Consumer Rights

Basic Consumer Rights

Basic consumer rights ensure a level of protection for consumers owed by a supplier of goods or services.

Learning Objectives

Summarize the Consumer Bill of Rights extolled by President John F. Kennedy and the United Nations

Key Takeaways

Key Points

  • The Consumer Bill of Rights pushed for by John F. Kennedy established four basic rights; the right to safety, the right to be informed, the right to choose, and the right to be heard.
  • In 1985, the United Nations added four more rights to protect consumers: the right to satisfaction of basic needs, the right to redress, the right to consumer education, and the right to a healthy environment.
  • Consumer protection consists of laws and organizations designed to ensure the rights of consumers, as listed above.
  • In 1985, the United Nations in 1985 added four more rights to protect consumers: the right to satisfaction of basic need, the right to redress, the right to consumer education, and the right to a healthy environment.
  • Consumer protection is the duty of the laws, government agencies, and organizations created to ensure consumer rights.
  • Competitive markets also promote the interests of consumers under the principle of economic efficiency.

Key Terms

  • Consumer: Someone who acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing.
  • right: A legal or moral entitlement.
  • consumer rights: The legal and moral duties of protection owed to a purchaser of goods or services by the supplier.

What is a Consumer?

A consumer is defined as “someone who acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing. ” Before the mid-twentieth century, consumers were without rights with regard to their interaction with products and producers. Consumers had little ground on which to defend themselves against faulty or defective products, or against misleading or deceptive advertising methods. By the 1950s, a movement called “consumerism” began pushing for increased rights and legal protection against malicious business practices. By the end of the decade, legal product liability had been established in which an aggrieved party need only prove injury by use of a product, rather than bearing the burden of proof of corporate negligence.

Consumer Bill of Rights

In 1962, President John F. Kennedy presented a speech to the United States Congress in which he extolled four basic consumer rights — later called, The Consumer Bill of Rights. In 1985, these rights were expanded to eight by the United Nations. These eight rights are the:

A painting of John F. Kennedy.

John F. Kennedy: President John F. Kennedy extolled four basic consumer rights, later called the “Consumer Bill of Rights. “

Right to Safety

The assertion of this right is aimed at the defense of consumers against injuries caused by products other than automobile vehicles, and implies that products should cause no harm to their users if such use is executed as prescribed. The Consumer Product Safety Commission (CPSC) has jurisdiction over thousands of commercial products, and powers that allow it to establish performance standards, require product testing and warning labels, demand immediate notification of defective products, and, when necessary, force product recall.

Right to Be Informed

This right states that businesses should always provide consumers with enough appropriate information to make intelligent and informed product choices. Product information provided by a business should always be complete and truthful. This right aims to achieve protection against misleading information in the areas of financing, advertising, labeling, and packaging.

Right to Choose

The right to free choice among product offerings states that consumers should have a variety of options provided by different companies from which to choose. The federal government has taken many steps to ensure the availability of a healthy environment open to competition through legislation, including limits on concept ownership through Patent Law, prevention of monopolistic business practices through Anti-Trust Legislation, and the outlaw of price cutting and gouging.

Right to Be Heard

This right asserts the ability of consumers to voice complaints and concerns about a product in order to have the issue handled efficiently and responsively. While no federal agency is tasked with the specific duty of providing a forum for this interaction between consumer and producer, certain outlets exist to aid consumers if difficulty occurs in communication with an aggrieving party. State and federal attorney generals are equipped to aid their constituents in dealing with parties who have provided a product or service in a manner unsatisfactory to the consumer in violation of an applicable law.

Right to Satisfaction of Basic Needs

To have access to basic, essential goods and services: adequate food, clothing, shelter, health care, education, public utilities, water, and sanitation.

The Right to Redress

To receive a fair settlement of just claims, including compensation for misrepresentation, shoddy goods or unsatisfactory services.

Right to Consumer Education

To acquire knowledge and skills needed to make informed, confident choices about goods and services, while being aware of basic consumer rights and responsibilities and how to act on them.

Right to a Healthy Environment

To live and work in an environment which is non-threatening to the well-being of present and future generations.

Consumer Protection

Even though consumers have these rights, they can easily be ignored. That’s where consumer protection comes in. Consumer protection consists of laws and organizations designed to ensure the rights of consumers, as well as fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves.

Organizations that promote consumer protection include government organizations, individuals as consumer activism, and self-regulating business organizations, such as consumer protection agencies and organizations, the Federal Trade Commission, the Better Business Bureaus, etc.

Consumer interests can also be protected by promoting competition in the markets, which directly and indirectly serve consumers, consistent with economic efficiency.

Forces in Consumerism

The modern understanding of consumerism refers to an emphasis on the consumption of goods, often with a connotation of excess.

Learning Objectives

Discuss the forces driving the evolution of consumerism as an economic order that encourages the purchase of goods and services in ever-greater amounts

Key Takeaways

Key Points

  • The modern definition of consumerism, derived from the works of economist Thorstein Veblen, refers to the preoccupation with the acquisition of goods.
  • Though consumerism is an international and historical phenomenon, it was magnified dramatically by the Industrial Revolution, which made mass production of consumer goods a reality.
  • With the progression of mass production and consumption, some argue that materialism and desire for social status became more prominent in cultures around the world. Modern consumers are now able to emulate the wealthy and iconic through consumption of certain goods.
  • Increasing awareness of environmental and social concerns has given rise to ethical consumerism. Consumers are becoming much more conscious of how their consumption behavior is impacting the world around them, and they are beginning to change their purchasing decisions accordingly.

Key Terms

  • consumerism: An economic theory that increased consumption is beneficial to a nation’s economy in the long run.
  • conspicuous consumption: A public display of acquisition of possessions with the intention of gaining social prestige; excessive consumerism in order to flaunt one’s purchasing power.
  • ethical consumerism: consumption of goods and services with a conscious awareness of ethical and environmental implications

Consumerism

Consumerism is a social and economic order that encourages the purchase of goods and services in ever-greater amounts. The term is often associated with criticisms of consumption starting with Thorstein Veblen. While the term “consumerism” is also used to refer to the consumerists movement, consumer protection or consumer activism, the focus of this section relates to the first definition.

In economics, consumerism refers to economic policies that place emphasis on consumption. In an abstract sense, it is the belief that the free choice of consumers should dictate the economic structure of a society (cf. Producerism, especially in the British sense of term).

The term “consumerism” was first used in 1915 to refer to “advocacy of the rights and interests of consumers” (Oxford English Dictionary). Today the term consumerism more commonly refers to the, “emphasis on or preoccupation with the acquisition of consumer goods” (Oxford English Dictionary), a movement that emerged in the 1960s. This more modern conceptualization is based on the writings of sociologist and economist Thorstein Veblen who lived at the turn of the 20th century. He coined the term “conspicuous consumption” to describe this apparently irrational and confounding form of economic behavior. Veblen’s scathing proposal was that unnecessary consumption is a form of status display.

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Conspicuous Consumerism: Conspicuous consumption is when goods are consumed to enhance one’s social status.

History of Consumerism

Consumerism today is an international phenomenon. People purchasing goods and consuming materials in excess of their basic needs is as old as the first civilizations (e.g. Ancient Egypt, Babylon and Ancient Rome).

The seeds of modern day consumerism grew out of the Industrial Revolution. In the nineteenth century, capitalist development and the industrial revolution were primarily focused on the capital goods sector and industrial infrastructure. For example, after observing the assembly lines in the meat packing industry, Frederick Winslow Taylor brought his theory of scientific management to the organization of the assembly line in other industries; this unleashed incredible productivity gains and reduced the costs of all commodities produced on assembly lines. Henry Ford and other leaders of industry understood that mass production presupposed mass consumption.

In the agrarian economy, the working classes labored long hours and had little time for consumption. While previously the norm had been the scarcity of resources, the Industrial Revolution created a new economic situation. After the Industrial Revolution, products were available in outstanding quantities, at low prices, being thus available to virtually everyone. Access to credit, in the form of installment payments aided further consumption.

Modern Consumerism

Beginning in the 1990s, the reason most frequently given for attending college had changed. Making a lot of money outranked previous reasons such as becoming an authority in a field or helping others in difficulty. This rationale correlates with the rise of materialism, specifically the technological aspect: the increasing prevalence of mp3 players, digital media, tablets and smartphones. Madeline Levine criticized what she saw as a large change in American culture; “a shift away from values of community, spirituality, and integrity, and toward competition, materialism and disconnection.”

Businesses have realized that wealthy consumers are the most attractive targets of marketing. Consequently, upper class tastes, lifestyles, and preferences trickle down to become the standard for all consumers. The not so wealthy consumers then “purchase something new that will speak of their place in the tradition of affluence”. A consumer can have the instant gratification of purchasing an expensive item to improve social status.

Emulation is also a core component of 21st century consumerism. As a general trend, regular consumers seek to emulate those who are above them in the social hierarchy. The poor strive to imitate the wealthy and the wealthy imitate celebrities and other icons. The celebrity endorsement of products can be seen as evidence of the evocation of the desire of modern consumers to purchase products partly or solely to emulate people of higher social status. This purchasing behavior may co-exist in the mind of a consumer with an image of oneself as being an individualist.

Ethical Consumerism

The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of the Corporate Social Responsibility (CSR) movement. As global population increases, so does the pressure intensify on limited natural resources required to meet rising consumer demand. Industrialization of developing countries, facilitated by technology and globalization is further straining these resources. Consumers are becoming more and more aware of the environmental and social implications of their day-to-day consumer decisions and are therefore beginning to make purchasing decisions based on environmental and ethical implications. However, the practice of ethical consumerism is in its nascent stages and far from universal.