In India most of the consumers are illiterate, poor and backward. They are not organised or united. On the other hand, producers and traders are very powerful and organised.
They adopt various methods to increase profits in the face of stiff competition. These methods used to exploit consumers are as follows:
1. High prices:
In recent years prices have increased steeply affecting poor consumers. Sometime, producers restrict output and traders hoard goods to artificially raise prices.
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2. Discounts:
Many traders first raise prices and then offer discounts to attract customers. They organise ‘sale’ to deceive consumers. As a result consumers have to pay higher prices.
3. Under Weighing:
Some traders give lower weight on quantity of goods than sold to unsuspecting consumers.
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4. Deceptive advertising:
Different producers of different brands of the same commodity make false claims (e.g. most popular brand) about their brands. They misguide consumers and add the cost of advertising to the selling price.
5. Adulteration:
In order to earn quick money, many traders practice adulteration. Adulteration is more common in agricultural commodities like pulses, tea, spices, milk, etc. Adulteration poses a great health hazard to consumers.