Informed consumer

The concept of the informed consumer is fundamental in the law of the European Union. Since the European Council Resolution of 14 April 1975, one of the primary objectives of the European Community, and then the European Union, has been the provision of information to consumers. The rationale is that market actors are enabled to make better choices when they are informed and have a greater capacity to understand the importance of their market actions and choices.

The concept of the informed consumer is fundamental in the law of the European Union. Since the European Council Resolution of 14 April 1975, one of the primary objectives of the European Community, and then the European Union, has been the provision of information to consumers. The rationale is that market actors are enabled to make better choices when they are informed and have a greater capacity to understand the importance of their market actions and choices. ==Definition== According to the European Union, "Information is a deciding factor for consumers when making their choices and affects both consumer interests and their confidence in the products and services circulating within the market." ==Importance== Consumer information is the most important element for consumer protection and policy decisions. It is the solution to issues ranging from online transactional threats, behavioural targeting, loss of privacy and other problems. A consumer should treat every purchase as an important investment. Making an uninformed investment in the stock market can result in huge financial losses and this same concept applies to daily purchases. Being an informed consumer is advantageous to the economy, market and consumers. An informed consumer is capable of making sensible decisions by gaining an insight about a product prior to its purchase. This insight equips the consumer with the data to arrive at an evidence based conclusion. This can be made clear through in a few common aspects: Appropriate quality – Almost every purchase comes with a variety of options from which to choose. Consumer information enables the customers to select a quality of product which matches their needs for durability or sustainability. Reliability – Information about products facilitates safe purchases. Mass production of bulk consumer goods may result in instances of products bearing manufacturing defects. Recognising these defects can prevent the customer from financial injury or loss. Product and brand reviews and consumer forums online can be instrumental in educating the customers about potential problems with the product, and should be considered when making big purchases like appliances and vehicles. Affordability – Consumers may be misled by aggressive sales tactics, especially by professionals paid by commission, who may entice the consumer to buy expensive products, products with a high mark-up, or expensive options. Information about the potential purchases can help the consumer save money and ensure a smarter purchase. Ethical considerations – Consumers may not wish to deal with a company which indulges in unethical practices, such as animal testing, labour abuse, environmental pollution, and political corruption. It is the responsibility of the consumer to get all the information about the potential purchase and associated background before making a decision to buy a product. It is ultimately the consumer, through their market choices, which endorses or rejects a product, thus shaping the marketplace. Becoming educated about the consequences of a purchase makes the consumer both informed and responsible. ==Effects on marketplace== Providing complete information levels the information asymmetries between the producer and consumer and improves consumer decision-making. Transparent information about the terms and conditions associated with the product or service make plain the regulatory requirements to redress any consumer grievances. Informing the consumer can also help set the consumer's expectations of the product, which can be useful to the producer. Some businesses may be reluctant to inform their potential consumers, concerned that this might harm the marketability and attractiveness of their products. However, economic analysis indicates that informational asymmetry between the producer and consumer is detrimental to the marketplace and a major ground for market failure – with consumers left to make irrational decisions. Unbiased information can help solve market problems by equipping the customers with appropriate information, ensuring healthy market practices. ==Customer know-how== The US Federal Trade Commission recommends that consumers: Know who they are dealing with, and to not do business with any company that cannot be contacted. Protect personal information, and share it only with a trusted company. Resist high-pressure sales techniques, and take time to consider a purchase. Get all promises in writing and review all documents before paying or signing a contract. Discard any offer that asks payment for a gift. Know the risks when it comes to investment.

Text derived from https://en.wikipedia.org/w/index.php?oldid=1367530144 under CC BY-SA 4.0; modifications have been made.