Consumer Power

In my previous post, I wrote about how prices are affected by forces which are beyond our control i.e. globalization, world demand and supply etc.

Well actually, I believe that consumer power should also play an important role.

I’ve often been asked (actually my husband always nags me with this question) as to why the prices of goods in Brunei are expensive as compared to Malaysia and Singapore, when we don’t have taxes and hardly any import duty. Well, the lazy answer to this question is simply that the cost of transportation is high. But if we think carefully, I have a strong believe that the consumer power in Brunei is not high enough to force the prices down.

I remember a few years ago, my husband and I wanted to buy a fridge/freezer. So, out we went surveying shops in various places in Brunei to find the cheapest price of the model that we wanted. In one of the shops, we met a relative. When we told him that we were looking for the cheapest fridge, he replied that we were wasting our time and fuel. The amount we spent on fuel would probably be the same with the amount that we saved of buying the cheaper fridge. So, why bother looking for a cheaper one?

Well, partly I agree with him as he is of course, being rational. BUT, by doing what we did, I believe we were doing a greater good. Why? You see, just imagine if everyone was doing what we were doing i.e. buy the cheapest, and the sellers knew that everyone would only buy the most competitive price. The effect would be that all sellers will eventually have to reduce their prices or become more competitive with each other (maybe by offering extra services etc). Now, that is consumer power.

It is also however unfortunate that the consumers in Brunei have no formal institution that looks after the consumers’ rights. I don’t know if anyone knows what exactly our rights are as consumers. Let’s say if you buy something from a shop, and the good is faulty, is it our right to return it? Usually, it is up to the grace of the shop-keepers to exchange it or refund your money. Either that or you fight your way out (haha). Now, what if you just change your mind? You haven’t used it, it’s still wrapped and when you go back home, you think you just don’t need it. How? Has anyone actually tried returning a good just because a change of mind? What about dishonest sellers? Who do we complain to? As a result, the sellers have all the power to put whatever price that could give them the maximum profit possible.

In fact, I remember reading a local blog which gave the evidence that the recent Brunei Grand Sales (BGS) had defeated its purpose. Many sellers were duping the customers. The prices were never reduced. This blogger showed the price of the item he bought was exactly the same before and after the so called BGS. What the seller did was raising the original price during the event so that at the end of the day, buyer would still pay the same price despite the ‘discount’ given. I guess the blogger (as a consumer) knew that he didn’t have the kind of power that could change anything or perhaps he didn't even know where to go to lodge his complain, just left it as it was.

In other countries, well in UK for example, there are a number of agencies who look after the consumers’ rights. One of the biggest agencies is the Trading Standard Institute. I’m not sure but I think it’s a government run body. It is like a one-stop centre for customer protection in the UK. In it, you find all kinds of information, ranging from the listing of related laws to the listing of product recalls. As a result, all sellers compete healthily and all consumers are treated as kings.

Yes, one might argue that we do have a number of laws that protect the customers such as the Sales of Good Act and the Contract Act. My questions are does everyone know that they exist and what about the contents? Do they protect the consumers or the sellers? In the event that I think I’m being cheated, can I simply go to the court of justice and demand my right?

Well, enough thought for today. Anyway, I would like to say that despite the lack of content and proper research, I applaud what the RTB was doing with their weekly consumer slot (do they still air it?). I’m just sad that the agency which I thought should be responsible is not doing anything about it.

Salaam