Children help their parents spend their money

14 11 2008
David Beckham in a Motorola advertisement

David Beckham in a Motorola advertisement

According to recent news, parents are unwittingly spending £191 million a year to fund their children’s shopping habits. Or rather, the children are doing it for them on their behalf to save their parents the trouble of doing so. According to a survey consisting of 500 parents and 500 children, around 20%, or 1 in every 5, children have admitted to using their parents’ credit card for their online purchases.

The items in the shopping basket include the latest electronics, games, etc. Put simply, items that are on every child’s wish list. The age of the children ranges from 8 to 16 years and the value of the average purchase is said to be around £25. Of the parents surveyed, only 2% felt that their children would purchase goods online without their permission. 20% of the children also knew their parents’ username and password for their shopping websites. This made it easy for them to access their accounts and place orders.

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The recent strain being put on personal finances due to the rise in prices and unemployment would have undoubtedly led to parents cutting back their spending on buying the latest gadgets and gizmos and branded fashion accessories for their children. This means that the children feel “left out” when all their peers have the latest mobile phone or mp3 player and they are stuck with the “old” one.

Certain companies prey on this insecurity that the children harbour by pressurising them to purchase, or rather pester their parents to purchase the products that are endorsed by their “heroes” whom they “look up to”. The advertising method is such that it sends out the message to youngsters that a brand name is much more important than they product itself. It is endorsed by a well-known celebrity and therefore it’s cool and fashionable to own it and most certainly well worth the expensive price tag.

Often, the prices of these products are 2-3 times the price of their unbranded, store own-brand or less known branded counterparts. The obvious reason for this is that it allows the companies to “skim” the market, or in other words, pricing their products higher than the competitors since they know that the consumers will still want to buy them.

In August this year, The Association of Teachers and Lecturers expressed concern when their research showed that children who didn’t have the latest gadgets or wear garments that didn’t sport a fashionable logo were often bullied and mocked by their peers.

The report also highlighted how “brand aware” the children are and how in the race to be up-to-date, they end up having low self esteem and self confidence because their “net worth” or “net value” amongst their peers is judged by the brands they own.

In essence, what these companies are doing is “adding value” to a product by merely associating it with their brand. So, what you end up paying for is the brand. Of course, many might argue that many branded products do offer good value for money because they are of a better build quality. And what you get in return for the premium charged is peace of mind that the product will last. No doubt, this is true. But then, this isn’t true in all cases.

Interestingly, 30% of the parents’ admitted to saving their banking details online.
If the children can easily access them, just imagine how easy it might be for a fraudster to access the details. Then the orders might not be for £25, but more like £2500.

http://ukpress.google.com/article/ALeqM5i_9ZhcHk7F5v3WAReNAjjeFmrMxg
http://news.bbc.co.uk/1/hi/education/7549770.stm
http://www.business-easy.blogspot.com


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