Define what is meant by consumer penalties and provide reasons why companies would impose them on consumers.
What will be an ideal response?
Answers will vary.More and more businesses are adoptingconsumer penalties, which areextra fees paid by consumers for violating the terms of a purchase agreement. Airlines often charge a fee for changing a return date on a ticket. Businesses impose consumer penalties for two reasons: they will allegedly (1) suffer an irrevocable revenue loss and/or (2) incur significant additional transaction costs should customers be unable or unwilling to complete their purchase obligations. For the company, these customer payments are part of doing business in a highly competitive marketplace. With profit margins in many companies increasingly coming under pressure, organizations are looking to stem losses resulting from customers not meeting their obligations. Some medical professionals charge a penalty fee if you don't show up for an appointment. However, the perceived unfairness of a penalty may affect some consumers' willingness to patronize a business in the future.
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