epstein\PhotoEdit
Figure 23.2Making Educated ChoicesInformation forConsumers The J.D.Power Web site offersvaluable informationfor consumers. If youwere going to buy anew car, what typeof information wouldyou want to knowbefore deciding whichcar to buy?The Responsibility to Choose CarefullyResponsible consumers make comparisons to find the bestproduct or service at the best price. Which electronics companyoffers the best guarantee? Which cars have the best record forreliability? Which computer will best fit your budget and yourneeds? It pays to take time to make comparisons. You can examine the options and prices and then make an educated choice.Choices That Affect the Environment Many consumer choicescan affect the environment. Some vehicles emit more exhaustthan others. Some materials, such as certain plastics, cannot berecycled and do not decompose easily. Illegal dumping can harmnatural habitats. All of these things contribute to pollution,the contamination of air, water, and land. Pollution is causedby waste from products as well as the ways we use them. Peopleand businesses must help to reduce it by making choices that aregood for the environment.Think about waysconsumers canreduce pollution.Conserving Resources As the population grows, the demandfor resources increases. Conservation is the process of preserving, protecting, and planning the management of resources. Forexample, as more people move into an area, the demand forwater rises. Some areas may experience water shortages. Consumers should be aware of the limited supplies of certain resourcesand adjust their consumption accordingly.Section 23.2 Consumer Responsibilities413
Eco-Friendly PackagingIf something is biodegradable, living organisms can break itdown into simpler structures. This reduces the length of time itaffects the environment. Packaging producers have increasedresearch into the chemicals they use, looking for materials that canbe broken down faster. A majority of packaging material is made ofsome form of ordinary plastic. While many plastics can be recycled,they are not biodegradable. This leaves it up to voluntary recycleprograms to reduce the environmental impact.Go to the Introduction to Business Online Learning Center throughglencoe.com for links to Web sites where you can research howpackaging manufacturers are trying to lessen the environmentalimpact of their products. Write a paragraph describing what companies are doing in this area.Recycling Part of conservation is learning to avoid waste. Consumers can help by reducing, reusing, and recycling materialsin their daily lives. Recycling involves collecting products forprocessing so that they can be used again. Many cities have programs to collect products made of paper, plastic, metal, and glassfor recycling.Define What is recycling?The Responsibility to Use Products SafelyThink about aproduct you boughtthat was defective.What did you do tospeak out about thedefective product?Consumers must follow the instructions provided in product manuals or other materials on the safe use of products.For example, a consumer must read the label of a cold remedyto find out its recommended dosage. If you know a product isunsafe, first contact the seller or producer about it. If no action istaken by the company, contact a consumer protection agency.The Responsibility to Speak OutResponsible consumers can help improve the policies andproducts of the businesses where they shop. They can let a company know if they are dissatisfied with its products or policies.Consumers also have a responsibility to report unfair, unsafe,and illegal business practices. This helps to protect other consumers from problems. If you object to a company’s policies orproducts, you could organize a boycott, a refusal to buy its goodsor services. Boycotting is usually a last resort for consumers whohave not received an adequate response from a company.414Chapter 23 Consumer Rights and Responsibilitiesglencoe.com
The Responsibility to Seek a RemedyPart of being a good consumer is getting the best value foryour money. You have a responsibility to seek a remedy fora defective product. If you plan to exchange an item or get arefund, you must take back the item, the receipt, and any warranties or guarantees that came with it. If the store cannot solvethe problem to your satisfaction, you should contact the manufacturer or a consumer organization for help.The Responsibility to Learn Consumer SkillsFind information to help you make consumer decisions. It is abit overwhelming to think of researching every purchase beforeit is made. However, there are several ways to develop your consumer skills: Read information on labels and packages. Compare prices at different stores, and look for sales. Pay attention to the media to become aware of illegalpractices. Read consumer information publications. Attend classes or workshops on consumer issues andproblems.Many purchases that you make will not require any research.Still, remember that the more informed you are about productsand services, the better your consumer decisions will be.Section 23.2Review Key Concepts1. Where can you find information before making a major purchase?2. Identify three steps you can take as a consumer to conserve resources.3. If you object to a company’s practices, what can you do as a consumer?Academic Skills4. English Language Arts Work togetherwith one or two other students to createa bulletin-board display called “Consumers Speak Out!” Collect newspaper andmagazine articles from consumer publications that illustrate how consumershave influenced businesses to changetheir policies or improve their products.5. English Language Arts Write a250-word report on how governmentregulations, such as those related toautomobile safety, food and drug labeling, and secondhand smoke in storesand restaurants, have affected thesafety of consumers.Go to the Introduction to Business Online Learning Center throughglencoe.com to check your answers.glencoe.comSection 23.2Consumer Responsibilities415
Chapter 23 Review and ActivitiesSection 23.1 SummarySection 23.2 SummaryConsumer Rights The U.S. ConsumerConsumer Responsibilities Along withBill of Rights states that every personhas seven basic consumer rights. Thefirst four are the right to be informed, theright to choose, the right to safety, andthe right to be heard. Since the bill wasdeveloped in 1962, three other rightshave been added to it: the right to haveproblems corrected, the right to consumereducation, and the right to service. As aconsumer, you are protected if you buy adefective product or receive poor service.However, it is up to you to make sure thatyour rights are observed.rights come responsibilities. It is yourresponsibility to educate yourself beforemaking consumer decisions. If you plan tomake a major purchase, you can read andinvestigate your choices so that you canmake a wise decision. Comparison shopby reading consumer magazines, checkingcompanies’ Web sites, and visitingdifferent stores. Reducing pollution,conserving resources, and recycling arealso responsibilities. If you take yourconsumer responsibilities seriously, youcan get the best value for your money.Vocabulary Review1. On a sheet of paper, use each of these key terms and academic vocabulary terms in asentence.Key Termsconsumer rightsconsumer movementproduct liabilitybait and c ualscontactadequateReview Key Concepts2. Describe four protections for consumers that are included in the Consumer Billof Rights.3. Describe the responsibilities of consumers.416Chapter 23 Review and Activities
Critical Thinking4. After the Consumer Bill of Rights wasdeveloped, the consumer movementwas a strong force for consumerprotection. Why do you think theconsumer movement became so strongat that time?5. In what ways do you think thatconsumers may not exercise their rightto be heard?6. Where can people go for help inmaking consumer decisions?7. When might a loss leader (product soldbelow cost) become a bait and switch?8. What do you think causes poorcustomer service?9. Check the label on an item ofclothing. How would you suggest themanufacturer improve the label?10. How does it help consumers to haveinformation about a single serving onfood labels?11. What do you think would justifya consumer boycott of a store orcompany?12. What do you think is the mostimportant thing that consumers can doto protect their interests when they buygoods and services?Write About It13. Write two or more paragraphs aboutwhy you think auto-repair complaintshave led the list of consumer concernsfor several years.14. List several reasons why you thinklarge companies often have entiredepartments devoted to consumeraffairs.15. List an item you recently bought thatyou are not satisfied with now. Writea short essay about actions you couldtake to resolve the matter.16. Research the proper ways to dispose ofitems such as old clothes and used oil.Then write an essay on your findings.17. Choose a company and write a shortpaper on the consumer information itprovides. How can consumers remedy aproblem with the company’s product orservice?18. Find out about environmental issues inyour community. List three pollutionproblems and discuss ways consumerscan help solve them.19. Research different consumer scams. Usethe Internet, newspaper articles, andother materials. Write a news article onways to avoid them.Technology ApplicationsBusiness EthicsSpreadsheet SoftwareConsumer Ethics Policy20. Study a label for canned or packagedfood. Answer these questions: What isthe serving size? How many servingsare there per can or package? Howmany calories per serving? How manycalories per can or package? Whatvitamins and minerals does the foodprovide? Develop a spreadsheet of yourfindings. Share your results with theclass.21. Consumers have rights andresponsibilities. Ethical behavior isone of the most important consumerresponsibilities. Write a policy thatoffers general ethical guidelines andlists specific ways consumers should actwhen they shop. Discuss your policywith your classmates.Chapter 23Review and Activities417
Chapter 23 Review and ActivitiesApplying Academics to BusinessEnglish Language ArtsEnglish Language Arts22. Research the etymology, or history,of the word boycott. How and whydid it come into use? What are someimportant ways boycotts have beenused over the years? Write two or threeparagraphs about what you discover.24. Manufacturers sometimes recallproducts that have been discoveredto be unsafe. Consumer magazinesand Web sites post recall notices.Become familiar with at least threerecalls of related products in a categorysuch as infant products or electricalcomponents. Describe the reasonsfor the recalls and the procedures forresolving the problem.Mathematics23. Francine has nine cousins. Bycoincidence, they are all gettingmarried this year. Francine decidesto buy each one an engraved silverpitcher as a wedding gift. She findsthat the pitcher she wants to buycosts 130. However, if she buys 10,she will get a 10% discount. What isthe difference in cost for 9 pitchersversus 10?Percent Discount Percentdiscount is a ratio of the differencein price divided by the original price.To find a discounted price, multiplythe original price by the discount andsubtract the product from the originalprice.Mathematics25. VidMania sells DVDs for 14.98 each.In January, the store sold 208 DVDs.The manager wanted to compute thetotal sales of DVDs for the month.If you were to estimate the answerusing mental math, what would be anappropriate estimate?Mental Math Simplifyingnumbers and computation by roundingand estimating makes it possible tosolve problems in your head.Active LearningBusiness in the Real WorldEnvironmental AwarenessConsumer Information26. Work in a team of two or three todevelop a survey about awareness ofenvironmental issues. Survey localbusinesspeople and consumers. Possiblequestions to include: Which items doyou recycle? How do you dispose ofhazardous materials? Then prepare areport of your findings.27. Visit one or more stores in yourcommunity that sell large appliancesor electronic equipment. Ask forbrochures, pamphlets, or warrantyinformation they may provide tocustomers. Based on the informationyou receive, from which companywould you most likely make apurchase? Write a brief report on yourfindings and response.418Chapter 23 Review and Activities
RolePlayDEVELOP COMPARISON SHOPPING SKILLSPRACTICE CUSTOMER SERVICE SKILLS28. Think of a product that you plan topurchase soon. Then comparisonshop. What are different companies’return policies? Which offers the bestguarantee? Which offers the bestvalue? Are there any customer reviewsto consider? Prepare a report of yourfindings.30. Situation You are a clothing storemanager. The store’s return policystates that customers without a receiptmay exchange a returned item. A salesassociate asks you to talk to a customer,who wants to return an item without areceipt.BusinessCAREERSFIND YOUR DREAM JOB29. Go to the Introduction to BusinessOnline Learning Center throughglencoe.com for a link to theOccupational Outlook Handbook Website. Click on the “OOH Search/A-ZIndex” link and enter the job category“public relations specialists.” Thenwrite a one-page report about this areaof occupation. Conclude your reportwith a list of things you could donow to prepare yourself to
Algebra Represent and analyze mathematical situations and structures using algebraic symbols Go to the Introduction to Business Online Learning Center through glencoe.com for a printable graphic organizer. Think about the importance of your rights as a consumer and the ways those rights can impact your li
