Consumer Rights: What’s in it for the Sellers

Many articles have already been written about how people should know and exercise their rights as consumers. This is just natural considering that consumer rights law is created mainly to protect the consumers. However, this doesn’t mean that it cannot benefit the sellers who uphold and promote the welfare of their consumers. But before these benefits can be discussed, the sellers should first refresh themselves of the rights of a consumer.

What are the rights of a Consumer?

According to Article 2 of Republic Act No. 7394, also known as The Consumer Act of the Philippines, “it is the policy of the State to protect the interests of the consumer, promote his general welfare, and to establish standards of conduct for business and industry” 1. This is why there are laws and agencies established to protect the welfare and interests of the consumers. With this, the following shows the eight basic rights of consumers as lifted from the Consumer Education section of the Department of Trade and Industry2:

  1. Right to Basic Needs. The right that guarantees survival, adequate food, clothing, shelter, health care, education, and sanitation.
  2. The Right to Safety. The right to be protected against the marketing of goods or the provision of services that are hazardous to health and life. You may look forward to (1) manufacturers of consumer products to undertake extensive safety and performance testing before selling their products in the market, and (2) labels which contain the proper information as regards the product, its use and how to operate it, if the need arises, and also precautions or warning signs.
  3. The Right to Information. The right to be protected against fraudulent/dishonest or misleading advertising/labelling/promotion and the right to be given the facts and information needed to make an informed choice. You may look forward to complete information about the product to be purchased, including its use, ingredients/chemical contents, precautions, if any, limitations, and expiry date.
  4. The Right to Choose. The right to choose products at competitive prices with an assurance of satisfactory quality.
  5. The Right to Representation. The right to express consumer interests in the making and execution of government policies.
  6. The Right to Redress. The right to be compensated for misrepresentation, shoddy goods, or unsatisfactory services. You may look forward to manufacturers/storeowners [that] would replace defective goods pursuant to the provision “No Return, No Exchange” provided in the DTI’s Implementing Rules and Regulations of Republic Act 7349, otherwise known as the Consumer Act of the Philippines.
  7. The Right to Consumer Education. The right to acquire the knowledge and skills necessary to be an informed consumer.
  8. The Right to a Healthy Environment. The right to live and work in an environment which is neither threatening nor dangerous, and which permits a life of dignity and well-being.

What does this mean for the Sellers?

With the consumer rights already presented above, the sellers should familiarize themselves with their obligations and responsibilities. In this way, they would avoid any dispute with their customers and possible fines that may arise from it.

First, the sellers should ensure that their products are safe and approved by the necessary regulatory bodies. This is in accordance with the second right of consumers which is Right to Safety. For example, processed food, drugs, and cosmetics should have undergone proper FDA approval before being sold to the public. Other products that fall under the mandate of FDA are devices, biologicals, vaccines, in-vitro diagnostic reagents, radiation-emitting devices or equipment, and household/urban hazardous substances, including pesticides and toys, or consumer products that may have an effect on health which require regulations as determined by the FDA3.

For electrical and electronics products, the Bureau of Philippine Standards employs two Mandatory Philippine Certification Schemes. These are the Philippine Standard (PS) Quality and/or Safety Certification Mark Licensing Scheme and the Import Commodity Clearance (ICC) Certification Scheme4. According to DTI, PS Quality and/or Safety Certification Mark License is defined as the license “granted to either local or foreign manufacturer whose factory and product have successfully complied with the requirements of the PNS ISO 9001 and the relevant product standard/s, respectively”4. On the other hand, ICC Certificate is “issued to an importer whose imported products have shown conformance to relevant standards through inspection, verification, and product testing by the BPS Recognized Testing Laboratories”4. This is important to ensure that the products being sold to public are reliable and safe. The other two product groups that fall under the Mandatory Product Certification Schemes of BPS are Mechanical/Building & Construction Materials and Chemical & Other Consumer Products and Systems.

After the product safety has been ascertain, another responsibility of the seller is to ensure that all the necessary information is available to the consumers in accordance with the third right of consumers which is Right to Information. For example, for pre-packaged food products, FDA requires that the labels should include the following: product name, brand name, complete list of ingredients, net contents and drained weight, name and address of manufacturer, repacker, packer, importer, trader, and distributor, lot identification, storage condition, expiry date, food allergen information, direction/instructions for use, and nutrition facts5. The seller should ensure that its products adhere to the labeling requirements mandated for its specific category. The price must also be clear and displayed to the customers.

When it comes to advertising, the seller should strive to be truthful in representing its products. In an article in The Manila Times, Ms. Tita Valderama, narrated some forms of misleading advertising. One example is “buy one take one” promotion when the product’s price was actually increased to cover for the “take one” item. Another form of misleading advertisement is the use of the word “natural” or “organic” when not all ingredients are natural or organic, respectively6. Misleading advertising might be profitable in the short-term because customers would be tricked to buy the product; however, in the long-run, it may be proven detrimental to the business as customers will lose their trust upon realizing that they were misled.

Apart from ensuring that the products are safe and properly labeled, the seller should also have a mechanism to settle issues that may arise such as malfunctioning and defective products. This is in accordance with the sixth right of the consumer which is the Right to Redress. This can be manifested by allowing consumers to return defective items within a specified span of time after the purchase.

How does upholding Consumer Rights benefit the Seller?

Since consumer protection is a law, non-compliance of the seller may result to fines and penalties that may hurt not only the financial standing of the business but also its reputation and its relationship with its customers. This is a double whammy that may negatively affect the future profitability and survival of the business. And in this era where news spreads faster than ever, one complaint may turn viral leaving a negative impression to prospective customers.

On the other hand, having a seamless complaint resolution process may earn the respect of the consumers and may become a competitive advantage for the seller. Of course, manufacturers and sellers must ensure that the products they hand over to customers should be compliant and at par with existing standards. However, there may be times that a few non-compliant products may slip out and reach the customers. When this happens, how does the seller turn the situation around? The answer is by having a great aftersales customer service where complaint resolution process will be a part of.

Another benefit of having a seamless and easy complaint resolution process is that the company will get feedback that it can use to further improve its product. Not all complaints may be related to non-compliance. Some of which are customer wishes that provide a window to their pain points and needs. If the complaint process is fast and easy in the point-of-view of the customers, they will be more encouraged to report and provide feedback. This can be a source of innovation for the seller that will result to a win-win situation – a solution to the pain points and needs of the consumers and a source of competitive advantage for the seller.

We at Trinity hope that these few reminders will help sellers navigate through consumer rights involved in trade. What’s important is that sellers are aware of these so that they may align their processes and expectations accordingly. For sellers, ensuring the safety of your products is a big responsibility that may make or break your business. This is why Trinity is offering Product Liability, Recall, and Contamination Insurance to help you in case your consumers incurred damages from using your products.

Product Liability, especially the Foods and Drinks Liability, pays for the insured’s legal liability for bodily injury or illness directly caused by food poisoning or the presence of deleterious matters in such food or drinks. On the other hand, Product Recall and Contamination Insurance covers loss or damage due to accidental contamination, malicious tampering, governmental recall, adverse publicity and intentionally impaired ingredients. It also extends to cover products extortion, crisis containment, and regulatory body recall.

To know more about Product Liability Insurance, please visit our website or click the following link:
https://trinity-insures.com/collections/general-insurance/products/casualty-and-liability-insurance
To know more about Product Recall and Contamination Insurance, please visit the following:
https://trinity-insures.com/collections/general-insurance/products/product-recall

 

 

Sources:

  1. https://www.officialgazette.gov.ph/1992/04/13/republic-act-no-7394-s-1992/
  2. https://www.dti.gov.ph/konsyumer/consumer-education/
  3. https://ww2.fda.gov.ph/index.php/about-food-and-drug-administration
  4. http://www.bps.dti.gov.ph/index.php/product-certification
  5. https://ww2.fda.gov.ph/attachments/article/194724/AO2014-0030%20-%20Revised%20Rules%20and%20Regulation%20Governing%20of%20Prepackaged%20Food%20Product
  6. https://www.manilatimes.net/2013/08/04/opinion/columnists/shop-wisely-false-ads-abound/26226/