Before you Buy

Being a smart consumer in a world with so many products and services can be somewhat daunting. With so many options available, it is easy to get overwhelmed with major purchase decisions- from the initial research, visiting stores to look at actual products, and then deciding which item to purchase, there are a lot of factors to consider. Fortunately, the Consumer Action Handbook is here to make the purchasing process easier and help you get the most for your money. Keep reading to learn more about this valuable resource.

Do Your Research

Before you begin your search for a new product, it is always helpful to assess your needs and what you can realistically afford. Although many companies produce or sell the item that you want, there can be a wide range of features and prices charged for what seems like a very easy purchase. Deciding what you need in advance helps to narrow the focus of your search and avoid paying for bells and whistles that you do not need.

In order to know what you should look for, you will need to do some preliminary research. There are a variety of sources of valuable information to consult during this step. Your research can be as simple as talking to trusted family and friends that have bought the same type of product recently or picking up a copy of Consumer Reports for unbiased ratings about the products. More than just the product itself, you should also be concerned about the type of customer service that the manufacturer or retailer has provided. Be sure to contact the Better Business Bureau or your local consumer affairs department to determine if any other consumers have filed a complaint against the companies you may possibly work with on your purchase.

Ready, Set, Shop

Once you have done your basic research, it’s time to start shopping. This could mean reading the sales flyers in the newspaper to get an understanding of the price ranges for the products you are looking for. If you are making a purchase that requires financing, such as a car or home, you may also want get a free copy of your credit report to see if you can qualify for a favorable interest rate.

You should now go and look at actual models in person. It may be helpful to take along the wishlist and your budget to keep you focused on your requirements for the item you choose. Keep in mind that there will be sales support on hand in the store; ask them to clarify facts, definitions, or other technical details rather than considering them as your advocate. Remain committed to your initial research and budget so you can avoid making an impulse decision or being pressured by sales staff to buy something that is more expensive than you need.

Once you have narrowed down the field to the item that you want and can afford, be sure to ask about service, return and refund policies, other fees, and the manufacturer warranties. If possible get all of the company’s policies and procedures in writing. Some companies offer extended warranties or service contracts for your purchases. Before agreeing to purchase this additional coverage, ask yourself questions such as:

  • Who manages the warranty (the manufacturer, the seller, or a third party)?
  • How is this coverage different from the manufacturer’s product warranty?
  • How are claims handled?

Quick Tips Before You Buy

As a savvy consumer, you should always be on the alert for shady deals and scams. To avoid becoming a victim of fraud, keep these things in mind:

  • A deal that sounds too good to be true usually is! Be wary of promises to fix your credit problems, low-interest credit cards, deals that let you skip credit card payments, business/job opportunities, risk-free investments, and free travel.
  • Extended warranties and service contracts are rarely worth what you pay for them.
  • Say no to credit insurance offers. Often offered with credit cards, car loans and home mortgages, it is almost always better to purchase regular property, life or disability insurance.
  • There is no universal three-day cooling-off period. Don't be misled into thinking that you have an automatic three days to cancel a purchase. Only a few types of contracts give you a right to cancel.
  • Don't share personal information with someone you don't trust.
  • Beware of payday and tax refund loans. Interest rates on these loans are usually excessive. Even a cash advance on a credit card could be a better option.
  • Not all plastic cards offer the same protections. Your liability for the unauthorized use of a gift card and debit/ATM card may be much higher than the $50 maximum on your credit card.
  • Get a second opinion to prevent costly mistakes and enable you to make better decisions.
  • Think twice before you rent-to-own. Interest rates on rent-to-own purchases can be very high. If you miss a payment, you could end up with nothing. Consider buying second-hand at a thrift shop or through ads in your local newspaper.
  • Don't buy under stress. Avoid making big-ticket purchases during times of duress (e.g. coping with a death or debt).
  • Be sure to read all of the papers before you sign contracts. Don't sign contracts with blank spaces to be filled in later.