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Thursday, January 23, 2014

Be an empowered consumer in 7 steps

January 20, 2014

By Diana Chai

With price hikes and inflation set to spiral; there is little wonder that everywhere you turn, you are bombarded with messages telling you to save more; cut down on spending and adjust your lifestyle. Of course, it’s useful advice. If prices are increasing and you want to get by on a smaller sum, you spend less. It’s simple.

But hearing the same advice over and over again can be disempowering. It’s as if saying, despite the fact we’ve got more inflation but no salary increase; it’s only our own fault because we may like to enjoy our hard-earned money once in awhile. To work 5-6 days, a minimum of 8 hours and then be told we can’t even afford mamak food for our lunch breaks like we used to? It is frustrating.

Though there is little we can do to change economic policies, perhaps we can turn the disempowered feeling we get from being told constantly to change our lifestyles to something more positive, by being more empowered and informed consumers.

1. Change the way you see why and how you spend

It’s as simple as the difference between saying “I won’t buy this because I cannot afford it,” to “I won’t buy this because it is not of good enough quality/usefulness to justify its high price.”

Sometimes, constantly telling ourselves we cannot afford something can feel truly disempowering. Whilst it may be true in the sense that there may be less money in your pocket than is required by the price tag; perhaps there is another way to look at it. Instead, realise how hard you’ve worked for your money and ask yourself; is it worth it for me to spend on this item/experience? Am I getting enough value for my hard-earned money or am I simply making a greedy middle-man richer?

The point here is to realise that your money has value. It has been devalued enough by changes in policy and economic monopoly. So why allow more people (merchants and producers) to devalue it further by charging a price for an item that isn’t worth it?

For a real concrete example; take generic brands versus branded items in grocery stores: why are we paying more for a brand name and state-of-the-art packaging when what we want is simply laundry detergent that can be made for a fraction of the price?

2. Say no to bad quality

This point links with the first. If you’ve purchased something that is of inferior quality; make a stand not to purchase it again. Many consumers now turn to social media as well to express their dissatisfaction on a brand’s page. It may seem petty, but the only way we will stop being fed inferior products is when we stop accepting it as the ‘way things are’.

3. Say no to bad service

Have you experienced bad service; maybe because of how you look or how many items you are purchasing? No matter how you are dressed; how many items you are buying, never put up with disrespect from a store be it a luxury brand or an all-items-at-RM2 outlet. Whether you spend RM50 or RM500; you are keeping the business running, employees paid and owner profiting so shouldn’t you be treated with respect? This of course isn’t about mistreating store employees or expecting a red carpet but being shunned, tersely responded to or flat out ignored isn’t acceptable.

4. Research

The internet now offers you access to businesses around the world. All you need to do to find the recommended price of an item is to search it online. Before buying something, especially a big ticket, expensive item, do your research on its price.

5. Know your rights as a consumer

The Consumer Protection Act 1999 (CPA) is not really anyone’s idea of good bedtime reading but you will be surprised how useful it can be to know at least roughly what your rights are as a consumer.

Did you know the following instances may be illegal?

a) Paid car parks that tell you “park at your own risk”. As long as you’ve paid the carpark a fee, they should take reasonable care of your car and you as provided for in the new Section 21A of the CPA.

b) “Goods sold are not exchangeable” stamped on your receipt. Was this brought to your attention before you paid? If not, it isn’t valid. In order for a seller to bind you to a term which excludes their own liability, they need to let you know about it BEFORE you conclude the sale.

c) Getting the “you can only exchange for other items” when you return a defective product. Did you know you have a choice? Under section 46 of the CPA, the consumer has the right to choose whether he would like a refund or a replacement.

These are just some of the examples we found upon perusing the CPA and the Consumer Claims Websites. Of course, do get in touch with the Consumer Claims Tribunal or your lawyer to be sure of your rights and what actions you can take.

At the end of the day; putting aside legal jargon – just know that when you pay money in exchange for a product or service: you are paying for it to be the way it was described to you; in good and working condition and most importantly; to serve the purpose for which it was made.

6. Support healthy competition

Since 2010, we now have a brand new commission to ensure sellers and suppliers are playing fair. Healthy competition means allowing demand and supply factors to dictate prices. It allows merchants to sell at prices lower than their competitors to gain more customers. The result of such a system is that you, the consumer, gets to shop around for the best value. But what happens when a group of traders all decide to supply only one brand and all the same price (most likely an inflated one!). What happens is – you lose out.

The new Competition Commission has been established to investigate, amongst other anti-competition practices, price fixing and supply rigging (holding on to stocks collectively to create unnatural demand frenzy and thus over-inflated prices).

The Commission is currently investigating the price hikes of stationery and ice which may be against the competition law.

But what can you do? If you’ve noticed sellers you frequent fixing prices, refusing to sell or forcing you to buy products you don’t need in order to get the ones you want, make a complaint with the Commission. The Commission works on tip-offs from the public too so do your part to keep prices low and merchants as honest as possible!

For more instances that is against healthy competition; check out the handy guide on the Commission’s website.

7. Make use of government incentives and initiatives

Whether or not it’s enough, how about making use of whatever benefits we are afforded? If you qualify for BR1M, then make sure you submit your application; where possible shop at 1Malaysia stores and take a closer look at tax exemptions and rebates to make the most of them. This might seem penny-wise, pound foolish but every little bit will count. And after all, as a taxpayer you’ve paid for these so why not make full use of them? The same goes for 1Malaysia clinics and government hospitals. Government hospitals; albeit make you wait for treatment; can actually be more efficient than some private hospitals as they are not solely concerned with money values.

How does this help?

Being an informed consumer actually does translate to getting more for your money by keeping prices competitive. Whilst some endeavours may not yield immediate results or obvious savings; every time you exert collective power as an informed consumer, you make further headway in creating a better marketplace for all of us. This of course doesn’t mean you should abuse your power; so take care not to overdo the power trip.

So this 2014, as you do cut down on your spending, make sure that whatever you do spend on, is giving you the most value for your money. Take your power back.

This was brought you by Diana Chai from RinggitPlus compares credit cards, personal loansand home loans to help Malaysians get more for their money.

This article is for information only. This article does not constitute financial, legal or other advice. The views expressed are the writer’s own, and do not reflect or incorporate the views of any entity within the Ascension Lab or Saving Experts Sdn. Bhd entities. Nothing in this article binds or incorporates the views of any Entity, or creates legal relationships between the reader and any Entity.

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