Maharashtra Board Class 12 Organization of Commerce and Management Chapter 7 Consumer Protection PDF Download

Consumer Protection

"A consumer is the most important visitor in our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work; he is the purpose of it. He is not an outsider to our business, he is part of it. We are not doing him a favour by serving him, he is doing a favour by giving us an opportunity to do so".

- Mahatma Gandhi.

7.1 Introduction

Consumer is the origin of the modern marketing world. Consumer is the originator of an organization. The success and failure of any business depends on consumers. Consumers are the pillars of economic development in any country. The entire economy revolves around them. All the production and manufacturing activities are undertaken by business organisations only to give maximum satisfaction to the consumer.

In today's seller's market consumers have been cheated and exploited through price rise, artificial scarcity, black marketing, adulteration, and misleading advertising.

Every consumer should have adequate knowledge of product and services regarding quality, quantity, price, standards etc. to select right product.

Teacher's Note

Consumers help the economy grow. In India, when people buy goods from local shops, they help those shop owners earn money.

Exam Trick

Remember: Consumer = one who buys or uses something. Like when you buy a notebook from a shop, you are a consumer.

Points to Remember

Consumers are very important for all business.
An economy grows because consumers buy things.
Sellers sometimes cheat consumers with fake products.
Every consumer has rights to know about products.
Consumers need protection from dishonest sellers.

7.2 Meaning

The word 'Consumer' is derived from the Latin word 'Consumere' which means to eat or to drink. The consumer is the one who consumes or uses any commodity or service available from natural resources or through a market.

A Consumer means any person who buys any goods, hires any service or services for a consideration which has been paid or promised or partly paid or partly promised or under any system of deferred payments.

We are all consumers when we use any commodity like foodgrains, milk etc. or service like bank, railway, post office, hospital etc.

Teacher's Note

You become a consumer when you buy milk from a dairy or travel by bus. Every student is a consumer when buying books or food.

Exam Trick

Remember: Consumer = one who buys or uses goods and services. You are a consumer every day when you eat, travel, or use electricity.

Points to Remember

Consumer word comes from Latin language.
A consumer buys goods or uses services.
Payment can be full, partial, or after some time.
We are all consumers in daily life.
Services include banks, railways, hospitals, and post offices.

7.3 Need And Importance Of Consumer Protection

Generally, safeguarding the rights and interests of consumers is known as consumer protection. It includes all the measures aimed at protecting the rights and interests of consumers. In modern competitive market, consumer is regarded as the 'King of Market' hence consumer protection is required due to the following reasons:

1) Need Of Participation Of Consumers: It is noted that business organizations take decisions which affect the consumers' interest without consulting the consumer or their organizations. Only a strong consumer organisation can pressurise business organisations to allow consumer participation in the decision making process.

2) Lack Of Information: It is very difficult to establish direct contact between consumer and manufacturer because consumers live in a dynamic and complex world and they are widely scattered. Today's markets are full of domestic as well as imported products therefore it is very difficult to get correct and reliable information about product before they purchase.

3) Ignorance: Ignorance of consumers is the main cause of exploitation by business. Consumers in India are mostly ignorant about their rights, market conditions, price levels and product details. A system is required to protect them from business malpractices.

4) Unorganized Consumers: Consumers are widely scattered and are not organized. On the other hand sellers are in better position than consumers and they are powerful. Consumers are under the influence of businessman. An individual consumer cannot fight against these powerful sellers.

5) Spurious Goods: There is increasing supply of duplicate products. It is not possible for an ordinary consumer to distinguish between a genuine product and its imitation. It is necessary to protect consumers from such exploitation by ensuring compliance with prescribed norms of quality and safety standards.

6) Misleading Advertising: Some businessmen give misleading information about quality, safety and utility of products. Consumers are misled by misleading advertisement and do not know the real quality of advertised goods. A mechanism is needed to prevent misleading advertisements.

7) Malpractices Of Businessmen: Fraudulent, unethical and monopolistic trade practices by businessmen lead to exploitation of consumers. Many times consumers get defective, inferior and substandard goods and services. Certain measures are required to protect the consumers against such malpractices.

8) Trusteeship: According to Gandhian philosophy businessmen are trustees of the society's wealth. Therefore, they should use this wealth for the benefit of people.

Teacher's Note

In India, many people do not know their consumer rights. Consumer protection laws help them get justice when sellers cheat them.

Exam Trick

Remember: Seven main reasons for consumer protection = Participation, Information, Ignorance, Unorganised, Spurious goods, Misleading ads, Malpractices.

Points to Remember

Consumers need to know about products before buying.
Many sellers give false information in advertisements.
Fake and duplicate products harm consumers.
Consumers are scattered and not organized together.
Most Indian consumers do not know their rights.

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